(qlmbusinessnews.com . Tues 4th Mar, 2025) London, UK —
Landmark Sick Pay Change: Over 1 Million UK Workers to Receive 80% of Earnings
More than one million low-paid workers in the UK will soon receive improved sick pay, with the government set to extend benefits from the very first day of illness. Under the new plan, eligible employees will be entitled to 80% of their weekly earnings as sick pay, a significant departure from the current rule which requires workers to be off sick for over three days and earn at least £123 per week to qualify.
Work and Pensions Secretary Liz Kendall stated, “No one should ever have to choose between their health and earning a living. This landmark change is a step towards ensuring that.” The government estimates that approximately 1.3 million low-wage earners who fall ill will benefit from the scheme, receiving the lower of 80% of their average weekly pay or the existing statutory sick pay rate of £116.75 per week.
While the British Chambers of Commerce described the new rate as a “fair compromise”, concerns have been raised that providing sick pay from day one might lead to higher absenteeism, potentially causing operational challenges for smaller businesses. Jane Gratton, deputy director of public policy at the BCC, warned, “Employers often struggle to cover shifts at short notice, and increased absenteeism could disrupt service for customers.” Critics note that the government’s impact assessment did not produce sufficient evidence regarding the potential for unintended consequences.
The revised sick pay measure forms part of broader updates to the Employment Rights Bill, which also aims to enhance flexible working rights and improve access to unpaid parental leave. However, with concurrent rises in the minimum wage and employer National Insurance Contributions, some business groups fear that the combined effect of these changes could dampen growth and hinder job creation.
Trade unions, including the TUC, have urged the government to consider raising the replacement rate further, with calls for rates of no less than 95% for the lowest-paid workers. TUC general secretary Paul Nowak remarked, “This shouldn’t be the end of the story. We urge ministers to review statutory sick pay further to better protect those who earn the least.”
In contrast, the government maintains that the new measures strike a balance between supporting workers and mitigating additional costs for businesses, aiming ultimately to reduce reliance on benefits and improve living standards across the country.
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