The Employment Rights Bill continues to make its way through the parliamentary process, with some commentators predicting that it may gain Royal Assent by summer 2025. This is a significant and complex piece of legislation which will have a profound impact on the employment relationship. Those that engage staff need to be prepared, and in the case of recruitment agencies, ensure they’re working with the best umbrella companies that can help them navigate this challenging period.
One such example of change that is on the horizon relates to statutory sick pay (SSP). SSP is the minimum statutory payment that an employee is entitled to during periods when they are unable to work due to illness. It’s the employer’s responsibility to administer and pay the SSP for a period of up to 28 weeks.
Removal of the Lower Earnings Limit
Currently, to qualify for SSP, employees must earn an average of at least £125 per week. This is known as the Lower Earnings Limit, and those who earn less than £125 per week are not entitled to SSP. The Employment Rights Bill will remove this criterion, meaning that SSP will be available to all employees, even the lowest earners. Once this provision of the Employment Rights Bill comes into force, all employees will receive either the flat rate of SSP or 80% of their normal weekly earnings, whichever is lower.
Day one of sickness
There is a second part to the SSP changes: the waiting period is being removed. Currently, SSP is not payable for the first three qualifying days of a sickness period. It only becomes payable from day four. However, once this change comes in, employees will be entitled to SSP from day one of their illness.
Knowledgeable and adaptable partnership
It’s not known when these SSP provisions are coming into force. However, as a prediction, we would suggest April 2026. The Employment Rights Bill represents a significant shake-up of employment law, with various measures expected to come into effect throughout the next few years, including those relating to zero hours working and unfair dismissal. This will inevitably increase cost and pressure not just for recruitment agencies, but those umbrella companies that employ the worker and manage these obligations and risks.
On top of these changes, claims to employment tribunals are likely to increase both by virtue of the increased time limit for bringing claims (from three months to six months), and the increasingly litigious world that we now live in.
It’s therefore a good idea for you to start preparing for the Employment Rights Bill now by reviewing the Umbrella companies that you work with and by consolidating your PSL to those trusted partners that can navigate and adapt to the changing legislative landscape without exposing you to risk.
