UK Workers Win, but at What Cost? The Debate Over New Sick Pay Reforms

In a landmark policy shift, the UK government has announced that over one million low-paid workers will now be entitled to 80% of their weekly salary as sick pay from the first day of illness. The move, part of the forthcoming Employment Rights Bill, marks a significant departure from the current system, which excludes workers earning less than £123 a week from receiving statutory sick pay (SSP).

A Step Forward for Workers

Under the current framework, only those earning above the £123 threshold qualify for SSP, set at £116.75 per week (rising to £118.75 from April). Those earning less are left without any financial support during periods of illness. The new reform aims to close this gap, ensuring that all workers receive either 80% of their average weekly wage or the statutory rate, whichever is lower.

Work and Pensions Secretary Liz Kendall hailed the policy as a crucial step towards fairness in the workplace. "For too long, sick workers have had to decide between staying home and losing a day's pay or soldiering at their own risk just to make ends meet. No one should ever have to choose between their health and earning a living, which is why we are making this landmark change," Kendall said.

The changes, which are set to be introduced next year, could see some workers up to £100 better off per week compared to the current system. The government argues that this measure protects employees and promotes a healthier workforce by reducing the pressure to work while unwell.

Businesses Sound the Alarm

Despite the benefits for workers, business groups have raised concerns about the potential repercussions of the new policy. The British Chambers of Commerce (BCC) has warned that allowing sick pay from day one could lead to higher levels of absenteeism, particularly in small businesses that may struggle to find last-minute cover for absent staff.

"Employers often struggle to find shift cover at short notice, leading to disruption for customers," said Jane Gratton, deputy director of public policy at the BCC. "The government's impact assessment did not produce compelling evidence on the day-one rights issue, so there may be unforeseen consequences."

The Federation of Small Businesses (FSB) has echoed these concerns, warning that additional costs could force some companies to reconsider their hiring plans. A recent FSB survey suggested that a third of its members were likely to reduce staff numbers in response to the new measures.

The Push for More

While the policy has been welcomed as a step in the right direction, trade unions argue it does not go far enough. The Trades Union Congress (TUC) and other labour organisations have long campaigned for a full review of SSP rates, arguing that the 80% threshold still leaves many low-paid workers struggling financially when they fall ill.

TUC General Secretary Paul Nowak urged the government to go further: "This shouldn't be the end of the story. We urge ministers to raise the replacement rate for the lowest earners beyond 80% in the future and undertake a wider review of the statutory sick pay rate."

Union leaders have pointed out that even under the new system, some workers could still earn as little as £3 an hour when sick pay is applied—a rate they argue remains unacceptably low.

Balancing Act: Worker Rights vs. Business Realities

The debate over statutory sick pay reform highlights a fundamental tension between workers' rights and the financial burden on businesses. The reform offers workers a long-overdue safety net that could prevent them from choosing between health and economic survival. The new costs and potential for increased absenteeism present significant operational challenges for employers and tiny companies.

As the Employment Rights Bill moves through Parliament, the extent to which these concerns are addressed will be crucial. Will additional government support be provided to ease the burden on businesses? Could a tiered approach mitigate the risks of abuse while still protecting vulnerable workers?

The changes are set to bring relief to 1.3 million workers across the UK. Whether this reform is a sustainable solution or a source of unintended economic strain remains to be seen.