Managing staff sickness absence: what small employers actually need to know

In a small team, one person being off sick isn't a rounding error — it's a fifth of your capacity gone, orders that don't get fulfilled, and a WhatsApp message you're not sure how to reply to. Most small employers handle the first sickness absence on instinct, get it broadly right through luck, and only realise how much they didn't know when a second, longer or more complicated one arrives. The rules aren't complicated once you know them — the awkwardness comes from not knowing where the lines are.

Statutory Sick Pay is the floor, not the whole policy

Statutory Sick Pay (SSP) is the legal minimum you owe an eligible employee who's off sick, paid by you as the employer. Since 6 April 2026 it starts on day one — the three waiting days were abolished by the Employment Rights Act 2025 — and the lower earnings limit test went with them, so part-time and low-paid staff who previously qualified for nothing now qualify for something. The rate for 2026/27 is £123.25 a week, or 80% of the employee's average weekly earnings if that is lower, for up to 28 weeks. It's genuinely modest, which is exactly why so many small businesses assume 'we can't afford sick pay' when what they actually can't afford is enhancing beyond the statutory minimum — a different decision entirely. You don't need a company sick pay scheme to be legally compliant. You do need to know the SSP rules well enough to apply them consistently, because getting them wrong, even through ignorance, is still a legal exposure.

A written policy — even a short one — earns its keep here. It should say what counts as notifying you of sickness, by when, to whom, and what evidence is needed and from which day (self-certification for the first seven days, a fit note from a GP after that). Without it, every sickness becomes a fresh negotiation about what's reasonable, decided in the moment, under time pressure, which is exactly how inconsistent treatment creeps in.

The difference between short-term and long-term absence

Short, occasional absences — the odd day here and there — are usually best handled with a simple 'return to work' conversation: not an interrogation, just a brief, friendly check-in on the day someone's back, covering how they're feeling and whether anything work-related contributed. Done consistently for everyone, this alone catches a surprising amount: a pattern of Mondays off, a workload that's clearly become unmanageable, a personal issue that needs more support than a sick day.

Long-term absence — weeks rather than days — is a different problem and needs a different approach. Regular, low-pressure contact matters (not daily chasing, but a check-in every week or two), along with genuine curiosity about whether anything at work would help a return: adjusted hours, lighter duties, a phased comeback. For anything beyond a few weeks, getting occupational health input, even a one-off paid assessment, is usually money well spent — it gives you (and them) an independent, professional view on what's realistic, rather than guessing.

The mistake most small employers make isn't being too harsh on sickness. It's having no consistent process at all, so every case gets handled differently depending on how busy you are and how you feel about that particular person that week.

A worked example: what a single absence now costs

The April 2026 changes make this arithmetic quite different from the one most employers still have in their heads. Take a fitter earning £520 a week. SSP is the lower of £123.25 a week or 80% of average weekly earnings, and 80% of £520 is £416, so he gets the flat £123.25. On a five-day working week that is £24.65 for each qualifying day. Off Tuesday to Thursday with a stomach bug, he is now owed £73.95 — where before 6 April 2026 all three of those days were waiting days and he would have been owed nothing at all.

Now take a Saturday cleaner earning £110 a week. 80% of her earnings is £88, which is lower than £123.25, so £88 a week is what she gets. Under the old rules she earned below the £129 a week lower earnings limit and got no SSP whatsoever, which is exactly the gap the reform was aimed at.

Scale that across a five-person team. If everyone takes four sick days over the year, that is twenty qualifying days at £24.65 — about £493 that simply wasn't a cost before. One person off long-term for the full 28-week entitlement at the flat rate is £3,451. And none of it comes back: the Percentage Threshold Scheme that once let small employers reclaim some SSP was abolished in 2014, so every pound of it is yours.

Where the legal risk actually sits

The biggest risk isn't sick pay calculations — it's treating someone unfairly because of an illness or disability, whether that's through impatience, informal pressure to come back too soon, or simply not making reasonable adjustments that would help someone stay in work. If a condition meets the legal definition of a disability (broadly, a physical or mental impairment with a substantial, long-term effect on daily activities), you have specific duties to consider adjustments — a phased return, different hours, equipment, or a change in duties. Ignoring that isn't just poor management; it's a genuine legal exposure for a business of any size, small ones included.

