[UK] Lowest-income workers will be eligible for sick pay

The UK’s 1.3 million lowest-income workers will be eligible for sickness payments - at a rate of 80 per cent of their usual pay - from their employers for the first time, under plans to be formally presented by ministers this week, Financial Times reports.

The changes will form part of Employment Rights Bill tweaks.

Workers earning less than £123 a week have previously not been eligible for statutory sick pay (SSP) and Ministers have reportedly been promising to strengthen it for some time. For other workers, a rate of £116.75 a week kicks in only after three days of sickness. From April, this rate will rise to £118.75 a week. 

Under the changes, all workers will be eligible for the payments from day one of sickness and those taking home less than £123 a week will receive them for the first time. In a recent consultation, the government proposed that bosses would have to pay 60 per cent, 70 per cent or 80 per cent of usual pay to those on the lowest incomes.  

Before the bill returns to parliament for its report stage this week, ministers have chosen the highest of these options. Their decision means low-paid workers will receive whichever is lowest out of the 80 per cent of average weekly earnings or the universal rate. 

A government statement said, “The move will mean some of the lowest earners are expected to be up to £100 better off per week, compared to the current system.” 

However, that extra money will all be paid for by companies who have expressed concern about the scope of the government’s workplace reforms in the wake of increases in employer national insurance contributions and the minimum wage. 

The government’s impact assessment of the legislation reportedly estimated an annual cost of up to £5 billion a year to UK businesses. 

According to Financial Times reporting, Liz Kendall - Work and Pensions Secretary - said the “landmark change” would mean people would no longer have to choose between their health and earning a living. 

“For too long, sick workers have had to decide between staying at home and losing a day’s pay or soldiering on at their own risk just to make ends meet,” Ms Kendall said. 

But Alex Hall-Chen - principal policy adviser at the Institute of Directors - said the reforms would “significantly increase the cost and risk of employing staff”, adding that a 60 per cent rate would “strike the right balance” between supporting people on low incomes and affecting business. Other business groups have reportedly said they are less concerned about the 80 per cent rate of SSP for low earners than the entitlement of Britain’s entire workforce to sick pay from the first day of absence. 

Speaking to Financial Times, Jane Gratton - deputy director of public policy at the British Chambers of Commerce - described the 80 per cent rate as “a fair and reasonable compromise”. However, Ms Gratton warned that companies were concerned the day-one entitlement “could lead to an increase in staff absenteeism that will be difficult for small and medium-sized enterprises to accommodate”.

Source: Financial Times

(Quotes via original reporting)

The UK’s 1.3 million lowest-income workers will be eligible for sickness payments - at a rate of 80 per cent of their usual pay - from their employers for the first time, under plans to be formally presented by ministers this week, Financial Times reports.

The changes will form part of Employment Rights Bill tweaks.

Workers earning less than £123 a week have previously not been eligible for statutory sick pay (SSP) and Ministers have reportedly been promising to strengthen it for some time. For other workers, a rate of £116.75 a week kicks in only after three days of sickness. From April, this rate will rise to £118.75 a week. 

Under the changes, all workers will be eligible for the payments from day one of sickness and those taking home less than £123 a week will receive them for the first time. In a recent consultation, the government proposed that bosses would have to pay 60 per cent, 70 per cent or 80 per cent of usual pay to those on the lowest incomes.  

Before the bill returns to parliament for its report stage this week, ministers have chosen the highest of these options. Their decision means low-paid workers will receive whichever is lowest out of the 80 per cent of average weekly earnings or the universal rate. 

A government statement said, “The move will mean some of the lowest earners are expected to be up to £100 better off per week, compared to the current system.” 

However, that extra money will all be paid for by companies who have expressed concern about the scope of the government’s workplace reforms in the wake of increases in employer national insurance contributions and the minimum wage. 

The government’s impact assessment of the legislation reportedly estimated an annual cost of up to £5 billion a year to UK businesses. 

According to Financial Times reporting, Liz Kendall - Work and Pensions Secretary - said the “landmark change” would mean people would no longer have to choose between their health and earning a living. 

“For too long, sick workers have had to decide between staying at home and losing a day’s pay or soldiering on at their own risk just to make ends meet,” Ms Kendall said. 

But Alex Hall-Chen - principal policy adviser at the Institute of Directors - said the reforms would “significantly increase the cost and risk of employing staff”, adding that a 60 per cent rate would “strike the right balance” between supporting people on low incomes and affecting business. Other business groups have reportedly said they are less concerned about the 80 per cent rate of SSP for low earners than the entitlement of Britain’s entire workforce to sick pay from the first day of absence. 

Speaking to Financial Times, Jane Gratton - deputy director of public policy at the British Chambers of Commerce - described the 80 per cent rate as “a fair and reasonable compromise”. However, Ms Gratton warned that companies were concerned the day-one entitlement “could lead to an increase in staff absenteeism that will be difficult for small and medium-sized enterprises to accommodate”.

Source: Financial Times

(Quotes via original reporting)