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Significant Update to Sick Pay for Low-Paid Workers in the UK

In a substantial shift aimed at enhancing living conditions, over 1 million of the UK’s lowest-paid employees will soon receive enhanced sick pay, amounting to 80% of their weekly earnings from the very first day of illness. This change reflects a commitment to provide greater financial security during periods of sickness.

The United Kingdom currently has one of the lowest statutory sick pay rates among developed nations, as reported by the Resolution Foundation. Presently, individuals earning less than £123 per week are not eligible for any sick pay. For those above this threshold, the current pay rate stands at just £116.75 weekly, set to increase to £118.75 (approximately £3 per hour) for full-time employees from April, but it only becomes payable after a three-day waiting period.

The anticipated reforms, which are set to be implemented next year, will ensure that workers earning below the £123 threshold receive sick pay calculated at 80% of their earnings. The government estimates that these changes will benefit approximately 1.3 million low-income workers, who could see an increase of up to £100 per week compared to the existing system. This adjustment is designed to mitigate the financial pressure that forces individuals to leave their jobs while unwell.

The government’s commitment to reform sick pay was made last year, with particular consideration for those in multiple job roles—such as cleaners, carers, and parents balancing childcare responsibilities—who are expected to gain the most from this adjustment. Originally, there were discussions regarding a lower rate of sick pay, potentially starting at 60% of weekly pay, but the government chose to adopt the more favorable rate of 80%.

Liz Kendall, the Secretary of State for Work and Pensions, stated, “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. No one should ever have to choose between their health and earning a living, which is why we are making this landmark change. The new rate is good for workers and fair on businesses as part of our plan to boost rights and make work pay, while delivering our plan for change.”

Despite the positive developments, some workers’ rights advocates may feel let down. The Trades Union Congress (TUC) had previously urged the government to establish a sick pay rate for those earning under the £123 threshold at a minimum of 95% of their salary.

Paul Nowak, TUC’s General Secretary, acknowledged the improvements in sick pay but emphasized, “This shouldn’t be the end of the story. We urge ministers in future to raise the replacement rate for the lowest earners beyond 80% and undertake a wider review of the statutory sick pay rate.”

These revisions to sick pay will be incorporated alongside a range of modifications to the employment rights bill, which is set to be presented to parliament this week. Other proposed changes include extending the probationary period for new employees to nine months, as opposed to the previously anticipated six months, and the removal of the discussed “right to switch off” after working hours during evenings and weekends.

Source
www.theguardian.com