The other place small employers slip up is inconsistency: being flexible and sympathetic with one employee and rigid with another for the same kind of absence, often without meaning to, but with no record of why the treatment differed. Keep brief notes of return-to-work conversations and any adjustments discussed — not for bureaucracy's sake, but because if a decision is ever questioned, 'we treated this consistently and can show our reasoning' is the strongest position to be in.

The genuinely hard part: persistent short-term absence

The trickiest scenario for most small employers isn't one long illness — it's a pattern of short, separate absences that individually all seem legitimate but collectively make someone unreliable to schedule around. This is where a documented process matters most, because acting on a 'feeling' that someone's absence is excessive, without a clear record of the pattern and a fair conversation about it, is where informal pressure can tip into something that looks like unfair treatment. The fair route is transparent: flag the pattern, have an honest conversation about what's going on and whether support would help, set out clearly what improvement looks like, and only escalate formally if the pattern continues without explanation. It's slower than an off-the-cuff decision. It's also far less likely to blow up into a dispute later, and pairs well with a clear written contract that sets expectations from day one.

What to actually put in place this week

You don't need an HR department to get this right. A one-page sickness policy covering how to report absence, what evidence is needed and when, and how return-to-work chats happen; a habit of having that brief chat every time, without exception, so it never looks like it's only happening to one person; and a plan for who covers the work when someone's off, so a single absence doesn't become a crisis that colours how you treat the next one. None of it removes the disruption of a small team losing a pair of hands. It does mean you're handling it fairly, consistently, and in a way that protects both the business and the relationship with the person coming back.

Common questions

How much Statutory Sick Pay do I owe, and from which day?

From 6 April 2026, SSP is payable from the first day of sickness — the three waiting days were abolished by the Employment Rights Act 2025. The rate for 2026/27 is £123.25 a week, or 80% of the employee's average weekly earnings if that comes to less. The lower earnings limit test has gone as well, so part-timers earning under £129 a week now qualify where they previously got nothing, receiving 80% of their earnings rather than the flat rate. SSP runs for a maximum of 28 weeks. Employees can self-certify for the first seven calendar days, including weekends, and need a fit note from a healthcare professional after that.

Can I claim Statutory Sick Pay back from HMRC?

No. The Percentage Threshold Scheme that let employers recover some SSP was abolished in April 2014 and has not returned. SSP is an employer cost in full, which is exactly why the April 2026 removal of waiting days matters so much to small businesses: absences of one to three days that used to cost nothing in sick pay now cost £24.65 a day for someone on a five-day week. There is no rebate, no offset against your PAYE bill and no small-employer exemption. Treat it as an ordinary staff cost when you set headcount and price work, because on a five-person team you feel every day of it.

Can I dismiss someone for being off sick too much?

Sometimes, but only after a fair process, and it carries enough legal risk to be worth advice before you start. Persistent short-term absence and long-term ill health are both potentially fair grounds under the capability heading, provided you have investigated properly, consulted the employee, obtained medical evidence where relevant, considered reasonable adjustments and looked at alternatives. Move too fast and you face an unfair dismissal claim once the employee has two years' service. If the underlying condition is a disability under the Equality Act 2010, a discrimination claim needs no minimum service and carries no cap on compensation. Document every conversation and every adjustment you considered.

Do I have to pay company sick pay as well as SSP?

Only if you have promised to — in the contract, the handbook, or through consistent past practice. There is no legal duty to pay more than SSP. The trap is that third route: paying full pay to two people who were off sick, with no written policy, can create an implied contractual term by custom and practice that you cannot then easily withdraw from the next person. If you want to keep discretion, write it down explicitly — that company sick pay is discretionary, decided case by case, and that paying it once creates no entitlement. If you would rather keep things simple, pay SSP only and say so plainly from the start.

What counts as a reasonable adjustment for someone returning from long-term sickness?

A phased return on reduced hours building back to full time, altered start and finish times to avoid rush hour or fit medical appointments, temporarily reallocating the physically demanding parts of the job, equipment such as a different chair or a lifting aid, and more frequent breaks. The duty bites where the condition meets the Equality Act 2010 definition of disability — a physical or mental impairment with a substantial, long-term adverse effect on normal day-to-day activities. Reasonableness takes your size and resources into account, so a five-person business is not held to what a supermarket chain could manage. What is never reasonable is failing to consider adjustments at all.