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A million of UK’s lowest earners miss out on sick pay

Women, disabled workers and younger workers were disproportionately impacted by sick pay ineligibility

A million (1.15 million) workers – 3.5% of the UK workforce – are not eligible for statutory sick pay (SSP) as they do not meet the earnings threshold of £123 per week, a report from think tank The Work Foundation revealed last Thursday (20 June).

The value of sick pay has halved relative to earnings since its introduction in the 1980s, meaning that if a worker is eligible, SSP currently replaces 17% of average weekly earnings. Nearly half (47%) of employers do not go beyond the statutory minimum level of sick pay provision.

Asli Atay, policy adviser at the Work Foundation, told HR magazine that SSP reforms should be a priority for the next government after the election.

She said: “We propose comprehensive reforms under an employment bill within the first 100 days of the next parliament, including removing the earnings threshold, initiating SSP from day one of illness, and increasing SSP to 60% of usual wages or the real living wage equivalent. 

“Additionally, support measures should be extended to smaller employers to alleviate the financial burden.”

The study, which surveyed over 1,000 senior business leaders, found that sick pay ineligibility disproportionately impacts groups that already face inequalities in the labour market. Nearly two thirds of people ineligible for sick pay are women (69.2%), a third are disabled workers (33%) and over half are young workers aged 16 to 24 (52.4%).

Read more: MPs call for sick pay boost

Employers can make sick pay and leave more equitable by implementing universal and transparent policies, said Vicky Walker, group director of people at health insurance company, Westfield Health. 

She told HR magazine: “Regardless of salary level, organisations should be offering the same amount of sick leave to all employees. Employers can create equitable sick pay policies by benchmarking against industry standards and engaging in dialogue with employees to better understand their needs. 

“It’s also important to create a transparent and accessible process for employees to use and record their sick leave. Having line managers stay in touch with their people about their health and offer support is a great way to achieve this.”

Below-average earners also have on average two fewer days of annual leave entitlement per year than those with earnings above the UK average.

Read more: Government to pilot new service to tackle sick leave

A third (32%) of people earning above the average income have annual leave that exceeds 30 days, compared to a quarter (25%) of those who earn lower than the average income.

Atay said that lower levels of annual leave for lower earners could lead to presenteeism: “Our research shows that workers who earn more than the UK average salary tend to be given more annual leave by employers, which helps them live healthier, working lives. 

“However lower earners can feel unable to take time away from work due to financial pressures, and feel compelled to work extra shifts rather than take leave, or work while they are ill.”

The research is based on a detailed literature review, secondary analysis of ONS Labour Force Survey, a series of interviews and a survey of 1,167 senior business leaders across Great Britain, conducted by the research firm Survation. The fieldwork took place online between 29 April and 7 May 2024.