Most of the coverage of the Employment Rights Act 2025 has focused on unfair dismissal. The change that has already hit payroll is statutory sick pay, and it took effect on 6 April 2026.
What changed?
Three things, all at once.
Waiting days are gone. SSP is payable from the first qualifying day of absence. The three unpaid days no longer exist.
The lower earnings limit is removed. Employees earning below the LEL now qualify. The government estimated this brings around 1.3 million additional employees into scope.
A new rate calculation applies. SSP is the lower of the flat rate — £123.25 per week from 6 April 2026 — or 80% of the employee’s normal weekly earnings. For lower earners the 80% figure will often be the operative one, so payroll cannot simply apply the flat rate.
Alongside this, statutory paternity leave and unpaid parental leave became day-one rights, the maximum protective award for collective redundancy consultation failures doubled from 90 to 180 days’ pay, and disclosures about sexual harassment now qualify for whistleblowing protection. The Fair Work Agency launched on 7 April 2026.
What does it actually cost?
It depends entirely on your absence profile.
If you already pay contractual sick pay from day one, very little changes; you were absorbing the cost already. If you pay SSP only, the removal of waiting days means every short absence now carries a cost that previously did not. A workforce with frequent one and two-day absences will feel this most, and those are exactly the workforces least likely to have modelled it.
The removal of the lower earnings limit compounds it for employers with part-time and casual staff.
There is a genuine policy argument on the other side: paying from day one supports phased returns, because an employee returning three days a week receives SSP for the two days not worked. Whether that reduces overall absence in your business is an empirical question, and worth measuring rather than assuming.
What should be checked now?
Four months in, the errors we see are consistent.
Contracts and sickness policies that still refer to three waiting days or to the lower earnings limit. These are now wrong and, where contractual, potentially unenforceable in the employee’s favour.
Payroll settings that apply the flat rate to everyone, without the 80% comparison for lower earners.
Company sick pay schemes with their own waiting period. That remains permissible, but it needs a deliberate decision rather than an oversight, and it should not conflict with the statutory floor.
Absence recording that was built around the old rules. If your system was designed to start counting on day four, the data feeding your payroll is no longer fit for purpose.
What comes next?
The reforms are phased through 2027. The one to plan for is the reduction in the unfair dismissal qualifying period, which takes effect in January 2027 and will apply to employees already in post at that date.
That is a recruitment and probation question rather than a payroll one, and it needs addressing now rather than in December.
Frequently asked questions
What is the statutory sick pay rate for 2026/27?
£123.25 per week, or 80% of the employee’s normal weekly earnings if that is lower. The comparison has to be made for each employee; applying the flat rate universally will overpay lower earners and create reclaim problems.
Is SSP really payable from the first day of absence?
Yes. The three-day waiting period was abolished for absences from 6 April 2026 by the Employment Rights Act 2025 (Commencement No. 3) Regulations 2026. Transitional rules applied to employees already absent on that date.
Do low earners now qualify for SSP?
Yes. The lower earnings limit no longer applies for SSP eligibility, extending entitlement to an estimated 1.3 million additional employees. For those employees the 80% of normal weekly earnings calculation will usually produce a figure below the flat rate.
Can we still have a waiting period in our company sick pay scheme?
Contractual sick pay above the statutory minimum remains a matter for the employer, so a waiting period in a company scheme is possible. But the statutory entitlement applies from day one regardless, and any contract or policy still referring to statutory waiting days needs updating.
What else changed on 6 April 2026?
Paternity leave and unpaid parental leave became day-one rights with no qualifying service. The maximum protective award for collective redundancy consultation failures doubled to 180 days’ pay per affected employee. Whistleblowing protection was extended to disclosures about sexual harassment. The Fair Work Agency launched on 7 April 2026.