Plans to overturn sick pay regulations by requiring employers to provide benefits to staff from the first day of their illness are to be scrapped by the government, according to press reports.

The ‘Financial Times’ said work and pensions minister John Hutton will announce that proposals to simplify sick pay rules will be dropped because they would be too expensive to employers.

The changes had formed the backbone of the government’s green paper on welfare reform published in January. They were put forward as a way of reducing the number of people who fall out of the labour market due to illness and then remain on state benefits struggling to find another job.

Employers are currently obliged to pay workers after three days of absence due to sickness.