The Sickness Changes That Will Cost UK Business £1 Billion - Your Action Plan
Top tips to prepare for changes to sickness absence in April 2026
April 2026 is coming fast. And with it, sickness absence changes that will cost UK businesses over £1 billion annually.
If you think this won't affect you, think again. An employee earning £100/week currently gets nothing when they're off sick. From April 2026? They'll get £80/week statutory sick pay.
Every day off will cost you more. Every employee will be entitled to sick pay from day one, regardless of earnings.
The businesses that prepare now will manage these costs. Those that don't will see their salary budgets bills explode.
What's Actually Changing
The changes are currently working their way through parliament. There is little indication that things will change significantly but there may be updates to the finer details (keep an eye out on my posts and newsletter, I’ll share when things are updated). Currently this is what we know is proposed:
π° Lower earnings limit removed Currently, employees must earn £123/week to get statutory sick pay. From April 2026, all employees get SSP regardless of earnings. It is likely that there will be an increase to the SSP rate, as there normally is each tax year.
β° 3-day waiting period eliminated No more three-day qualifying period. Employees get paid from the first day they're off sick.
π Payment rate increased 80% of weekly earnings OR the statutory rate, which is currently £118.75 (whichever is lower). This is a significant increase for many workers.
The impact? Millions more employees will be entitled to sick pay, and you'll pay it from day one instead of day four.
The Real Cost to Your Business
π₯ More people eligible Part-time workers, casual workers, and low earners who previously got nothing will now all be entitled to SSP.
β‘ Earlier payments Instead of waiting three days, you pay from day one. That's three extra days per sick episode.
π Higher rates 80% of earnings means higher payments low earning employees.
Example: A full time employee earning £200/week who takes five days off sick:
- Currently: 2 days of SSP at £118.75/week (£47.50 total)
- From April 2026: 5 days at £118.75/week - capped at current SSP rate (£118.75 total)
That's a 150% increase in cost for one sick episode.
Five Actions You Must Take Now
π Review your sickness policies Make sure your absence management process is robust enough to handle increased costs. Once the legislation passes, update the three-day waiting period and earnings threshold to reflect the new reality.
π Train managers on return-to-work interviews and managing absence Every absence will cost more, so every return matters. Train managers to conduct meaningful return-to-work conversations after every absence - even half a day off. These conversations help identify patterns and prevent repeat absences.
COMING SOON – in September 2025 Bamboo People Solutions will be launching a new e-learning module for managers on managing absence. This is aimed at supporting SME’s in improving their absence management process.
π Strengthen absence management Implement systems to track and manage absence patterns. Early intervention prevents long-term absence. Regular monitoring helps you spot problems before they become expensive.
π° Review company sick pay policies If you currently offer company sick pay above statutory levels, review how this aligns with the new SSP rates. You might be paying much more than you intended.
π Tighten record-keeping The Fair Work Agency launches in April 2026 alongside these changes. They'll be monitoring compliance. Ensure you have proper records of all sickness absence, return-to-work conversations, and payments made.
What This Means for Different Business Types
πͺ Small businesses with part-time staff You'll see the biggest impact. Many of your casual workers who previously got nothing will now be entitled to sick pay from day one.
π½οΈ Retail and hospitality With high staff turnover and many low-earning employees, your sick pay costs could double or triple.
π Manufacturing with shift workers More employees will be eligible, and you'll pay from day one instead of day four.
πΌ Professional services Junior staff and support roles earning below the current threshold will now be eligible for sick pay from day one, increasing your employment costs.
The Hidden Costs You Haven't Considered
π Administrative burden Processing sick pay from day one means more paperwork, more payments, and more tracking.
πΈ Cash flow impact Smaller businesses will feel the immediate impact of paying sick pay from day one, especially during winter months when absence typically peaks.
πCompliance monitoring The Fair Work Agency will have powers to investigate and fine businesses that don't comply. Poor record-keeping could be expensive.
Planning Your Budget
π Calculate your current sick pay costs Look at last year's absence data. How many employees took sick leave? How many days total?
π’ Model the new costs Apply the new rules to your historical data. Remove the three-day waiting period. Include previously ineligible employees. Calculate the difference.
π Plan for increased absence When sick pay is more generous and available from day one, some businesses may see increased absence rates. Factor this into your planning.
The Reality Check
These changes are happening whether you're ready or not. The businesses that will thrive are those preparing now, not those waiting until April 2026.
Review your policies, train your managers, strengthen your processes, and prepare your budget.
The cost of preparation is nothing compared to the cost of being unprepared when these changes hit.
Your competitors are probably hoping these changes will go away or get delayed. They won't.
Use this time wisely. Get your systems right now, while you have time to do it properly.
Because from April 2026, every day off will cost you more.
Need help preparing for the sickness absence changes? The businesses that act now will manage these costs much better than those that wait.
Coming soon – subscribe to my newsletter for an article on proactive steps you can take to prevent and reduce sickness absence in your business.
