At some point, all UK businesses that employ staff will be affected by employee sickness. In today’s fast-paced and demanding business environment, the goalposts by which workplace sickness used to be measured and categorised have slowly shifted, and employers of all sizes are slowly recognising that mental health issues and stress are now more prevalent across UK businesses than ever before.
In fact, mental ill health is now the primary cause of long-term sickness absence for over one in five (22%) UK organisations. A recent Mind survey of over 44,000 employees also found that only two in five (42%) felt their manager would be able to spot the signs they were struggling with poor mental health.
Stress, pressure and spiralling workloads now mean that sickness is an unavoidable issue for businesses – indeed, an average of 137 million sick days were taken by UK workers because of injury or illness in 2016, equating to an average of 4.3 days per person. Whilst it often cannot be helped, employers should also be aware that employee sickness can become a significant burden to employers, equating to around £522 per person based on figures for 2015, rising to as much as £835 in the public sector.
Getting to grips with understanding the rules and regulations surrounding sick pay can only be advantageous for employers of any shape or size.
What exactly is sick pay?
Essentially, sick pay refers to the wages paid to a worker or employee whilst they are away from their place of work due to sickness. Sick pay can normally be categorised as either Statutory Sick Pay (SSP), or contractual sick pay.
What is statutory sick pay?
Statutory sick pay, also known as SSP, is the level of pay that employers are legally obliged to pay to qualifying employers. As of April 2019, statutory sick pay stands at the rate of £94.25 per week, which should be paid continually for up to 28 weeks. Employers do not need to pay SSP for the first three consecutive days of any sick leave period, but most choose to pay employees in full for those first few days as a minimum contractual sick pay ‘top up.’
An employer holds total responsibility for paying SSP to their employees, but can opt out of the SSP scheme and choose to offer a contractual sick pay scheme instead. They must ensure that any occupational scheme makes payments that are at least equal to those that would be paid via SSP.
Who is entitled to it?
To qualify for SSP, employees or workers within a business must:
People will still be entitled to statutory sick pay if they are an agency or casual worker with a business, if they work part-time, or are working whilst employed on a fixed-term contract. Part-time workers will receive the same rate of SSP as full-time workers, so long as they reach the lower earnings limit of £118 per week as per their normal rate of pay.
For those on zero hours contracts, the statutory right to sick pay also depends on an employee earning at least £118 per week with one employer. With many misunderstanding their statutory and contractual rights on zero hours contracts, the only real barrier with sick pay is that many way struggle to meet the earnings threshold, particularly if they regularly make up hours across a number of different jobs.
Who isn’t entitled to it?
The majority of those employed by, or working for, a business will be entitled to statutory sick pay, but those who are not entitled to SSP include:
When should statutory sick payments cease being paid?
Typically, as an employer you would cease to pay SSP on an unwell employee’s return to work. However, if their illness transitions to constitute long-term sick leave, SSP ceases after 28 weeks of absence.
Statutory sick payments also stop if an employee has had liked periods of sickness, separated by less than 8 weeks, which have lasted for longer than three years. At this stage, you should inform the employee in question that they will need to look to claim Employment Support Allowance going forward, and send them an SSP1 form to fill in.
SSP can also cease to be paid if an employee starts to receive statutory maternity pay or maternity allowance.
What is contractual sick pay?
Contractual sick pay, also known as company sick and occupational sick pay, constitutes a scheme that employers instigate in order to pay their own rate of sick pay to employees. This will go above and beyond SSP entitlement.
Many employers choose not to pay out extra funds to unwell staff, but equally, many consider contractual sick pay to be a great investment that can become a valuable and attractive part of their company benefits package.
It is up to individual companies how much they choose to pay their employees under a contractual sick pay scheme, but it must be more than basic SSP entitlement. As a minimum, most companies would choose to pay their employees fully for the first three consecutive days of sick leave before SSP kicks in on the fourth day. Others top up basic SSP to a more ‘livable’ level, and some choose to pay full salaries for a set period of time, e.g. three or six months.
Some firms choose to open up contractual sick pay entitlement to all staff from the very first day of their employment, whilst others reserve it as an extra perk for those who have reached a set service milestone with the company. Whatever you decide to do, it is important to decide exactly what level of sick pay you can realistically afford prior to introducing any scheme within your business.
What should a sick pay policy contain?
Regardless of whether you choose to just pay SSP, or introduce a more generous occupational sick pay scheme, you must ensure that you keep adequate records on all matters relating to employee sickness within your workplace. This includes having a clear and concise sick pay policy, that outlines guidance on matters such as:
Can employees take holiday during their sick leave?
You should be aware that employees continue to accrue annual leave entitlement whilst they are absent from work due to sickness. They can also choose to take annual leave during a period of sick leave. As an employer, however, you cannot force an employee to take sick leave as annual leave.
For example, if your employee takes two weeks of annual leave during a four week period of sick leave – giving a total absence of six weeks – their sick leave will still be considered to be one continuous four week period. The employee in question will still be entitled to SSP for the final two weeks of that period.
Is contact allowed during sick leave?
It is acceptable to keep in regular contact with an employee during sick leave, especially if it is due to a long-term or serious condition or illness, but you must ensure that you reach an agreement with the employee in question first. This should outline how often and in what way contact can be made.
Contact during sick leave should primarily aim to: