As the Employment Rights Bill progresses through Parliament, it’s vital for recruitment agencies and umbrella companies to assess how the proposed changes could affect contractor employment. With significant changes on their way, agencies must ensure they are working with reliable and compliant umbrella companies to handle any adjustments smoothly.
One of the standout proposed changes involves Statutory Sick Pay (SSP)—a crucial area for both employers and workers.
Scrapping of Lower Earning Limit
Currently, employees must earn at least £123 per week to qualify for SSP. Those earning below this limit are not entitled to receive it. The new bill proposes to abolish this lower earnings limit, making SSP available nationwide.
Under the proposed rules, eligible employees will receive either the flat SSP rate or 80% of their average weekly earnings, whichever is lower. This aims to make support more accessible across all income levels.
SSP Payable from Day One
Currently, SSP is not payable for the first three consecutive days of sickness absence. The Employment Rights Bill proposes removing this window ensuring that workers receive SSP from day one of illness.
Implications of the Employment Rights Bill
Although the exact timeline remains unclear, current industry speculation suggests these reforms could come into effect around April 2026. Beyond sick pay, the Bill includes changes to Zero-hours contracts and Unfair dismissal. These changes could impact costs for both agencies and umbrella companies. We are likely to see a rise in employment tribunal claims, especially as more workers gain access to enhanced employment rights.
It’s best to prepare before the changes are implemented. A good place for agencies to begin is by reviewing their Preferred Supplier List (PSL) of umbrella companies.
Ensuring their working with only trustworthy, well-informed umbrella companies to adapt efficiently to any regulatory changes.
Related article: Why choose an umbrella company?
The contractor life beckons with its flexibility and control. But let’s be honest, navigating the world of payments, taxes, and paperwork can feel like a boss battle with way too many levels. Enter Focused, your friendly neighbourhood umbrella company – here to simplify your contractor journey and empower you to focus on what you do best.