Employment Rights Act 2025: statutory sick pay reforms explained

The Employment Rights Act 2025 made changes to Statutory Sick Pay (SSP), expanding eligibility and ensuring employees receive financial support from the first day of sickness absence.

The reforms, which came into force on 6 April 2026, represent one of the most substantial changes to SSP in recent years. By removing longstanding eligibility restrictions and abolishing waiting days, the Government aims to provide greater protection for workers experiencing illness while simplifying the statutory framework.

For employers, the changes are likely to increase SSP costs and require updates to sickness absence procedures, payroll systems and workplace policies.

In this article, associate Julia Nwaneke discusses the changes to Statutory Sick Pay under the Employment Rights Act 2025, including day one entitlement, expanded eligibility and the practical implications.

Under the previous SSP regime, employees had to satisfy certain conditions before becoming entitled to payment.

An employee needed to be incapable of work for at least four consecutive days before SSP was payable. These first three qualifying days were known as "waiting days". As a result, employees often received little or no SSP for shorter periods of sickness.

The previous SSP regime also restricted eligibility by reference to earnings. Employees were only entitled to SSP if they earned at least the Lower Earnings Limit (which was set by the government each year), meaning some low-paid and part-time workers did not qualify for SSP.

One of the most significant changes introduced by the Employment Rights Act 2025 is the abolition of waiting days.

From 6 April 2026, a period of incapacity for work begins on the first day an employee is too unwell to work, and SSP becomes payable immediately. This means employees will now be entitled to SSP even where they are absent for only a single day due to illness.

The reform is intended to reduce the financial impact of short-term illness and ensure employees are not discouraged from taking legitimate sickness absence because of concerns about loss of income.

The Employment Rights Act 2025 also expands access to SSP by removing the Lower Earnings Limit requirement.

The removal of this earnings test means all employees are now eligible for SSP regardless of how much they earn.

This change is particularly significant for lower-paid employees and part-time workers, many of whom were previously unable to access SSP.

The calculation of SSP has also changed. Under the new framework, SSP is paid at the lower of:

• The prescribed statutory weekly rate; or

• 80% of the employee's average weekly earnings.

The intention is to ensure that SSP provides meaningful financial support while avoiding situations where an employee could be paid more when off sick than when they are in work.

While the changes simplify some aspects of the SSP regime, they are likely to increase costs for employers.

The abolition of waiting days means employers will be responsible for SSP payments from the first day of qualifying sickness absence, while the removal of the earnings threshold expands the number of employees who may be entitled to SSP.

Employers should consider:

• Reviewing sickness absence policies and staff handbooks

• Ensuring payroll systems reflect the new SSP rules

• Training managers on the revised framework

• Assessing the financial implications of increased SSP payments

The changes to SSP form part of a wider programme of employment law reform that will affect both employees and employers.

Our employment lawyers advise on all aspects of sickness absence, workplace rights and employment disputes. We support individuals seeking to understand their entitlements or challenge workplace decisions, as well as employers reviewing policies and managing absence-related issues.

Whether you need advice on your rights during a period of illness, workplace adjustments, absence management or the practical impact of the new legislation, our team can provide clear and pragmatic guidance tailored to your situation.

Julia Nwaneke is an associate in the charity law and not for profit team. Julia advises charities and not-for-profits on all aspects of employment law, including workplace policies, contracts, restructures, discrimination and disciplinary processes. She also specialises in data protection law.