HOT TOPIC
Payroll: the next wave of changes
Samantha O’Sullivan ChFCIPPdip, CIPP Policy and Advisory Lead, talks through some recently announced updates to statutory sick pay (SSP), the Parental leave and pay review call for evidence (CfE) and the Employment Rights Bill (ERB) roadmap… it’s going to be another busy couple of years for the industry
S ince Labour’s pledge to ‘Make work pay’, the ERB has been making its way through the parliamentary process. On 1 July, the Government published a roadmap comprising of policy changes to boost rights for half of all UK workers and provide certainty to employers. You can read the press release and roadmap documents here: https://ow.ly/evqV50WlBWr and https:// ow.ly/832U50WlBXm. Policy changes to SSP One of the key announcements of utmost importance to the payroll industry, and in turn to every employer throughout the UK, was the policy change to SSP. This is something the CIPP’s policy and research team has been working on with the Department for Work and Pensions (DWP) and the Department of Health and Social Care Joint Work and Health Directorate since last year. The roadmap has confirmed the changes to SSP will be implemented
from April 2026, which means, “Up to 1.3 million working people – some of the country’s lowest-paid employees – will get access to statutory sick pay for the very first time.” What changes are coming into play? Changes to SSP have been reflected in the ERB. The two changes we’ll see are: l SSP will be payable from day one of sickness l SSP will be payable to those earning less than the lower earnings limit (LEL). Let’s look at these in closer detail… SSP from day one SSP will now be payable from day one of sickness. This new measure means employees will take the time off work when they need it the most, at the start of sickness, to ensure they can rest, recover and get back to work sooner. Most importantly, they’ll be entitled to SSP for that period. When speaking to CIPP
members, concern was raised around the misuse of ‘Blue Mondays’ or a ‘Christmas shopping day’ once employees get paid from day one of sickness. This is a valid concern, and one which needs to be considered when looking at company policies and staff handbooks. Employers and agents need to review the period of incapacity for work (PIW) to calculate entitlement to SSP. Therefore, it feels right that this isn’t being abolished, but instead, amended, to reflect the new way of calculating SSP. SSP to be paid to those earning under the LEL SSP will be paid to those earning under the LEL, and this will be paid at 80% of an employee’s normal weekly earnings, where 80% of their normal weekly earnings is less than the flat rate of SSP. This does mean that for some employees who earn at, or slightly above the LEL, they will be paid a lower weekly rate of SSP than before. The DWP stated
| Professional in Payroll, Pensions and Reward | September 2025 | Issue 113 64
Made with FlippingBook - Online magazine maker