Statutory Sick Pay Changes April 2026: What SMEs Need to Know

Statutory Sick Pay Changes April 2026: What SMEs Need to Know

 

From April 2026, Statutory Sick Pay (SSP) reforms mean that rules will change for all UK employers, including SMEs.

For small and medium-sized businesses, these reforms are more than an administrative tweak – they will affect costs, how an employer manages sickness absence, and how employers support an employee’s return to work.

From our perspective as an English law firm advising businesses on Employment Law day to day, the key message is simple: sickness absence policies written even two or three years ago are unlikely to be fit for purpose.

 

What are the Statutory Sick Pay changes coming in April 2026?

 

Significant reforms take effect from 6 April 2026, under the Employment Rights Act 2025:

• SSP will be payable from day one of sickness absence. The current three unpaid “waiting days” will be removed.
• All employees will qualify for SSP, regardless of how much they earn. The lower earnings limit is being scrapped.
• SSP will be calculated differently for lower earners. Employees will receive either 80% of their average weekly earnings or the statutory rate – whichever is lower.

This means that many people who were previously not entitled to sick pay will now qualify, including part-time and lower paid staff.

The rate of SSP will also increase to £123.25 with effect from 6 April 2026.

 

What Statutory Sick Pay reforms mean for SMEs

 

For smaller employers, the cost impact is an obvious concern. Paying sick pay from day one may increase short-term absence costs, particularly where employers pay only SSP and there is no enhanced contractual pay for sickness absence.

But there is also a real opportunity. Research consistently shows that people recover better – and return to work sooner – when absence is handled proactively and supportively. Poorly managed sickness absence, on the other hand, often leads to longer absences, disengagement, and disputes.

 

Managing return-to-work after sickness absence

 

Alongside SSP reform, there is a growing government focus on helping people stay in work where possible. Fit notes increasingly emphasise what someone can do, rather than simply signing them off completely.

This puts the spotlight firmly on return-to-work processes. Employers should be:

• Holding return-to-work conversations after every period of sickness
• Considering temporary adjustments such as reduced hours, amended duties or phased returns
• Keeping clear, supportive records of discussions and agreed actions

For SMEs without HR teams, this can feel daunting – but a simple, consistent approach is usually enough.

 

Why policies must be updated now

 

Many sickness absence policies still refer to waiting days, earnings thresholds, or outdated fit note processes. From April 2026, those references will be wrong.

Out-of-date policies increase the risk of:

• Paying sick pay incorrectly
• Treating employees inconsistently
• Employee complaints or grievances
• Reputational damage if staff feel unsupported

Policies should clearly explain:

• When sick pay starts
• How sick pay is calculated
• What employees need to report, when and to whom
• How return-to-work will be managed

Just as importantly, managers need to understand those policies and apply them fairly.

 

How can SMEs get ahead of the Statutory Sick Pay reforms?

 

SMEs that prepare now will be in a far stronger position when the changes take place in April. Reviewing sickness policies, training managers, and tightening return-to-work processes can also help control costs whilst also staying compliant.

Handled well, these reforms are not just about legal compliance – they are about building healthier, more resilient workplaces that support people to stay in work and perform at their best.

 

How our expert Employment Law team at Banner Jones can help you

 

At Banner Jones Solicitors, we combine decades of experience with practical, business-focused solutions. Our Employment Law experts in Sheffield, Chesterfield and Mansfield provide tailored advice to help you stay compliant, protect your reputation, and avoid costly Employment Law claims. Whether you need policies reviewing, training, or immediate legal support, we’re here to help.

 

Get in touch with the team today or email employment@bannerjones.co.uk

 

FAQs

 

When do the Statutory Sick Pay changes take effect?

 

Major reforms come into force on 6 April 2026, when eligibility and payment rules will change for all UK employers. 

 

Will employers have to pay sick pay from day one?

 

Yes. From 6 April 2026, Statutory Sick Pay must be paid from the first day of sickness absence. The current three unpaid waiting days will be removed.

 

Do part‑time and low‑paid employees now qualify for SSP?

 

Yes. From 6 April 2026, the lower earnings limit will be removed, meaning all employees will be entitled to Statutory Sick Pay, regardless of how much they earn. This includes part‑time and lower‑paid staff who were previously excluded.

 

How much Statutory Sick Pay will employees receive?

 

Employees will receive either 80% of their average weekly earnings or the statutory SSP rate, whichever is lower. The flat SSP rate is expected to rise to £123.25 per week from 6 April 2026.

 

Does this apply to small businesses as well as large employers?

 

Yes. These changes apply to all UK employers, including SMEs. There are currently no exemptions for small businesses, which is why reviewing policies and payroll processes early is so important.

 

Do employers still need fit notes from employees?

 

Yes. Employees can still self‑certify for the first seven days of sickness absence. After that, employers can request a fit note from their employee’s GP, which may state the employee is “not fit for work” or “may be fit for work” with adjustments.

 

What does “may be fit for work” mean in practice?

 

It means the employee could return to work with support or temporary adjustments, such as reduced hours, lighter duties or a phased return. Employers should discuss these options with the employee before treating the employee as unfit for work.

 

Do employers need to update their sickness absence policies?

 

In most cases, yes. Policies that refer to waiting days, earnings thresholds or outdated SSP rules will be incorrect from 6 April 2026. Keeping policies up to date helps ensure compliance and consistent treatment of staff.