In early 2025, UK ministers will make decisions that could have a profound impact on low-paid workers, particularly regarding sick pay. For many, these decisions will influence their household budgets and financial security.
For some workers, being off sick simply means taking time away from work and receiving their regular pay. But for others, especially low-paid and part-time workers, sick pay is often insufficient or unavailable altogether.
The Current Sick Pay System
Statutory Sick Pay (SSP) in the UK is currently set at £116.75 per week, but this is only paid after the third day of absence. Furthermore, more than a million workers earn too little to qualify for SSP, often because they work part-time or earn below the lower earnings limit. These workers face a dilemma: either forgo pay while off sick or attend work while unwell, risking their own health and that of others.
In response, the government is considering changes to extend sick pay to all workers, starting from day one of illness and scrapping the earnings test. However, one key concern is the rate at which sick pay will be set, with some proposals suggesting it could be as low as 60% of wages.
The Impact of Proposed Changes
Let’s consider a few scenarios to illustrate how these changes could affect workers:
Scenario 1: Ella’s Struggle as a Part-Time Worker
Ella works as a cleaner in a school, earning minimum wage. Her partner, a full-time office worker, contributes to the household income. After Ella twists her ankle, she is unable to work for a week. However, due to her part-time hours, Ella doesn’t meet the current SSP threshold and therefore receives no sick pay.
Under the new proposals, Ella could receive a portion of her income, but if the rate is set at 60%, her sick pay would be much lower than her usual earnings. This reduction would put significant strain on her ability to manage everyday costs, such as food for her family and the weekly utility bills.
Scenario 2: Mark’s Challenge as a Single Parent
Mark is a single parent who works as a part-time delivery driver. He has two young children and struggles to make ends meet. When he catches a severe cold, he is unable to work for several days. As a low earner, Mark doesn’t qualify for SSP, leaving him without income while he recovers.
Mark receives Universal Credit, but this doesn’t provide immediate relief. The proposed changes could allow him to receive sick pay based on his earnings, but at a reduced rate of 60%. This cut could result in a major reduction in his household budget, affecting his ability to buy groceries and pay for his children’s essentials.
Scenario 3: Tom’s Double Job Dilemma
Tom works two part-time jobs—one as a barista and the other in a retail store. He supports his wife, who works full-time as a nurse, and their two children. When Tom is injured in a car accident and unable to work for several months, he faces a significant loss of income.
Under the current system, Tom would be entitled to SSP, but if the 60% rate is implemented, his sick pay would be drastically reduced. This reduction would leave Tom and his family struggling to pay for basic necessities, such as rent and food. In this scenario, the financial shortfall could have long-term consequences on his family’s well-being.
What Does This Mean for Employers?
As an employer, it’s essential to understand the potential impact of these changes. While expanding sick pay access is a positive step, it’s vital that the government ensures the amount is adequate for low-paid workers. Employers need to be prepared for the changes in legislation and ensure their sick pay policies are up to date.
How Swan HR Can Help
At Swan HR, we recognise the challenges that sick pay can present, particularly for low-paid workers. We can help your business ensure it is compliant with the latest HR regulations and help support your employees in times of illness. Whether you need to review your sick pay policies or require assistance navigating these changes, we’re here to provide expert HR advice and support.
Comments