Low paid workers to get 80% of salary when ill

More than one million low-paid workers in the UK are to be entitled to 80% of their weekly salary as sick pay from the first day of illness, under government plans.

At the moment, UK workers earning less than £123 a week are not entitled to any statutory sick pay.

“No one should ever have to choose between their health and earning a living, which is why we are making this landmark change,” said Liz Kendall, the Secretary of State for Work and Pensions.

The British Chambers of Commerce (BCC) called the 80% rate a “fair and reasonable compromise”, but warned that allowing sick pay from day one could lead to “an increase in staff absenteeism” that smaller firms could struggle to cope with.

“Employers often struggle to find shift cover at short notice, leading to disruption for customers,” said Jane Gratton, deputy director of public policy at the BCC.

“The government’s impact assessment did not produce compelling evidence on the day-one rights issue, so there may yet be unforeseen consequences.”

The government says the changes will mean about 1.3 million people on low wages who fall ill will receive either 80% of their average weekly earnings or statutory sick pay – which is currently £116.75 per week – whichever is lowest.

“The new rate is good for workers and fair on businesses as part our plan to boost rights and make work pay, while delivering our plan for change,” Kendall said.

However, some groups are asking the government to set sick pay for the lowest paid workers at no less than 95% of their weekly pay.

TUC general secretary Paul Nowak said: “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.”

The change to sick pay is part of a number of updates to the Employment Rights Bill expected to be announced on Tuesday, and aims to keep more people off benefits and boost living standards.

The bill, which was published last year, set out plans to improve sick pay and allow workers greater rights to ask for flexible working and unpaid parental leave.

However, the planned increase in workers’ rights, together with the rising minimum wage and hike in employers’ National Insurance, has led to criticism from many businesses, who say the combined impact will hit growth and employment.

At the weekend it emerged that the government would not be including the “right to switch off” for workers in the bill.

This measure had been proposed to stop employers contacting staff out-of-hours on phones, emails and texts.

A government source told the Sunday Times that: “The right to switch off is dead. We have to lower business compliance costs as much as possible.”