More than a million low-paid workers will be entitled to higher statutory sick pay rates in changes expected to be introduced next year.

Workers earning less than £123 a week will get 80% of their salary from the first day of sickness. Currently, they are not entitled to any statutory sick pay (SSP), while those earning more than £123 receive £116.75 a week (or £118.75 from April).

When it comes into force, the Employment Rights Bill will give employees the right to claim SSP from the first day of being sick, and 1.3 million of the lowest earners will now also be entitled to 80% of weekly wages.

This means they will be up to £100 a week better off than under the current system, according to the Department for Work and Pensions.

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The changes to SSP are being introduced as part of a number of updates to the bill, which will be laid before Parliament this week.

Removing the £123 threshold to qualify for sick pay was one of the reforms put forward in a consultation into SSP in October.

Liz Kendall, secretary of state for work and pensions, said: “For too long, sick workers have had to decide between staying at home and losing a day’s pay or soldiering on at their own risk just to make ends meet.

“No one should ever have to choose between their health and earning a living, which is why we are making this landmark change. The new rate is good for workers and fair on businesses as part of our plan to boost rights and make work pay, while delivering our plan for change.”

Unions welcomed the change but have been campaigning for higher rates of SSP. In December last year, a group of 24 union leaders wrote to the prime minister claiming employees will still be on just £3 an hour if they take time off work.

Paul Nowak, general secretary of the TUC, said: “This shouldn’t be the end of the story. We urge ministers in future to raise the replacement rate for the lowest earners beyond 80% and undertake a wider review of the statutory sick pay rate.”

Small business owners, in contrast, fear that changes to sick pay in the Employment Rights Bill could make them “think twice about their hiring plans”.

According to the Federation of Small Businesses, a third of members expect to reduce staff numbers in light of the bill.

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