Upcoming changes outlined in the Employment Rights Bill would significantly affect payroll processing, particularly regarding Statutory Sick Pay (SSP).
One of the most notable changes is the removal of waiting days. From now on, any absence due to incapacity will be treated as a period for SSP eligibility from day one. This simplifies payroll processing, as HR and payroll professionals will no longer need to track linked periods to determine entitlement.
While this change slightly reduces administrative tasks, there is more to consider.
SSP will now be available to all employees, including those earning below the Lower Earnings Limit. The payment rate will vary based on individual earnings. The amendment to the Social Security Contributions and Benefits Act (SSCBA) 1992, section 157, states:
The weekly rate of SSP that an employer must pay is the lower of:
(a) £116.75, or
(b) a prescribed percentage of the employee’s normal weekly earnings.
This means payroll teams will need to perform additional calculations for lower earners who may not qualify for the full SSP rate. It has been speculated that this process is likely to resemble the average weekly earnings calculations used for Statutory Maternity Pay (SMP), although the specific percentages and mechanisms are still to be confirmed.
It is understood that the Department for Work and Pensions (DWP) and the Department for Health and Social Care (DHSC) will be launching a consultation for interested persons to provide feedback on the proposed changes.
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