Half of UK small businesses unprepared as sick pay rules change
Changes to Statutory Sick Pay (SSP) take effect next week, but a poll of 600 small and medium-sized businesses (SMEs) conducted by The HR Dept has found that almost half of employers (46%) are unprepared for the changes and 75% fear they could be unintentionally exploited financially.
From April, the current three-day waiting period will be replaced, and workers will be able to claim SSP from day one of absence. Coupled with the removal of the Lower Earnings Limit (LEL) for SSP, this means that anyone off work due to illness will still receive some pay, regardless of what they earn.
But SME employers express concern. Many believe that this could unintentionally encourage more sick days, which in turn would lead to decreased productivity and expose employers to higher worker costs they might not be able to afford – especially those running lean or marginal operations.
However, as Michaela Gartside, Director of HR Dept Bracknell, Windsor and Heathrow, argues, such concerns are less of an issue for those SMEs who have already acted early to mitigate the potential financial risks.
She said: “Many UK businesses have avoided adopting a proactive approach to absence and have instead been relying on the three-day SSP waiting period as their de facto absence management policy.
“But, for the 54% of businesses who are prepared verses the 46% who are not, the impact of the new rules will be marginal. That is because they have already invested in fair systems and robust HR practices, which naturally curb unnecessary sickness rates.”
She added: “The real risk is not the legislation; it is the failure to manage people fairly and effectively. The hallmarks of a good sickness absence policy do not change in April 2026 – it simply becomes non-negotiable.”
The upcoming changes should be at the top of the agenda for SME business owners, the HR Dept urges. Having a clear and comprehensive absence management policy and processes in place is essential for all SMEs.
This is because it ensures fairness, prevents issues escalating, increases worker productivity, performance and morale, and creates a healthier workplace culture that people want to work within.
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