Sickness Absence and Sick Pay

This may come as a shock to most employers (and especially employees) but legally employers have no contractual obligation to provide sick pay to employees for time when they are absent from work due to sickness.

However, the Government does operate a sick pay scheme, Statutory Sick Pay (SSP). Employees have a statutory entitlement to claim and to be paid SSP from their employer if they qualify. The SSP scheme is administered by HM Revenue and Customs (HMRC).

The Statutory Sick Pay scheme enables employees who qualify to make a claim and be paid by their employer. The main details of the SSP scheme and eligibility are:

a) be absent through sickness for 4 or more calendar days
b) have average weekly earnings (in the 8 week period prior to sickness)
equal to or above the lower earnings limit, currently £102.00 (£107.00 as of 6th April 2012)
c) be employed by you and have done work under their contract
d) have not already received more than the max. 28 weeks of SSP
e) have notified you within 7 days of their absence

If the employee meets all the above they will most likely be eligible for SSP. SSP currently is a flat rate of £81.60 per week (£85.85 as of 6th April 2012). SSP is only payable for a maximum period of 28 weeks.

The employer may be able to recover some of the SSP back from HMRC subject to meeting certain requirements of the Percentage Threshold Rule (i.e. where the SSP paid out is more than 13% of all NI collected in).

In practice many employers operate or provide contractual sickness benefits over and above SSP. The employer can still claim the SSP to recoup some of the costs of providing enhanced benefits to their employees.

It is in employers interests that they keep accurate records and monitor trends. Abnormal or persistent absence through sickness may be an indication of other serious underlying factors that may need investigating (possibly such as stress, harassment or bullying).

Further information can be found in the following Advice Note or by following links to other useful sites.

Sick Pay and Sickness Advice Note (Word)
Sick Pay and Sickness Advice Note (PDF)