The Employment Rights Act 2025 is bringing major change to the workplace, with the new rights on Statutory Sick Pay (SSP) taking effect from 6 April 2026 likely to have the biggest impact on employers and workers, according to a recent poll from Acas.
This change applies throughout the UK (including Northern Ireland) and greatly increases the availability of SSP, meaning up to 1.3 million low paid employees now qualify, who wouldn’t have qualified before.
SSP used to be restricted to those earning at or above the Lower Earnings Limit, but now those requirements have been removed and all eligible employees are entitled to SSP, no matter what their earnings.
In addition to this, SSP is now due from the first full day of sickness absence, rather than only being paid from day four as it was before.
Under the new rules, SSP is paid at the lower of 80% of average weekly earnings (AWE); or the new, uprated, weekly flat rate of £123.25. This means, for example, that for someone with AWE of £100, entitlement to SSP would be £80 per week.
Many employers pay more than the statutory minimum, and it remains open to employers to continue such occupational schemes.
The previous eligibility conditions for SSP will remain. To qualify, there must be an employment contract, and work must have been done under the contract. This eligibility extends to those with worker status, including agency workers. If they satisfy the qualifying conditions, part-time, temporary, and casual employees can also be entitled to SSP.
Employers should check that payroll systems have been adjusted for the change, and that sickness absence policies, contracts and handbooks have been updated, ensuring they no longer reference earnings thresholds or waiting periods. Because payroll needs to be alerted to the need for SSP, absence notification takes on new importance. Employers also need to ensure they take into account staff training and employee communications around these changes.
Another issue for employers is cost. It is estimated that this change will cost employers around £15 per employee, so budgeting for higher SSP will be necessary.
The Fair Work Agency (FWA) is a new government body enforcing key employment rights, such as agency worker protections and gangmaster licensing, as well as overseeing Minimum Wage enforcement. HMRC’s Minimum Wage team is currently operating under contract to the FWA with an expectation to transfer to the FWA in 2027. Additional areas such as holiday pay and SSP will be added to the FWA’s remit in due course.
If employees think their rights are being breached, they will be able to make a referral to the FWA, who will have powers to investigate breaches, issue civil penalties, and take action against labour exploitation.
Employers are advised to familiarise themselves with the FWA’s enforcement policy statement, with scrutiny of employer compliance likely to increase as a result of this change. Reviewing compliance with employment rights, such as the newly-introduced requirement to keep adequate records on holiday pay and annual leave, is especially important.
