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Understanding the 2026 Statutory Sick Pay reforms: What UK employers and employees need to know

Guest blog by AdviceUK member Employment Law Services, Glasgow

The UK’s employment landscape is undergoing one of its most significant shifts in decades. From 6 April 2026, major reforms to Statutory Sick Pay (SSP) under the Employment Rights Act 2025 will come into force. These changes remove long-standing barriers that left many lower-paid and part-time workers without financial protection during illness.

For employers, the updates mean higher costs, more administrative work, and the need to update policies quickly. For employees, especially those on lower wages or in precarious roles, they bring welcome security. This article breaks down the new rules in detail, explains the transitional arrangements for absences that cross the April 2026 date, looks at the wider implications, and briefly covers other key employment law changes taking effect around the same time. Whether you run a small business in Glasgow or manage a larger workforce across the UK, understanding these reforms now will help you avoid costly mistakes later.

Current Statutory Sick Pay Rules (Pre-April 2026)
Under the existing system, SSP is a statutory minimum that employers must pay eligible employees who are off sick for four or more consecutive days (including non-working days). Key features include:

• Eligibility threshold: Employees must earn at least the Lower Earnings Limit (LEL), currently around £125 per week (rising slightly each April). Anyone earning below this receives nothing from SSP.
• Three waiting days: No pay for the first three qualifying days of sickness.
• Flat rate: A fixed weekly amount (currently £118.75, rising to £123.25 from April 2026).
• Maximum duration: Up to 28 weeks per Period of Incapacity for Work (PIW).
• Qualifying conditions: The employee must be an employee (not a worker on a different contract), have given proper notice of sickness, and not be receiving certain state benefits that disqualify them.

These rules have been in place for years, but they have been criticised for leaving an estimated 1.3 million lower earners without support and encouraging presenteeism, people dragging themselves into work while ill, potentially spreading illness. The 2026 reforms directly address these issues.

The Three Big Changes Effective 6 April 2026
The Employment Rights Act 2025 introduces three fundamental updates to SSP:

1. Day-One Entitlement – No More Waiting Days
   SSP will now be payable from the first full day of sickness absence. The three-day waiting period is abolished entirely. This applies to all new absences starting on or after 6 April 2026. Short illnesses that previously went unpaid will now attract SSP from day one.
2. Removal of the Lower Earnings Limit
   Every eligible employee will qualify for SSP regardless of how much they earn. This is the most far-reaching change. Part-time workers, those on zero-hours contracts (where they qualify as employees), and anyone previously below the LEL threshold will now be covered. The government estimates this will extend protection to hundreds of thousands more people.
3. New Earnings-Related Calculation
   SSP will no longer be a simple flat rate for everyone. Instead, it will be the lower of:
   •  80% of the employee’s average weekly earnings (AWE), or

• • the new flat weekly rate of £123.25.Average weekly earnings are calculated over the eight weeks immediately before the sickness absence (or the first day of a linked period). This protects lower earners by tying pay more closely to their actual wages while capping it at the statutory rate for higher earners.Example scenarios (hypothetical, based on GOV.UK methodology):An employee earning £200 per week: 80% of AWE = £160 but capped at £123.25 → they receive £123.25 per week.
    An employee earning £120 per week: 80% of AWE = £96 → they receive £96 per week (the lower figure).
    A higher earner on £600 per week: still capped at £123.25.

Transitional Rules for Absences Spanning 6 April 2026
The government has published clear guidance to prevent confusion for ongoing sickness cases.

• Absences that started before 6 April 2026 and continue afterwards:
  • If the employee was already receiving SSP before the date, switch to the new rate (£123.25 or 80% AWE, whichever is lower) from 6 April onwards.
  • If the employee was ineligible before 6 April because they earned below the LEL, they may become entitled from 6 April if their absence started on or after 22 September 2025 (or they had breaks in a linked period).
  • Absences that started on or before 21 September 2025 and continued without sufficient return-to-work breaks generally remain ineligible unless a new linked period is created.
• Employees on waiting days on 6 April: The old waiting days are not paid retrospectively. SSP starts from the first qualifying day on or after 6 April.
• Restarted absences: Special rules apply if someone returned briefly and then fell ill again around the April date.

Employers should review the full GOV.UK guidance on “Sickness absences that start before and end on or after 6 April 2026” and update their SSP1 forms accordingly. An updated SSP1 form has already been released to reflect the changes.

What This Means for Employers and Employees

For employees, especially those on low or variable pay, the reforms are transformative. Financial worry during short illnesses will reduce, potentially improving wellbeing and reducing the pressure to attend work while contagious. Part-time and gig-economy employees (where they qualify) gain real protection for the first time.

For employers the changes will increase payroll costs, particularly for businesses with many lower-paid staff. Small and medium-sized enterprises (SMEs) may feel the impact most acutely. Additional administration around AWE calculations and transitional cases will require updates to HR policies, absence reporting procedures, and payroll software.
Non-compliance risks tribunal claims, financial penalties, and reputational damage. On the positive side, better-protected staff may return to work fitter and reduce long-term absence rates.

Other Key Employment Law Changes from April 2026

While SSP is the headline reform, the Employment Rights Act 2025 introduces several other measures from April 2026:

• Day-one rights to paternity leave and unpaid parental leave (no qualifying service required).
• Bereaved Partner’s Paternity Leave: up to 52 weeks if the child’s mother or primary adopter dies.
• Stronger whistleblowing protections: specifically covering reports of sexual harassment.
• Increased protective award: for collective redundancy failures (doubled to 180 days’ pay).
• Launch of the new Fair Work Agency to enforce employment rights more robustly, including SSP and holiday pay.
  These changes form part of a broader “Make Work Pay” agenda and will be phased in over 2026–2027. Full details are available on GOV.UK and ACAS.

 

How to Prepare Now

1. Review and update policies: Remove references to waiting days and earnings thresholds in your sickness absence policy.
2. Speak to your payroll provider: Ensure systems can handle the new 80% AWE calculation and transitional rules.
3. Communicate with staff and managers: Explain the changes transparently to avoid confusion.
4. Train HR and line managers: Accurate record-keeping and AWE calculations will be essential.
5. Consider enhanced contractual sick pay: Many employers already offer better-than-statutory schemes; now is a good time to review competitiveness.
6. Seek specialist advice: Especially if you operate in Scotland, where employment law is the same but local nuances in enforcement can arise.

Businesses in Glasgow and the surrounding areas can benefit from proactive support to ensure full compliance before the deadline.

The 2026 SSP reforms mark a step towards fairer workplace protections while placing new responsibilities on employers. By acting early, updating systems, training teams, and seeking expert guidance, businesses can turn compliance into an opportunity to support their people and strengthen their employer brand.

For tailored advice on these changes and all aspects of employment law in Glasgow, contact Employment Law Services. Their specialist team helps local businesses navigate reforms efficiently and compliantly.

Staying ahead of employment law changes isn’t just about avoiding penalties, it’s about building a resilient, motivated workforce ready for the future of work.