New research suggests that improved sick pay benefits might help British businesses save as much as £2bn. The Trades Union Congress (TUC) claims that covering part of workers’ salaries from the first sick day could boost productivity and reduce staff turnover.
Currently, UK employees only receive statutory sick pay after four days off, including weekends. However, proposed reforms would remove this waiting period, aligning the UK with nations like Germany and Sweden. Employers currently pay £118.75 per week for up to 28 weeks, but many low earners receive nothing.
The TUC’s analysis, conducted by WPI Economics, shows improved sick pay benefits could bring £2.4bn in productivity gains. Meanwhile, the direct costs to businesses would only reach £425m. Additionally, early sick pay access might reduce long-term absences and prevent illness spread.
A 2018 US study found that easier sick pay access actually lowered overall absences. Workers with proper support recover faster and avoid infecting colleagues. Moreover, businesses benefit from higher morale and better retention rates.
Despite the potential improved sick pay benefits, some employer groups oppose the changes. The Federation of Small Businesses argues that extra costs could discourage hiring. They fear workers might take more sick days, increasing operational expenses.
The government’s employment bill also includes other worker protections. These include banning “fire-and-rehire” tactics and granting flexible work rights. Deputy Prime Minister Angela Rayner strongly supports these measures.
Paul Nowak, TUC General Secretary, insists that no worker should face financial hardship when ill. He says first-day sick pay ensures employees recover properly before returning. This leads to a healthier, more efficient workforce.
Compared to Sweden, where workers get 80% of their salary when sick, the UK’s system lags behind. The TUC urges further increases in sick pay rates to support workers better.
In conclusion, improved sick pay benefits could transform UK workplaces. While businesses face initial costs, long-term gains in productivity and staff loyalty may far outweigh them. The government’s upcoming decisions will determine whether these changes become reality.
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