The UK government is set to overhaul its statutory sick pay system, granting more than one million low-paid workers the right to receive 80% of their average weekly earnings from the first day they fall ill. Currently, to qualify for statutory sick pay, employees must have been sick for more than three consecutive days and earn at least £123 per week. Work and Pensions Secretary Liz Kendall defended the landmark change, stating, “No one should ever have to choose between their health and earning a living.”
Under the new proposal, affected workers will receive either 80% of their average weekly earnings or the current statutory sick pay rate of £116.75 per week whichever is lower. The changes, part of a broader update to the Employment Rights Bill, aim to boost living standards and reduce the reliance on benefits by ensuring that sick pay is accessible right from day one.
While the move has been hailed by many as a significant win for workers’ rights, it has also raised concerns among business groups. The British Chambers of Commerce warned that offering sick pay from day one could result in higher absenteeism, particularly impacting smaller firms that already struggle to find short-notice shift cover. The government’s impact assessment, critics say, did not provide compelling evidence on the potential unintended consequences of the change.
Trade unions are also urging further enhancements. TUC general secretary Paul Nowak called for the replacement rate for the lowest earners to be raised beyond 80% in future reviews, arguing that the current measure is only a starting point for improving worker welfare.
In addition to sick pay reforms, the Employment Rights Bill is set to include enhanced provisions for flexible working and extended unpaid parental leave. However, the bill has faced criticism from businesses concerned that the combined effect of increased workers’ rights, a rising minimum wage, and higher employer National Insurance contributions will hinder growth and dampen employment prospects. Notably, a proposed “right to switch off” which would prevent employers from contacting staff outside of working hours has been scrapped in a bid to reduce compliance costs.
The government’s initiative represents a significant step toward a more supportive social safety net for low-paid workers, though its full impact on businesses and overall economic productivity remains to be seen.
