New Sick Pay Reforms for Low-Paid Workers in the UK
In a significant move to support the UK’s lowest-paid workforce, the Government is set to introduce reforms that will ensure over one million workers are entitled to guaranteed sick pay from the very first day of illness. Currently, employees must be sick for more than three consecutive days and earn an average of £123 per week to qualify for statutory sick pay (SSP) of £116.75 per week. However, with the forthcoming changes, individuals earning below £123 will receive 80 percent of their salary as soon as they report their illness, or the new SSP rate of £118.75, whichever is lower.
The Government estimates that this initiative will benefit approximately 1.3 million individuals. Work and Pensions Secretary Liz Kendall hailed the reforms as a positive step for both workers and businesses, emphasizing fairness in the workplace. While trade unions have welcomed this change, there are ongoing calls for the Government to further enhance the sick pay system, as the UK’s current statutory sick pay remains considerably low compared to many other European countries.
Current Statutory Sick Pay in the UK
As it stands, employees who earn more than £123 weekly are entitled to receive £116.75 per week as sick pay, starting from the third consecutive day of illness, with a planned increase to £118.75 in April. This benefit can be received for a maximum of 28 weeks. Unfortunately, those earning less than £123 per week currently receive no financial support during their illness.
Under the upcoming employment rights Bill, which is expected to return to Parliament next week, even the lowest earners will be guaranteed 80 percent of their average weekly earnings from the first day of illness. For instance, consider a part-time worker who logs 10 hours a week at an hourly rate of £12.21—the national minimum wage for individuals over 21 starting in April 2025. This worker would earn £122.10 a week, which under current rules does not qualify for statutory sick pay. However, with the new reforms in place, they would be entitled to receive £97.68 weekly from their employer during their sickness period. These changes are anticipated to take effect next year. Notably, the majority of UK workers (57 percent) do not rely on SSP, as many employers choose to offer more generous sick pay policies.
Comparative Analysis with European Countries
The UK’s statutory sick pay is among the least generous in the developed world, according to research from the Resolution Foundation think tank. This view is echoed by The Compensation Experts, a claims management service that assessed statutory sick pay policies across 42 European countries, ranking the UK in 40th place, ahead only of Ireland and Malta.
For comparison, in Germany, employees are entitled to their full salary for up to six weeks, funded by their employer. After this period, statutory health insurance provides sickness benefits covering 70 percent of gross income. In France, a three-day waiting period is in place, after which employees receive 50 percent of their gross salary, capped at €46 per day. Spain also enforces a three-day waiting period, after which workers are entitled to 60 percent of their normal wages, paid by their employer for up to 16 days. Following this, payments rise to 75 percent of wages, covered by the Spanish social security system. In Sweden, employees receive 80 percent of their salary from day one of their illness, initially paid by the employer, and after 14 days, they must apply for government support, which maintains the same percentage, capped at £54 per day.
The Resolution Foundation acknowledges that the Government’s intention to broaden SSP eligibility represents “real improvements” and will “benefit a significant number of workers.” This change provides a vital safety net for an estimated 1.3 million workers who previously had no financial support, particularly important given that most sickness absences last only one or two days. However, the Foundation also warns that the existing system still offers “minimal earnings protection” for workers facing sickness absences.
To achieve meaningful security in this area, the Government would need to raise the level of statutory sick pay. The 2024 Low Pay Britain report suggests linking the SSP level to workers’ earnings and establishing a replacement rate of 65 percent, aligning it with the OECD (Organisation for Economic Co-operation and Development) average of 68 percent. Under this proposed structure, employees working full-time at the National Living Wage would receive £297.44 in SSP for a week of sickness, significantly more than the current entitlement of £46.70. This adjustment would also provide more than double the £116.75 available under the current system without waiting days but with no changes to the SSP rate.
