Bills & proposals

Upcoming changes to be aware of

Statutory Sick Pay (SSP) reforms

As part of the government’s wider ‘Plan to Make Work Pay’, key reforms are being introduced to strengthen Statutory Sick Pay (SSP) – with two significant changes on the horizon.

Firstly, SSP is set to move from a fixed weekly rate to an earnings-based model, calculated at 80% of an employee’s average earnings.

This aims to provide more meaningful financial support, particularly for lower-paid workers, without placing excessive pressure on employers.

Secondly, the government has confirmed that the Lower Earnings Limit (LEL) – the minimum earnings threshold to qualify for SSP – will be removed as an entitlement condition.

This change is designed to ensure that more employees, particularly those in insecure or lower-paid roles, are covered by the safety net of SSP.

This reform reflects a broader shift towards greater employee protections – and for payroll teams, it’s one to watch closely.

Extension to Bereavement Leave for miscarriages

Under Labour’s proposed ‘Make Work Pay’ reforms, bereavement leave rights are set to be extended to parents who experience miscarriage before 24 weeks of pregnancy.

Currently, statutory parental bereavement leave and pay only apply when a child is stillborn after 24 weeks of pregnancy or dies under the age of 18.

This proposed extension would give parents the right to two weeks of paid bereavement leave in the event of a miscarriage at any stage of pregnancy, including the first 24 weeks.

The move follows recommendations from the Women and Equalities Committee (WEC), whose report highlighted that the grief experienced before and after the 24-week mark is comparable – and that current sick leave provisions are ‘inadequate and inappropriate’.

The WEC also pointed out that many parents are left financially unsupported due to limited access to statutory sick pay (SSP), making it difficult to take the time they need to recover physically and emotionally.

Key points

The right would apply regardless of gestational stage, extending legal protection beyond the current 24-week threshold.
Entitlement includes two weeks of bereavement leave, with pay expected to mirror existing parental bereavement pay.
No confirmed implementation date has been set, but this is part of Labour’s wider proposed reforms to improve workers’ rights.

What you need to know

SSP will be calculated at 80% of average earnings instead of a flat weekly rate.
The LEL will be scrapped, meaning employees will no longer need to meet a minimum income threshold to qualify for SSP.
These changes will be introduced via an amendment to the Employment Rights Bill, which is currently progressing through Parliament.
A timeline for implementation has not yet been confirmed, but the amendment will be considered at the Report Stage in the House of Commons.

More updates on neonatal care leave and pay

Employers should now prepare for the official implementation of the Neonatal Care (Leave and Pay) Act, coming into effect April 2025.

Employers must act now to prepare payroll systems, policies, and processes to ensure compliance. Here’s a breakdown of the key updates and what they mean for your business.

What’s being introduced?

The Act introduces up to 12 weeks of paid leave for parents whose child requires neonatal care.

This is in addition to existing parental leave entitlements and is designed to provide financial and emotional relief during their child’s stay in neonatal care.

This benefit is especially critical for parents during the first 28 days after their child’s birth, should they require specialised neonatal care.

Designed to integrate smoothly with existing payroll processes, this statutory allowance aims to provide employees with seamless access to this support from day one of employment.

The Act applies across England, Scotland, and Wales, ensuring a unified approach to neonatal care support across the UK.

What's the eligibility?

Leave is available from day one of employment, subject to specific criteria. Pay is available if continuity of service and earnings tests are met.

More updates on neonatal care leave and pay

Who qualifies?

Parents, adoptive parents, or carers with main responsibility for the child’s upbringing.

When does it apply?

When a child enters neonatal care within 28 days of birth and stays for at least seven consecutive days.

Structuring pay

The Act introduces a two-tier structure for managing leave and pay:

Tier one: Leave and pay during the neonatal care period or the first week after discharge. This tier allows flexible leave arrangements with minimal notice, enabling parents to respond to their child’s immediate medical needs.
Tier two: Leave and pay from the second week post-discharge up to 68 weeks following the child’s birth. This tier requires leave to be taken in a single block with more formal notice requirements.

What do businesses need to do?

HMRC’s Software Developer Support Team (SDST) have already laid the groundwork for this transition, and payroll product teams are actively implementing these changes. Keep an eye out for further updates from HMRC’s SDST.

It's essential for employers and payroll providers to stay on top of these developments, updating payroll systems in advance to support this new allowance. Doing so ensures compliance and extends the Act’s intended support to employees who need it most.