From April 2026, the Employment Rights Act will come into effect and one of the biggest reforms is to Statutory Sick Pay (SSP).
These changes will affect every employer and alter how SSP is calculated, who qualifies and when payment must start.
While this reform is targeted towards improving access to sick pay for employees, it will bring new responsibilities that employers must prepare for.
Who will qualify for SSP?
Under the Employment Rights Act, SSP will now become payable from the first day of sickness and this will remove the previous three-day waiting period.
This means that employers will soon be required to pay SSP for shorter absences that may have previously gone unpaid.
The Lower Earnings Limit (LEL) will also be abolished and part-time, low-paid, casual, zero-hour and seasonal workers will now qualify for SSP.
What are the changes to payment?
The new reforms will affect how SSP is calculated and the payment rate will be the lower of:
- 80 per cent of Average Weekly Earnings (AWE)
- The standard SSP flat rate, which is rising to £123.25 per week
However, SSP will still be based on average weekly earnings, usually calculated over the eight weeks before the sickness absence.
If any of your employees are already receiving SSP before 6 April 2026, then transitional protections will apply.
This means that your employee will continue to receive the flat rate of £123.25 per week instead of the 80 per cent rate if it is lower.
Employees will be protected for the remainder of their 28-week entitlement, provided they do not return to work or end their contract beforehand.
How can employers prepare for SSP changes?
Employers will need to reassess and update their payroll system in time for the implementation of the Act.
You should prepare by:
- Reviewing sickness absence policies to reflect day-one SSP
- Updating employment contracts and handbooks on waiting days or earning thresholds
- Checking payroll systems can handle percentage-based SSP calculations
- Training HR teams and managers on new eligibility rules and absence recording
- Budgeting and forecasting costs, as more employees will qualify for SSP
- Communicating clearly with employees to ensure the new obligations are met
How can we support you?
The Employment Rights Act will bring new financial requirements for employers and greater protection for employees.
Our professional team can help support employers by modelling the financial impact of SSP changes and making sure their payroll systems and SSP calculations are accurate.
We can review your policies and help reduce the risk of costly payroll errors and HMRC scrutiny once the Act comes into effect.
Contact our team to find out more about how we can prepare your payroll for the Employment Rights Act.