Day-one sick pay and longer tribunal windows: the 2026 people costs nobody budgeted for

By Jason Sibley

It's easy to budget for wages and miss the rules around them. Two employment changes have taken effect this year, both affecting the cost of employing people. One began on 6 April 2026. The other began on 1 October, two weeks ago.

Neither brings a dramatic bill. Both add small, steady pressures on cover, admin and record-keeping. Here's what changed, how to estimate the cost for your business, and where AI can help with the paperwork.

This is general information, not legal, tax or payroll advice. Acas is the free first stop for employment questions. Your payroll provider or accountant can check the numbers for your business.

Two changes already in force

1. Statutory Sick Pay from the first day

Business.gov.uk says Statutory Sick Pay (SSP) has been payable from the first full day of sickness absence since 6 April 2026. The three-day waiting period has gone. So has the Lower Earnings Limit: every eligible employee qualifies whatever they earn. The change applies across the whole UK.

GOV.UK's employer guide gives the rate as £123.25 a week or 80% of average weekly earnings, whichever is lower. It's paid for up to 28 weeks through payroll, with tax and National Insurance deducted. It's due when someone is sick for at least one full working day. If they worked even a minute before going home, that day doesn't count as a sick day.

2. Longer tribunal time limits

Acas says the law changed on 1 October 2026. For problems on or after that date, most claims can be brought within six months minus one day. Previously, it was three months minus one day. SI 2026/954 brings this into force and applies it where the matter complained of happens on or after 1 October 2026.

Problems from before 1 October keep the old limits, so you'll have two sets of dates to track for a while. Acas gives this example: if someone was paid the wrong amount on 1 October 2026, their limit ends at 11:59pm on 31 March 2027.

A few more points:

• Scotland is slightly different for breach of contract claims. Acas says nothing changes there until 9 November 2026.
• A few rarer claims, such as redundancy pay and equal pay, already had six months. Check Acas for how the changes affect those.
• A worker's first step is to notify Acas within the time limit. GOV.UK says they must do this before claiming. The clock is on hold while Acas helps to resolve the dispute.

What it costs you

The cost depends on how often your people are off and how you already pay for sickness absence. You can work out your own exposure in an afternoon.

• Pull your absence records for the last 12 months and count the short absences, a day or two at a time. Under the old rules, the first three days of a spell didn't attract SSP. Now they can.
• Check your contracts. If you already pay more than SSP, the change may cost you little. If you only paid the statutory minimum, short absences now cost more from day one.
• List anyone whose earnings used to fall below the old threshold. They now qualify.
• Include cover for short absences, because that cost sits on top of any pay.
• Ask your payroll provider to model the cost using your records. It's a ten-minute job for them and beats guessing.

The tribunal change brings a less obvious cost. A longer window means a pay error, a missed entitlement or an unresolved grievance can surface later. You'll need a record of what happened. GOV.UK says you choose how to keep sickness records, but HMRC may need to see them in a dispute. Ask Acas or your accountant how long to keep each kind of record. Don't assume your current retention periods are long enough.

Where admin AI helps

AI can help with the repetitive paperwork. One firm rule: don't put staff health details into consumer AI tools. Use templates with blanks and initials, and keep sensitive information in your own records. Our guides on whether ChatGPT is safe for business data and a simple AI policy for small teams cover the basics.

An absence log and return-to-work note

Ask for blank templates, then fill them in yourself.

You are assisting a UK small business owner with HR admin. Create two blank templates in plain British English: (1) a sickness absence log with columns for employee initials, first day of absence, last day of absence, whether it was reported on time, and a notes column; (2) a short return-to-work conversation note with prompts for the date, who attended, what support was discussed and what follow-up was agreed. Leave every detail blank for me to fill in. Do not invent policies, legal requirements or figures. Where something depends on our own policy or on the law, write "[OWNER TO CHECK]".

Spotting out-of-date policy wording

Business.gov.uk says to review sickness absence policies for references to waiting periods or earnings thresholds. AI can find those sentences quickly. A person decides what replaces them.

Below is the sickness absence section of our staff handbook. List every sentence that mentions a waiting period, waiting days, a minimum earnings level or an earnings threshold for sick pay. Quote each sentence exactly and say which part might be out of date. Do not rewrite the policy, do not say what the law requires and do not invent anything. If you are unsure, say so and write "[OWNER TO CHECK]".

[paste the policy text here, with no names or health details]

A people decisions log, written at the time

With a longer window, a short note made on the day is worth far more than a memory six months later. Jot down a few lines, then let AI tidy them.

Turn the notes below into a short, dated record of a people decision, in plain British English. Use these headings: date, decision, who made it, what information we had at the time, and what happens next. Use only what is in my notes. Do not add reasons, quotes or facts I have not given you. Mark any gap as "[OWNER TO FILL IN]".

[my notes, with initials only and no health details]

Keep the finished notes somewhere secure, not in the chat history.

Where it doesn't

AI shouldn't decide:

• what someone is owed, or whether SSP is due in a tricky case
• the outcome of a disciplinary or a dismissal
• whether a time limit has run out, or whether a claim would succeed

Those decisions need a person who knows the facts, and sometimes Acas or a solicitor. AI can sound sure of itself and still be wrong. It won't be in the room if a decision is challenged. The same caution applies to other people decisions, as our guide to fair AI recruitment screening explains. For more on payroll pressure, see labour costs and tax pressure: where AI helps.

A one-hour review this month

• [ ] Read the business.gov.uk and Acas pages linked above so you're working from the primary sources.
• [ ] Pull 12 months of absence records and count the short absences.
• [ ] Check your contracts and handbook for wording about waiting periods or earnings thresholds.
• [ ] Ask your payroll provider to confirm SSP is set up correctly and to model the cost.
• [ ] Tell your managers that sickness pay now starts on the first full day, and make sure they know who to ask.
• [ ] Start a simple people decisions log and agree who writes it up.
• [ ] Ask Acas or your accountant how long to keep each type of record.
• [ ] Put 9 November 2026 in the diary if you employ anyone in Scotland.

A quiet word before you go

At My AI Apprentice we run AI sessions for small businesses, including practical sessions on admin like this, with no jargon and nothing sensitive pasted anywhere it shouldn't go. No pressure either way.