Small businesses are raising concerns about rising costs and potential misuse of sick leave after changes to Statutory Sick Pay came into force this month.
New rules introduced on April 6 mean employees can now claim Statutory Sick Pay from the first day of absence, while the removal of the Lower Earnings Limit means even the lowest-paid workers are entitled to support.
The changes are designed to strengthen financial protection for workers, but employers say they are still adjusting to the impact, with many lacking the systems needed to manage absence effectively.
Research from The HR Dept, which supports more than 6,000 small and medium-sized enterprises, found that 46 percent of SMEs were unprepared for the reforms, while three quarters feared they could face unintended financial consequences.
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The concern reflects wider pressures on smaller firms, which often operate with tighter margins and fewer resources to absorb additional costs linked to sickness absence.
Cost fears and absence concerns grow
The removal of the three-day waiting period has changed the dynamic of short-term absence, particularly for businesses that previously relied on unpaid initial days as a deterrent.
Employers warned that the reforms could lead to an increase in short-term absences, especially in sectors that rely on shift work or part-time staff, where covering gaps can be costly and disruptive.
There are also concerns that some employees may feel more inclined to take sick leave for non-medical reasons, given that financial support is now available immediately.
These fears come as sickness absence remains a key issue for employers. Data from the Office for National Statistics shows millions of working days are lost each year to illness, with short-term absence making up a significant proportion of cases.
At the same time, policymakers have argued that earlier access to sick pay can help prevent presenteeism, where employees attend work while unwell, potentially reducing longer-term health issues and improving productivity.
Preparation and policy key to managing risk
Michaela Gartside, director at The HR Dept Bracknell, Windsor and Heathrow, said businesses that had already strengthened their absence management practices were better placed to manage the changes.
“Many UK businesses have avoided adopting a proactive approach to absence and have instead been relying on the three-day SSP waiting period as their de facto absence management policy,” she said.
“But for the 54% of businesses who are prepared versus the 46% who are not, the impact of the new rules will be marginal. That is because they have already invested in fair systems and robust HR practices, which naturally curb unnecessary sickness rates.”
She added that the focus should now be on improving how absence is managed rather than resisting the reforms. “The real risk is not the legislation; it is the failure to manage people fairly and effectively. The hallmarks of a good sickness absence policy have not changed in April 2026; they have simply become non-negotiable.”
Experts say clear policies, consistent processes and good communication are essential to prevent disputes and ensure absence is handled fairly.
Without these safeguards, employers may struggle to distinguish between genuine illness and other reasons for absence, particularly in cases involving caring responsibilities or travel disruption where employees may now be financially supported if they report sick.
The reforms form part of wider changes to employment rights aimed at improving job security and worker protections. But for many SMEs, the immediate priority is adapting quickly to avoid unintended costs and maintain productivity.
William Furney is a Managing Editor at Black and White Trading Ltd based in Kingston upon Hull, UK. He is a prolific author and contributor at Workplace Wellbeing Professional, with over 127 published posts covering HR, employee engagement, and workplace wellbeing topics. His writing focuses on contemporary employment issues including pension schemes, employee health, financial struggles affecting workers, and broader workplace trends.
- William Furney
- William Furney
- William Furney
- William Furney
