9.1 What is Statutory Sick Pay?
We have explored HMRC and what they do, including governing the amount
of income tax and National Insurance a person needs to pay, as well as the
in-depth reporting and recordkeeping systems you need to have in order to meet
all requirements as an employer. However, in addition to this, there are other
types of pay which need to be reported, recorded and understood.
It is important to have a good understanding of these types of pay in
order to ensure you honour your employees' rights, as well as HMRC's
requirements from you as an employer. Even if you are not the person who
actually deals with the payroll system on a day-to-day basis, having knowledge
of statutory pay is imperative as a manager, in order to advise your employees
accurately and effectively. One of those types of pay you need to understand is
called Statutory Sick Pay (SSP).
Statutory Sick Pay
Statutory Sick Pay (or SSP) is the
minimum pay that an employee is entitled to when off sick from work. There are
rules and requirements which govern this type of pay, which will look into
these in a little more detail further in this module. SSP is a payment which
your employee is entitled to by law (provided they qualify) when they are too
sick to work and have been absent from work for more than 4 days in a row,
including non-working days. Payment of SSP is made to the employee in the same
way they would receive their wages, be it weekly or monthly.
This guide to
SSP on the UK government website details the current figures on
how much employees should be paid.
Your employee needs to meet
qualification rules in order to receive this payment and it may be that your
company has a sick pay policy in place too; for instance, some companies may
perhaps offer their employees sick pay as an employment condition; the details
of which are laid out in the contract of employment, which must be signed by
both parties.
An example of a potential arrangement
could be that for the first six months of continued absence, the employee will
be paid their full wage and for the following six months of continued absence,
their pay will drop to half their normal wage.
For other companies, this isn't
always the case and these companies may rely on SSP alone to pay their
employees their sickness entitlement.
Now we know what SSP is and we are
aware that there are some anomalies which may arise in relation to it, let's
look at the finer details in a little more detail.
9.2 When Can an Employee Claim SSP,
and for How Long?
An employee is entitled to SSP
payment after four days of continued sickness.
It is important to have a clear
sickness absence reporting system in place, and for this to be clear to all
employees, so there is no delay in the first day of sickness absence being
communicated to the right person. A high-quality reporting system is important
because the employer needs to know exactly when to start calculating SSP from.
SSP is paid up to 28 weeks of
continued absence, with eligibility beginning on the fourth day of continued
absence - the three days before this are classed as the 'waiting period'.
Sick days also include non-working days.
For example, if a member of staff goes off sick on Friday and they are still
off work on Monday, the weekend days are classed as sickness too, because they
would still have been unfit for work (whether they actually usually work
weekends in the normal run of things or not).
It is also worthwhile noting that if
an employee has more than one job they can claim SSP from more than one
employer; however, this is only something you need to be aware of in terms of
overview - you will only pay them once.
SSP is paid through the normal
channels, i.e. it will be received by the employee on their usual salary payday
and is communicated on a payslip. Income tax and National Insurance are
deducted as normal and calculated through your payroll software. Having a clear
payslip is again important here, so your employee knows exactly why they have
been paid a certain amount, how many deductions have been made from it and at
what rate.
There are important points to remember in terms of when sickness begins
because this influences the point at which SSP is paid.
· SSP begins on the fourth continuous day that the employee is off sick.
The three days before are in the waiting period, and are not in the SSP payment
bracket
· If your employee attended work and then went home sick, this is not a
sick day and only the following day of sickness is classed as the first day of
the waiting period
· SSP stops when the employee returns to work or after they no longer
qualify for SSP
If your employee has taken more than
4 weeks' leave, it may be considered long-term sickness. Employers need to keep
in mind that employees who are sick in the long term are also entitled to
annual leave by UK law.
9.3 Employee Qualification for SSP
and Exceptions
In order for a sick payment to be
made, your employee needs to qualify for it.
An employee qualifies when:
They are classed as an employee and have
conducted work for the company - this point is generally a given. Agency
workers are entitled to SSP, but there are different rules which apply to them,
and further guidance should be sought on this from the HMRC website.
They have been ill for at least four days
continuously and including non-working days. The three days prior to this
fourth day are classed as the waiting period.
They must inform their employer, i.e.
you, that they are sick before the company's deadline, which should be
communicated to them in their employment contract. Generally speaking, there
will usually be a clear policy and system in place whereby an employee is
expected to call in sick on day number one
1. Sickness must also
not be linked. Basically, linked sickness is SSP qualifying sickness which
lasts for 4 or more days each time and when episodes are 8 weeks or less apart.
