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Sick Pay Advice For Small Businesses & Employers

According to a recent report on the NHS, “burnt out” staff have taken “eight million mental health sick days in five years”, driven largely by considerable workplace pressure due to COVID-19 and ever-increasing clinical backlogs. While external factors such as the recent pandemic are unavoidable, UK employers can do much more to effectively manage sickness absence. Here we provide some best practice sick pay advice and SSP advice for employers in the UK.

25 April 2022
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What is statutory sick pay (SSP)?

The right to SSP is included in: 

  • The Social Security Contributions and Benefits Act 1992 as amended (SSCBA 1992).
  • The Statutory Sick Pay (General) Regulations 1982 (SI 1982/894) as amended (SSP Regulations 1982).

Employers are required by law to pay statutory sick pay (SSP) to employees who are absent from work due to sickness (incapacity) if three conditions are met. To qualify for SSP, employees must:

  • Have been off sick for at least 4 consecutive days in a row (this included non-working days) – this is referred to as a Period of Incapacity for Work (PIW)
  • Earn an average of £123 or more per week (before tax)
  • Have provided notification to their employer and submit evidence of incapacity.

Employees who are eligible for SSP are entitled to receive payments for up to 28 weeks in any period of incapacity for work (or linked periods of incapacity). Where an employer only pays SSP, it is payable from the fourth day of sickness absence. At present, SSP is £99.35 per week, a figure which is widely considered to be too low and is not paid to the very lowest-paid workers.

Implementing a “financial well-being strategy”

In December 2021, CIPD published a paper entitled “What should an effective sick pay system look like?” Common among the policy recommendations made by the CIPD was that employees need greater financial protection in the event of sickness. They recommended a review of income protection insurance to reduce barriers to entry for smaller employers. They also recommended that employers should consider putting in place an effective occupational sick pay scheme where they do not already have one in place. CIPD reasons that occupational sick pay schemes offer valuable income protection beyond the statutory minimum for employees who are unable to work while sick. 
The CIPD also recommend that employee health and well-being programmes should include financial well-being. This may include putting in place suitable policies on:
The CIPD also recommend that employee health and well-being programmes should include financial well-being. This may include putting in place suitable policies on:

  • Paying a living wage. 
  • Providing benefits that treat the causes and symptoms of financial distress.
  • Financial communication and education.
  • Training and guiding line managers to ensure they have the knowledge and skills to effectively manage sickness absence and the return-to-work process.

Adopting this more holistic view of well-being makes strong sense, given that our financial position can positively and negatively impact our physical and mental health. This, in turn, may allow staff to return to work sooner.

Balancing sick pay with absence

As the CIPD makes clear in their paper, it is imperative that employers never make assumptions about an employee’s reasons for taking a sickness absence. At the same time, they advise that a balance is needed between providing adequate financial support in the event of sickness absence and “not unintentionally embedding a disincentive to return to work when they are well enough”. Indeed, an independent review of sickness absence suggests that generous sick pay schemes can, in some cases, cause higher sickness absences. 

Prolonged and repeated sickness absence can be avoided by implementing a number of effective mitigating measures, including:

  • Designing a sick pay scheme with careful consideration for qualifying criteria, rules on the duration of payments, return to work procedures, and the rehabilitation of individuals.
  • Encouraging a supportive return to work – staff who take frequent or prolonged sickness absences may be apprehensive about returning to work. Line managers should be trained to communicate empathetically with absent staff, so they are positively encouraged and feel confident about returning to work.
  • Putting in place a clear process for long-term sickness absence – including effective case management involving the staff member’s line manager, occupational health specialist, and HR team. 

It is also important that line managers are trained in a way that allows them to have proactive conversations in a caring and empathetic manner with staff regarding their physical and mental health. Such conversations avoid problems building up, which would otherwise result in prolonged or repeated absences. This may include ensuring staff are not overworked, have the support they need, and allowing them to take time off due to personal circumstances. 

Final words

By putting in place effective processes and systems to deal with sick leave, it is possible to maintain the health and well-being of your workforce while facilitating required levels of sickness absence and pay when it is needed. Other measures such as insurance policies, line manager training, and overall well-being programmes can reduce the cost of effective and competitive sick pay schemes. This is especially important when it comes to sick pay for small businesses.

Guillaumes LLP Solicitors is a full-service law firm based in Weybridge, Surrey. We have a highly experienced team of Solicitors who can assist you with any legal matter, including providing statutory sick pay advice or ssp advice for employers and small business owners. To make an appointment, please call us on 01932 840 111.