New Sick Pay Rules to Benefit 1.3 Million Low-Paid Workers

A significant increase to Statutory Sick Pay (SSP) rates is set to provide relief for over a million low-paid workers, with changes expected to be introduced next year through the Employment Rights Bill. Currently, workers earning less than £123 a week receive no statutory sick pay.

Under the new rules, these low-income employees will become eligible for 80% of their weekly salary from the first day of sickness and eligible to receive SSP from the first day they are unable to work. The Department for Work and Pensions estimates that the workers could be up to £100 a week better off compared to the existing system. 

Liz Kendall, Secretary of State for Work and Pensions, emphasised the importance of the change by stating "for too long, sick workers have had to decide between staying at home and losing a day’s pay or soldiering on at their own risk just to make ends meet. No one should ever have to choose between their health and earning a living, which is why we are making this landmark change. The new rate is good for workers and fair on businesses as part of our plan to boost rights and make work pay, while delivering our plan for change." 

While welcoming the change, union leaders are advocating for further improvements. Paul Nowak, General Secretary of the Trades Union Congress, stated, "This shouldn't be the end of the story," calling for a broader review of statutory sick pay rates and potential increases beyond the 80% replacement rate. 

The changes have raised concerns among small business owners. The Federation of Small Businesses reports that a third of its members worry the new rules might affect their hiring strategies, leading them to reduce staff numbers. The Employment Rights Bill will be presented to Parliament this week and includes these important sick pay reforms as part of a broader package of workplace rights improvements. 

Commentary 

While not a complete solution to workplace sick pay challenges, this reform represents a meaningful incremental improvement. It signals a policy direction that prioritises worker well-being without completely disregarding economic constraints. The true test will be in implementation and its long-term impact on both worker protection and business sustainability. 

By eliminating the £123 weekly earnings threshold, the government acknowledges a fundamental inequity: those most financially vulnerable are often the least protected when illness strikes. The 80% salary replacement for the lowest earners represents a meaningful step towards preventing workers from having to choose between their health and financial survival. The policy invites further dialogue about how we can create more resilient and compassionate workplace protections in an increasingly complex economic landscape. 

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