Day One SSP Turning Compliance into Commercial Advantage

The statutory sick pay reforms introduced on 6 April 2026 have materially changed the way recruitment agencies need to manage sickness across their temporary workforce. In this session, Kareena Prescott of C2E Law and Marie Pegram, Managing Partner at Recruitment Accountants, examined the legal, payroll and operational consequences of day one SSP for recruiters.

The financial impact matters, but this is not simply a payroll change. It affects consultant behaviour, client terms, worker documentation, umbrella relationships and the quality of the information moving through a recruitment business.

Handled poorly, SSP becomes another cost and compliance exposure. Handled with clear processes and stronger commercial discipline, it can also encourage better conversations with clients and tighter control across temporary recruitment operations.

Day one SSP changes the economics of short-term absence

The two headline changes are straightforward.

The lower earnings limit has been removed, bringing more lower paid and irregular hours workers within the SSP framework.

The three waiting days have also disappeared. SSP can now become payable from the first qualifying day of sickness.

That second change is particularly important for temporary recruiters.

Previously, many short periods of absence ended before SSP became payable. A temporary worker who missed one or two shifts might therefore create an operational problem without creating the same direct SSP cost.

That position has changed.

A worker becoming sick at the beginning of an assignment can now create an immediate payment obligation, which means recruitment businesses need to understand the financial impact across potentially large temporary workforces.

The calculation needs accurate worker data

Under the new framework discussed in the session, SSP is calculated using the lower of 80 per cent of average weekly earnings or the statutory weekly amount of £123.25.

That amount is then applied according to the worker's qualifying days and the number of qualifying days lost through sickness.

For a regular worker, that may be relatively simple.

For an agency worker with changing shifts, irregular hours or very limited earnings history, the calculation can become more difficult.

A new starter provides a good example.

If somebody is scheduled for five eight-hour shifts, works one hour on the first day and then goes home sick, the agency may have almost no historic earnings data. In those circumstances, the scheduled assignment, agreed rate and expected working pattern become important evidence for establishing the appropriate calculation.

The wider lesson is that payroll cannot calculate SSP correctly without reliable assignment information.

Payroll needs better information from the recruitment desk

The reform exposes weaknesses in communication between frontline recruitment teams and payroll.

When somebody reports sick, payroll may need to know when the absence started, how many qualifying days the person was due to work, their earnings history, the details of their assignment and whether previous sickness periods need to be linked.

If the worker simply sends a WhatsApp message to a consultant and the information never makes its way through the business properly, errors become more likely.

That means day one SSP should trigger a review of the complete absence journey.

Who receives the first notification? Where is it recorded? Who updates payroll? Who checks whether the worker has had previous linked absence? Who decides whether a reporting failure is serious enough to consider withholding SSP?

Those are operational questions as much as payroll questions.

The agency still owns the payment obligation

Where the recruitment agency is the employer, it cannot simply direct the worker to the end client for SSP.

The agency remains responsible for making the statutory payment.

That makes cost recovery from clients an important commercial issue.

Some clients may agree to meet SSP costs, but the session highlighted considerable resistance in the market. Where clients do agree, they may impose strict conditions around reporting and evidence before accepting the recharge.

For recruitment leaders, this creates a useful distinction.

The statutory responsibility towards the worker and the commercial arrangement with the client are two separate matters.

The worker must be dealt with correctly regardless of whether the client later reimburses the agency.

Client terms now deserve another review

Recruitment businesses should revisit their commercial terms rather than assuming existing agreements adequately deal with the new cost.

Where appropriate, terms can address whether SSP can be recharged and what processes need to be followed before a recharge is accepted.

The practical value of that conversation goes beyond recovering individual sick pay payments.

It forces the agency and client to agree how absence is reported, who communicates assignment changes and how decisions are documented.

That can create a more disciplined working relationship across the entire temporary supply arrangement.

Agencies should also consider what protection is available where a client asks them to end an assignment because a worker is sick.

If the underlying absence involves a disability or pregnancy-related issue, what initially appears to be an SSP discussion can develop into a wider employment law problem.

Ending the assignment does not necessarily end the problem

A client may assume that if a worker goes sick, terminating the assignment removes the issue.

For the recruitment agency, it may not be that simple.

The end of an individual assignment is not automatically the same as the end of the wider relationship between the agency and the worker.

If a worker starts an assignment, becomes sick and the client immediately asks for them to be removed, the agency needs to understand exactly why the decision has been made.

That reason should be recorded.

The agency may still have an SSP obligation, and the circumstances surrounding the termination could introduce additional risk if the sickness is connected to a protected condition.

A clear written explanation from the client is therefore far more valuable than an informal telephone conversation that nobody can evidence later.

Employment status cannot be rewritten to avoid SSP

The additional cost may create pressure to find alternative engagement models.

