From sniffles to systems: managing sickness absence in the ERA era

The Employment Rights Act 2025 introduced changes to statutory sick pay which took effect on 6 April 2026; removing the 3 day waiting period and the requirement to earn above the lower earnings limit to qualify for SSP.  These have materially shifted the cost and risk profile of sickness absence for employers.  Having a clear, well‑implemented approach to managing sickness absence is more important than ever, but it's an area where employers often get into difficulties.

What's changed?

At a basic level, employers should ensure they fully understand the new SSP framework. From 6 April 2026, SSP is payable from the first qualifying day of sickness, with no waiting days, and the Lower Earnings Limit has been removed. For many organisations, this brings part‑time, variable hours and lower‑paid workers into scope for the first time. SSP is now paid at the lower of 80% of the employee’s average weekly earnings or the statutory weekly rate. That calculation needs to be applied carefully, particularly where pay fluctuates.

Payroll systems should be reviewed to ensure they are applying the correct rate from day one and identifying newly eligible employees and workers. Employers should also revisit sickness absence policies and contracts to remove references to waiting days or eligibility thresholds which no longer apply. 

Enhanced sick pay

Enhanced sick pay arrangements also need attention. Many employers offer enhanced sick pay which mirrors the SSP scheme, with contractual pay topping it up for a defined period. If contracts or policies are drafted by reference to “SSP entitlement”, the April 2026 changes may automatically extend enhanced sick pay to groups previously excluded. Employers should review the interaction between contractual sick pay and SSP and consider whether changes are desirable and how they could be implemented.   Discretionary schemes will be easier to change than contractually binding schemes, but employers will need to consider whether a scheme is genuinely discretionary or may have contractual effect.   Contractual changes will require consultation and agreement by employees.   Employers should also bear in mind that changes to contractual sick pay will be restricted variations under the “fire and rehire” provisions of the ERA - see our previous blog for details. 

Record-keeping

Good record keeping in relation to sickness absence will now be even more critical. With SSP payable from day one, employers will need to update their practices. Managers should be trained to record the first day of absence, the reason given and when the employee is expected to return, even for single‑day absences. Self‑certification can still be used for short absences, but records should be consistent and retained. Where employees provide fit notes, these should be logged carefully, including any recommendations around adjustments or a phased return.

Clear records are not just about payroll compliance. They will be central evidence if an employer later needs to demonstrate that it followed a fair process, paid SSP correctly or took appropriate steps in relation to an employee’s health condition.  The Fair Work Agency will eventually have responsibility for enforcing SSP compliance by employers and will have extensive powers to examine documentation and records. 

Handling sickness absence

While ‘fit notes’ are a starting point for handling sickness absence, they are often not very informative and, in many cases, additional medical reports are necessary, particularly for longer‑term or recurring absence.   Employers should consider early on whether occupational health input is required.  As well as getting input at the right stage, it's important to ask the right questions.  These should focus on the practical issues for the business: the likely duration of absence, whether the condition may amount to a disability, and what adjustments might support a return to work. 

Employees should be consulted about the contents of any report and given the opportunity to comment. A failure to engage with the employee, even where an occupational health report is obtained, can significantly increase legal risk.

Legal risks  

The biggest risk area for sickness absence remains disability discrimination and the duty to make reasonable adjustments. Many conditions which lead to repeated or prolonged sickness absence will meet the definition of disability under the Equality Act. Employers should assume the duty may apply unless there is clear evidence to the contrary. Adjustments might include changes to hours, duties, workload, absence triggers, homeworking or a phased return to work. The fact that SSP is now payable from day one does not reduce these obligations, and, in practice, increases the scrutiny on employers’ handling of absence.

A common pitfall is rigid application of absence management triggers without considering whether an adjustment is required. Warning letters, capability proceedings or dismissal decisions taken without properly addressing reasonable adjustments can all give rise to claims. Employers should ensure managers are trained to pause formal processes where disability may be in play and to seek advice where appropriate.

Finally, communication matters. Employees should understand how sickness absence is reported, how SSP and contractual sick pay operate, and what support is available. Early, supportive contact during absence can help maintain trust and identify issues before they escalate. In the post‑April 2026 landscape, short absences are no longer cost‑free and long absences still carry significant legal risk. A consistent, documented and measured approach is the best way to manage both.