Small businesses warned they would face a higher burden from sick pay, while potentially also being hit with other employment costs from Labour’s “New Deal for Working People”.
The overhaul of workers’ rights is expected to include a clamp-down on zero-hour contracts, day one rights for all employees and increases to the national living wage.
This could result in small business owners being forced to cut hours and staff numbers, the FSB said.
Workers earning at least £123 on average a week are currently entitled to receive statutory sick pay after three days of illness.
Employers are then liable to pay ill workers at least £116.75 a week for up to 28 weeks.
However, Labour’s policy documents suggest Ms Rayner is planning to force employers to shell out sick pay after just one day of illness, while also scrapping the lower earnings limit.
An overview of its plans published in June said: “A Labour government would strengthen statutory sick pay, remove the lower earnings limit to make it available to all workers and remove the waiting period.”
However, small businesses fear Ms Rayner could go further and raise the rate of statutory sick pay, as she has pledged to do in the past.
When addressing a Trades Union Congress meeting in Liverpool last year, Ms Rayner said she would “strengthen and increase statutory sick pay”.
Figures from the OECD show the UK has one of the lowest mandatory sick pay levels among comparable nations.
However, Ms Rayner’s bid to strengthen workers’ rights has the potential to put the Deputy Prime Minister on a collision course with Chancellor Rachel Reeves, who is seeking to repair an alleged £22bn black hole in the public finances.
Some insiders believe the Government is likely to make some exemptions on sick pay for small businesses or strengthen rights to cover more workers without increasing rates.