That needs to be approached carefully.

Temporary status does not automatically mean a worker falls outside SSP, and describing somebody as self-employed does not make them self-employed if the practical working relationship says otherwise.

The actual working arrangements matter.

Recruitment businesses should therefore be cautious about structures presented primarily as a way to remove SSP liability.

Any employment model should reflect the reality of how the worker performs the assignment rather than being built around avoiding a statutory payment.

The same principle applies to the wider supply chain.

Umbrella arrangements still require agency oversight

Where an umbrella company employs the worker, the umbrella may take responsibility for SSP.

That does not mean the recruitment agency should stop asking questions.

The umbrella may attempt to pass the cost back commercially. More importantly, the recruitment business should be satisfied that statutory payments are actually reaching workers correctly.

Supply chain due diligence therefore becomes part of SSP compliance.

Agencies should review their umbrella terms, understand how SSP is treated and confirm that providers are operating in line with the arrangements they have agreed.

The increasing enforcement focus discussed during the webinar makes that oversight more important.

Accepted assignments can create obligations before day one

One of the more easily overlooked risks appears before a worker physically arrives on site.

There is an important distinction between somebody merely being registered with an agency and somebody who has been offered and has accepted a specific assignment.

If no assignment has been agreed, a sickness absence does not automatically create the same position.

Once an assignment has been accepted, however, becoming sick before the first shift may still trigger SSP obligations in the circumstances discussed during the session.

For temporary recruiters, this makes accurate assignment records essential.

The business should be able to evidence when an assignment was offered, when it was accepted and what working pattern had been agreed.

Stronger absence reporting creates control

Day one SSP does not mean agencies have to accept informal or inconsistent absence reporting.

A clear sickness procedure can give the business considerably more control.

Workers can be required, where reasonably practicable, to report sickness within a defined period before their assignment begins.

The agency can establish dedicated channels such as an absence telephone number, email address or WhatsApp number rather than allowing notifications to disappear into individual consultant conversations.

The exact channel matters less than consistency.

Workers need to understand how sickness must be reported, consultants need to know where to redirect them and payroll needs to receive the information in a usable form.

Where a worker fails to follow the required process, any decision involving their statutory entitlement should be reviewed through an appropriate escalation process rather than made informally on the desk.

Frontline consistency is now a compliance control

A written policy has limited value if individual consultants routinely ignore it.

If one consultant accepts a text message, another requires an email and a third simply tells payroll that the worker was absent, the agency loses consistency and makes its own position harder to defend.

Repeated informal exceptions can also undermine the written procedure.

Training therefore needs to reach the people closest to the worker.

Consultants and branch managers should understand the day one SSP framework, the agency's reporting routes, when a case needs to be escalated and why assignment termination decisions need evidence.

This is one of the clearest areas where compliance can improve day-to-day operational management rather than simply adding administration.

Sickness can quickly become a discrimination issue

Recruitment teams also need to look beyond the immediate question of whether SSP is payable.

The reason for the absence matters.

Repeated sickness may indicate an underlying disability. Pregnancy-related absence requires particular care. A client asking for a worker to be removed because of a health issue can introduce additional legal questions.

Recruiters do not need to turn consultants into employment lawyers.

They do need a clear escalation route for cases that carry wider risk.

That means identifying the situations where a branch manager, HR adviser or legal specialist needs to become involved before action is taken.

Better records protect the business

The direction of travel is towards greater scrutiny of employment rights and agency compliance.

The session highlighted the future enforcement role of the Fair Work Agency and the potential importance of historical records.

For recruitment leaders, that strengthens the case for treating SSP documentation as part of a wider compliance audit trail.

The business should be able to show how an absence was reported, how entitlement was calculated, what the client said, why an assignment ended and how any decision to withhold payment was reached.

That level of discipline can also make the agency easier for clients to work with.

Where a client has agreed to reimburse SSP only when certain processes are followed, accurate records become directly connected to margin protection.

Turn the reform into a process review

Day one SSP increases cost, but the most useful response is not simply to add another payroll line.

It is to use the reform as a reason to examine how the temporary recruitment operation works.

Worker contracts and sickness policies need to reflect the current framework. Client terms and umbrella arrangements need reviewing. Payroll needs better data. Consultants need clearer procedures. Higher risk sickness cases need an escalation route.

The agencies that manage those areas consistently will be better placed to control cost, evidence compliance and have more informed conversations with clients about where responsibility sits.

That is where compliance moves beyond avoiding mistakes.

It becomes part of running a stronger temporary recruitment business.

Speaker: Kareena Prescott - Lawyer, C2E Law
Speaker: Marie Pegram - Managing Partner, Recruitment Accountants

For more information about C2E Law, visit their Partner page here.

For more information about Recruitment Accountants, visit their Partner page here.