New employee protections under the Employment Rights Act 2025 took effect on 6 April 2026. The most significant reform for employers at this time is the overhaul of statutory sick pay (SSP), which will materially increase cost exposure, particularly for small and owner-managed businesses.
The government’s aim of strengthening protections for unwell workers is understandable, but employers should not underestimate the changes to the economics of a single sick day.
Two fundamental changes are being introduced, which are the removal of the lower earnings limit and the abolition of waiting days. SSP will now be payable to all employees, regardless of earnings, from the first day of sickness. Previously unpaid waiting days will no longer apply, meaning any single day of sickness will trigger a SSP entitlement.
This dramatically expands eligibility and increases day-to-day sickness absence costs, even where sickness is short-term or sporadic. From 6 April, the weekly SSP rate will also rise from £118.75 to £123.25 as part of the annual uplift. While employers offering enhanced contractual sick pay may see limited change, the impact on smaller employers which rely solely on SSP will be significant.
Other employment law reforms at this time matter, not least the Collective Redundancy Protective Award. Failure to inform and consult employees will double from 90 to 180 days of pay, significantly increasing risk for non-compliant employers and the usual national minimum wage increases. Family-friendly rights are also expanding, with paternity leave and unpaid parental leave becoming day-one rights. However, the changes to SSP are most likely to lead to employer cost exposure. This is at a time when employers are feeling the rise of wage bills from the national insurance hike and national minimum wage increases.
Employers should be taking practical steps to prepare for these changes, including reviewing and updating family-friendly and sickness absence policies.
The move to day-one sick pay and expanded eligibility is likely to change absence patterns. Employers can expect more short-term and odd day absences, particularly in lower-paid roles and sectors such as hospitality and manufacturing, because more employees may stay at home with minor illnesses where they may previously have come into work to avoid not being paid.
As a result, return-to-work meetings will become increasingly important in managing absence effectively. Employers should make these meetings routine, refresh trigger points, set clear documented expectations, and train managers to apply the rules consistently. Employers that allow absence to drift upward will see SSP costs rise quietly, one day at a time, and it will be much harder to reset attendance norms later.
Sarah King is an employment partner at Excello Law
