The Labour Party pledged in its election manifesto to “strengthen” sick pay, but 24 union leaders wrote to prime minister Keir Starmer, to highlight their concerns that the government had not met their promise.
The letter warned that workers who are ill are being forced into debt and putting off treatment as sick pay, which is currently £116.75 per week, is much lower than their usual salaries.
“There are two major problems with SSP: the three-day delay in payments commencing and the low level of the pay,” said Steve Herbert, an independent pensions, employee benefits and wellbeing speaker.
Herbert told HR magazine: “The low level of SSP payments represents a serious problem, yet there is only so much extra financial burden that hard-pressed employers can absorb, not least with the increased national insurance costs to be met next year.
“While the unions are understandably focusing on this issue, it may take longer – and a more buoyant economy – before the government can insist on higher payments to absent workers.”
The government is currently leading a consultation on replacing the lower earnings limit with a percentage replacement rate. The Department of Work and Pensions has claimed that the Employment Rights Bill will make workers eligible for SSP from the first day of illness rather than the fourth.
Read more: A million of UK’s lowest earners miss out on sick pay
More than 1 million (1.15 million) workers in the UK are currently ineligible for SSP, a report by think tank the Work Foundation revealed in June, as they do not meet the earnings threshold of £123 per week.
This means that lower earners miss out on sick pay, the research suggested. Those missing out are predominantly women (69.2%); disabled workers (33%) and workers aged 16 to 24 (52.4%).
The Recruitment and Employment Confederation (REC) raised concerns that changes to SSP could burden smaller businesses in particular.
“It is important to strike a good balance between the need to make sure people have better levels of SSP and the reality of businesses (especially SMEs) being able to afford this additional cost at a time when they are already struggling with a wide range of rising employment costs,” said Shazia Ejaz, REC director of campaigns and research, in a statement published on 6 December.
“Small businesses, which make up a significant portion of the market, would bear a disproportionate cost burden, with 60% of new SSP costs falling on them.
“We urge the government to set the rate of SSP at a level that encourages employers to retain staff, rather than having to move swiftly to capability-based dismissal.”
In contrast, the The Chartered Institute of Payroll Professionals (CIPP) recommended that the government retain the waiting time but increase the rate of SSP.
Mathew Akrigg, the CIPP's policy and research officer, told HR magazine: “The CIPP assisted in providing evidence to the Work and Pensions Committee earlier this year on SSP in the workplace.
“As part of this, we recommended that the rate be increased to better support vulnerable workers when they are unable to work. The committee recommended that the waiting days were retained but the rate increased.
“The Labour government took a different direction in improving the state of SSP, aiming to remove the lower earnings limit and the waiting days.”
Read more: MPs call for sick pay boost
Changes to SSP are unlikely to be implemented until April 2026, Akrigg continued.
He added: “The CIPP will continue to work with the government to implement these changes in an appropriate way and will push for further improvements that work for both workers and employers.”
The government should also encourage employers to support those with long-term sickness to stay in work, suggested Asli Atay, senior policy advisor at Lancaster University's Work Foundation.
Speaking to HR magazine, she said: “With rising economic inactivity due to ill health, ensuring adequate sick pay is essential to recovery and retaining people in jobs.
“To address this, the government should look urgently at increasing the rate of SSP itself, alongside exploring extending employer responsibilities to support those who fall ill to remain in work.”
