Major change to DWP sick pay rules could help up to 1.3million workers

Up to 1.3million of the lowest paid employees will qualify for statutory sick pay (SSP) for the first time under new workers rights reforms.

The Employment Rights Bill will scrap the threshold that prevents people who earn less than £123-a-week from qualifying for sick pay. It would also bring in the benefit from day one, scrapping the three-day wait before sick pay kicks in.

Ministers are looking at tapering payments so workers could get between 60% and 80% of their earnings, capped at the current rate of £116.75-a-week. If the percentage rate is 80%, an employee earning £100 per week would receive £80 per week in SSP, while someone earning £150 would be paid the flat rate of £116.75.

Work and Pensions Secretary Liz Kendall told the Mirror: “Sick employees face an agonising decision: stay home and lose a day’s pay, or soldier on and risk worsening their condition just so they can put food on the table and make ends meet. It’s a choice people shouldn’t have to make."

She added: "It is time to end the agonising decisions faced by thousands of people each and every day. It is time to fix our broken labour market and the poor pay, poor working conditions and poor job security that have been holding our economy back.”

The consultation was published as MPs debated the bill for the first time, which will overhaul workers' rights for 10 million Brits. The legislation includes plans to improve workers' rights from day one, including parental and bereavement leave and protection from unfair dismissal.

Workers could save up to £600 a year in lost income from the hidden costs of insecure work, such as childcare or transport to cover last-minute shifts - or losing out on hours altogether. Around 2.4 million people in the UK work irregular patterns like zero or low hours contracts or agency jobs.

Polling from the Living Wage Foundation polling suggests that these costs can total up to more than £50-a-month - or £600-a-year - for 17% of workers. For nearly half (48%) of workers it can amount to between £20 to £40-a-month (£240 to £480-a-year).

But the Government's impact assessment admits the plans will cost business up to £5 billion a year. Costs will be "proportionately higher" for small and micro businesses because of "admin and compliance burdens," the document said.

However the Government says that rules have to apply to all businesses to avoid creating a "two-tier workforce" where some people are entitled to rights where others are not.

Unison General Secretary Christina McAnea said the reforms offered an opportunity "to turn the tide on insecure employment and deliver the biggest boost to UK workplaces in a generation". She added: "Care staff, those working for private contractors delivering public services and others in precarious work must currently jump through hoops to get financial support when they fall ill.

"People are having to go in to work, infecting their colleagues and those they care for, instead of staying at home to recover. Sick pay for all at a proper rate will ensure no one has to live a hand-to-mouth existence."

TUC General Secretary Paul Nowak said the plans were good for workers, businesses and the wider economy. He said: "Driving up employment standards will boost living standards, productivity, and growth. That’s why the vast majority of managers support these plans.

“Most employers in this country treat their staff well and do not use exploitative practices like zero-hours contracts and fire and rehire. By levelling the playing field on workers’ rights and protections this bill will give people more predictability and control over their lives. And it will stop decent firms from being undercut by the bad."