Updated July 2019
Is absence a costly problem for your organisation? Confused about your obligations as an employer when it comes to sick pay? Want to know how much you need to pay and for how long?
Find everything you need to know, including the latest information about employer obligations and employee rights in our new 2019 SSP Guide. Whether you’re an employer in the public or private sector, read on to find up-to-date guidance and advice on how to manage sick pay and reduce your outgoings.
What types of sick pay are there? What is SSP?
There are two types of sick pay: Statutory Sick Pay (SSP) and Company Sick Pay (CSP). All organisations must provide employees with SSP but not all employees qualify - see more below.
CSP is a voluntary benefit and must be included in an employment contract. If you have a Company Sick Pay Scheme you can offer your employees more than SSP, but you can’t pay less.
When are you required to pay SSP?
Employers are legally obliged to pay SSP to all employees who:
• have an employment contract
• have completed work under their contract
• earn an average of at least £118 per week
• have been sick for 4 or more days in a row (including non-working days)
• give you the correct notice – within your own time limit
• give you proof of their illness after 7 days
• receive Class 1 National Insurance contributions from you (or would do if not for their age or level of earnings)
There are different rules of entitlement for some people, including agency workers, directors and educational workers. Find out more on the Gov.UK website here.
Employers must pay SSP from the fourth day of absence. Note that if an employee has worked for a minute or more before they go home sick, you cannot count this as a sick day.
How much is SSP?
The weekly rate for Statutory Sick Pay (SSP) is £94.25 for up to 28 weeks. It is paid:
• for the days an employee normally works. These are called ‘qualifying days’
• on the normal payday and in the same way as wages, deducting tax and National Insurance
The Gov.UK website offers a handy SSP calculator to help you work out the actual amount you will pay.
Who doesn’t qualify for SSP?
You can check eligibility using the SSP calculator. You don’t need to pay SSP if your employee:
• Has already received SSP for 28 weeks
• is getting Statutory Maternity Pay or Maternity Allowance - there are special rules for pregnant women and new mothers – read more here
• was in custody or on strike on the first day of sickness
• is working outside the EU and you’re not liable for their National Insurance contributions
• received Employment and Support Allowance within 12 weeks of starting or returning to work for you
How long do I have to pay SSP?
Statutory Sick Pay is paid for a maximum of 28 weeks.
What happens to SSP after 28 weeks?
SSP stops when the employee comes back to work or no longer qualifies. If you think your employee will be off sick beyond 28 weeks, you need to complete Form SSP1 – available here– from the Department for Work and Pensions.
You must send Form SSP1 to your employee on or before the beginning of the 23rd week.
The form must also be completed if you have an employee who does not qualify for SSP. Share it with your employee within 7 days of them going off sick. It can be used to support their claim for social security benefits such as Employment and Support Allowance.
Do you have to pay SSP without a sick note?
Your employee should report sick within the time limit set by your organisation. If you don’t have a time limit, they need to notify you within 7 days.
Employees don’t need to tell you in person or fill in a special form, and you can’t ask for proof until they have been off work for 7 days. If an employee is late calling in sick – by days as opposed to hours - employers can withhold SSP for these days. Careful consideration should be given to this, as there may be a good reason for the delay.
After 7 days off sick (including non-working days) you can ask your employee for proof of their illness. A sick note – officially called a fit note – or a report from either a physiotherapist, podiatrist or occupational therapist (an AHP report) can be accepted as proof.
You cannot withhold SSP if your employee is late in sending you their sick note.
Can I withhold SSP?
You can withhold SSP if your employee does not qualify – see above – or for any days they were late in telling you.
Can I claim back SSP?
No. The Percentage Threshold Scheme (PTS), which allowed employers to reclaim Statutory Sick Pay (SSP) in certain circumstances, was abolished from April 2014.
What about Company Sick Pay or CSP?
Company Sick Pay forms part of an employee’s overall benefits package. You’re not legally obliged to provide CSP and it can be administered as you wish. Any restrictions to CSP would not affect an employee’s statutory right to SSP payments
Can you withhold Company Sick Pay?
If you provide contractual CSP and withhold the benefit from an absent employee where you don’t have the contractual right to do so, the employee may bring a breach of contract claim.
Can employees use their holiday allowance when they’re sick?
With your consent, employees can use annual holiday entitlement to ensure payment for days during sickness, usually in circumstances where:
• Their entitlement to SSP has been exhausted
• They don’t qualify for SSP
• You don’t offer CSP benefit
This approach can cause problems for employers, masking the true scale of absence within an organisation. Allowing employees to use their holiday in this way can make it harder to keep tabs on absence trends and address the causes.
Note that statutory holiday entitlement continues to be accrued while an employee is off work sick. Any unused holiday entitlement can be carried over into the next leave year. If an employee is ill just before or during their holiday, they can take it as sick leave instead.
It’s worth knowing that employers can’t force employees to take annual leave when they’re eligible for sick leave.
What are the main causes of overspending on sick pay?
Overspending on sick pay is a big problem for organisations across the public and private sector. Some common scenarios which lead to overpayment include:
• Long term sickness not being closely monitored, leading to CSP being paid monthly until exhausted
• Lack of insight into absence trends, and the reasons behind these. Absence Management systems which provide real-time data can help significantly.
• Company Sick Payments being automatically made due to a failure to hold Return to Work meetings
• Failure to question or clarify reasons for absence, resulting in payments being made when an absence is not a genuine claim
• Poorly written policies that allow employees to abuse the benefit of CSP without appropriate and reasonable challenge
How can organisations reduce their sick pay spend?
There are straightforward practical steps you can take to reduce your spend:
• Make your absence policy robust – It needs to clearly set out qualifying and eligibility requirements for the right to CSP benefit, and highlight any consequences of failing to comply with the policy and/or fraudulent claims or abuse of the policy
• Ensure a strict RTW meeting process is implemented and maintained throughout your organisation
• Carefully monitor employees on long term sick pay to minimise CSP abuse
• Introduce a good absence management system to manage and reduce staff sickness, increase productivity and support employee wellbeing
Worried about staff sickness levels? Want to take steps to prevent and reduce absence? We’ve analysed the latest UK absence figures to help you benchmark your business.
Download the free 2019 FirstCare Absence Management Index here.