Policymakers have launched a consultation into extending statutory sickness pay (SSP) to people who earn less than £118 a week, the equivalent of 14 hours on the minimum wage.
Some 2m workers are not currently eligible for this pay.
The Department for Work and Pensions and Department of Health and Social Care said small businesses could receive a sick pay rebate.
Challenges returning to work
It is hoped the proposals would help businesses encourage staff to return from time off for health reasons and boost the number of employees able to return.
Figures from the departments showed that around 100,000 people every year leave the workforce after a sickness absence, with 44% of people who had been off sick for a year then leaving employment altogether.
Health Secretary Matt Hancock said changing the culture around sickness absence would benefit businesses, with the majority of small businesses reporting a lack of time and capital to invest in support as barriers.
Hancock said: “Too many still face challenges returning to work after sick leave. We need to remove the barriers that stop people with disabilities or health conditions from reaching their full potential – these steps will help us achieve that.
“Businesses will also benefit from being able to retain talent, and build workplaces that support the physical and mental health needs of their employees.”
Striking a balance
UKHospitality chief executive Kate Nicholls said it was unclear at this stage how much this might impact on hospitality businesses but unnecessary costs for the sector were not ideal.
She continued: “This would appear to be a measure aimed at protecting individuals not technically classed as employees, which is unlikely to apply for the vast majority of pub and bar jobs.
“We need to strike a balance between supporting employees and avoiding needless costs for businesses, so we will be scrutinising the details of the consultation once it is published.”
British Beer & Pub Association chief executive Brigid Simmonds agreed that a balance was essential, and said the industry was welcoming to those wishing to return to work.
She said: “In the pub sector, over half of our employees work part time and encouraging those who are sick to return to work has to be part of our ethos and responsibility.
“We need to ensure that the changes proposed to SSP do not disadvantage very small businesses like pubs, so we would welcome proposals around a rebate for employers.
“It is likely that many of our pubs go out of their way to help those who want to work from their local community and any support offered to help them to continue would be very welcome.”