Understanding the Changes to Statutory Sick Pay (SSP)
- Jan 22
- 3 min read
Updated: Feb 6
The government has announced that the three-day waiting period for SSP will be removed. This means:
This change will come into effect in April 2026.
Employees will be eligible for SSP from day one of their sickness absence.
Employers must pay SSP for every day an employee is off sick, starting immediately.
The change aims to provide quicker financial support to employees during illness.
This update aligns SSP more closely with other benefits and reflects a growing recognition of the financial strain sickness can cause workers.
How These Changes Affect Small Businesses
Small businesses often operate with tighter budgets and fewer resources than larger companies. The removal of the waiting period means:
Increased SSP costs: Employers will pay SSP for more days, potentially increasing overall expenditure.
Lower Earnings Limit (LEL) Removed: Previously, workers had to earn at least £123/week to qualify. This threshold is removed, making SSP available to all workers regardless of income.
New Rate Structure: For those who previously fell below the LEL, sick pay will be capped at the lower of the flat weekly rate (projected to be £123.25) or 80% of their normal weekly earnings.
Cash flow challenges: Immediate SSP payments may strain cash flow, especially for businesses with multiple employees off sick simultaneously.
Administrative burden: Tracking and processing SSP from day one requires more precise record-keeping and payroll adjustments.
For instance, a small café with 10 employees might have previously paid SSP only after three days of absence. Now, if two employees fall ill, the business must cover SSP from the first day, increasing short-term costs.
Why Small Businesses Need Strong Absence and Sickness Policies
Clear absence and sickness policies help small businesses manage the financial and operational impact of sickness absence. These policies:
Set expectations for employees about reporting sickness and returning to work.
Help identify patterns of absence that may indicate underlying issues.
Provide guidelines for managing long-term sickness and supporting employee wellbeing.
Protect businesses from unexpected costs by outlining SSP procedures and responsibilities.
Without a strong policy, small businesses risk confusion, inconsistent handling of absences, and potential disputes.
Introducing U-HR Policy Templates
The U-HR Attendance & Sickness Absence Policy is designed specifically to support small businesses, outlining employee and employer responsibilities.
By adopting the U-HR policy, small businesses can take control of employee absence and better manage the financial impact.
Practical Steps for Small Businesses to Prepare
To adapt to the SSP changes, small businesses should:
Review and update absence policies to reflect the removal of the waiting period.
Train managers on new SSP rules and policy enforcement.
Improve record-keeping systems for sickness absence and SSP payments.
Communicate changes clearly to employees to set expectations.
Consider cash flow planning to manage increased SSP payments.
For example, a small retail shop might schedule training sessions for supervisors and use U-HR’s templates to streamline absence management.
Supporting Employee Wellbeing While Managing Costs
Balancing employee support and business sustainability is key. Small businesses can:
Encourage early reporting of illness to manage staffing.
Offer flexible working arrangements where possible.
Promote health and wellbeing initiatives to reduce sickness absence.
Use return-to-work interviews to support recovery and prevent repeat absences.
These practices, combined with a strong sickness policy, help maintain productivity and morale.
Conclusion: Navigating the Changes with Confidence
The removal of the SSP three-day waiting period marks a significant shift for small businesses. While it increases immediate costs, it also offers an opportunity to build stronger absence management practices. With U-HR, you can navigate these changes with confidence.
How Confident are you with managing employee absence?
Very confident (Robust policy and procedures in place)
50/50 (Policy and Procedures may need a review)
Not confident (No Policy, absence not routinely managed)
