DWP warning over major change to sick pay rules that could affect 1.3million workers | Personal Finance | Finance

Proposed legislation would see as many as 1.3 million of the lowest paid employees qualifying for statutory sick pay (SSP).

The Employment Rights Bill, which the government says will tackle low pay and poor working conditions, passed its second reading by 386 votes to 105 after being debated by MPs on Monday.

Under the plans, the threshold preventing people earning less than £123-a-week from qualifying for SSP would be scrapped. It would also seek workers given the right to the benefit starting from the first day of illness, ending the current three-day waiting period.

Workers could receive between 60 and 80 percent of their earnings, with the current cap of £116.75-a-week maintained.

If the percentage is 80 percent, an employee earning £100 per week would receive £80 per week in SSP, while an employee earning £150 would be paid the flat rate of £116.75, according to the consultation published on the government’s website.

Liz Kendall, the Work and Pensions Secretary, 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.”

“It is time to end the agonising decisions faced by thousands of people each and every day,” she said, adding: “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 legislation, which ministers say will benefit 10 million people, would guarantee new rights for workers from day one of their employment including: parental and bereavement leave, sick pay, and protection from unfair dismissal, BBC News reports.

A ban on zero-hours contracts and fire and rehire practices is also included in the 28 changes planned. Most of the measures are not expected to be implemented before the autumn of 2026.

But the Federation of Small Businesses has warned that the bill will hamper companies across the country.

The FSB’s Tina McKenzie, said: “This legislation is rushed job, clumsy, chaotic and poorly planned – dropping 28 new measures onto small business employers all at once leaves them scrambling to make sense of it all.

“Beyond warm words, it lacks any real pro-growth element and will increase economic inactivity, seriously jeopardising the Government’s own 80 per cent employment target.

“There are already 65,000 fewer payroll jobs since Labour took power, and the new Government is sending out a troubling signal to businesses and investors.”