If an employee has a series of linked sickness episodes lasting for more than 3
years then SSP becomes problematic and they no longer qualify. This is when SSP
should not be paid, however, there will probably be a review which goes into
this and discussions with the employee.
Further information on eligibility for SSP and exceptions can be found
on UK Gov.
These are the few variations which cause problems with SSP. However, it
is worth noting that these instances will probably be rare, and as a business,
you will most often deal with sickness absence due to the usual common
short-lived ailments, such as colds, sickness bugs, etc. In this situation, the
process is easy and is simply reported and calculated on your payroll software,
with the employee reporting their sickness via the policy you have in place in
your company.
In the case of long-term sickness, SSP is paid for up to 28 weeks. What
happens after this point will depend on the individual company. Some companies
may have sickness policies (i.e. occupational schemes) which mean payment
continues after this point or is reduced, but this is something that is put
into place by the employer themselves and is contained in the employee's
contract of employment. Otherwise, SSP is simply paid for up to 28 weeks.
Note that maternity pay is a different situation as is paternity leave,
and further guidance should be sought on these issues.
9.4 Recordkeeping in Relation to SSP
HMRC does not actually require you,
by law, to keep records of SSP paid, because this can be tracked through the
figures reported on payroll software.
However, it is recommended that you
do create a recordkeeping system which records your employee sickness and
absence, because if there is a query on SSP paid, HMRC may ask to see proof of
dates and duration.
How you create your sickness absence
recording system is purely a decision for the business. Some businesses may
choose to keep a spreadsheet of rolling sicknesses and keep fit notes on
personal files, whilst others may opt for a more manual system. It is a
personal decision, however, it is also a decision which needs to comply with
confidentiality and Data Protection. Such sensitive information should only be
available to the necessary personnel, e.g. management or Human Resources
Department.
9.5 How is SSP Reported to HMRC?
We have stressed the importance of
quality payroll software time and time again, and this is another instance.
One of the most important features your software needs to have is the
facility to easily calculate SSP and allow it to be incorporated in the full
payment submission sent to HMRC. As mentioned previously, SSP is included in
the employee's usual wage, i.e. if they are paid on the 25th of the month
usually, then they will receive their statutory sick pay on the 25th of the
month, and are also issued a payslip documenting this, with income tax and
National Insurance deducted as usual. Again, your payroll software will
calculate this for you and a payslip produced.
If you want to work out more in-depth calculations in terms of SSP, e.g.
how much your employee will receive on a daily basis, there are online calculators you can use to give you this
information. There may be instances whereby your employee asks you a question
on SSP, and these calculators will give you the figures in order to answer
their questions properly.
9.6 The Importance of a
Well-Communicated Sickness Reporting System
Hopefully by now, you will have more
of an understanding of what Statutory Sick Pay is, when payment begins and how
it is reported.
To begin with, you need to have a
system in place for employees to report sickness, so you know when to begin
their SSP payments.
A quality reporting system needs to include:
· The employee needs to know exactly what is expected of them in terms of
reporting when they are sick. For instance, it is a good idea to have a
dedicated person to report sickness to, a dedicated telephone number to call
before work, and a time by which sickness should be reported, e.g. if
an employee begins work at 8am, they should telephone by 7.30am. This means
that cover can be arranged, and you know that this is their first day of
sickness in the waiting period before SSP begins.
· For each day of sickness, the employee should telephone their dedicated
line manager to inform them of the situation. Any changes to the situation
should also be communicated, e.g. if they are expecting to go to their GP
because of a worsening situation. Whilst this is all well and good, employers
do need to respect privacy in terms of sensitive matters.
·
Having a sickness policy is recommended because this outlines what is
expected of the employee when they are off sick, with no room for
misunderstandings. For instance, a fit note needs to be obtained if an
employee misses more than 7 days of work. Your employees need to be aware of
this, so you can obtain the necessary paperwork for files.
· A proficient recording system needs to be in place so that details of
sickness absence can easily be accessed for each employee. This system needs to
be confidential and kept secure.
9.7 Dismissing an Employee Who is
Long-Term Sick
An employer can (as a last resort)
dismiss an employee who has taken more than 4 weeks' sick leave.
However, in order to do so, the
employer must follow a reasonable process and allow sufficient time for
recovery for the employee. The employer must consider the possibility of making
reasonable adjustments if the employee wants to return to work, and they must
discuss the employee's health and implications with the individual in question.
'Reasonable adjustments' can include the following:
- -Doing
things differently: for instance, an employee suffering from social
anxiety may be allotted a desk away from others
- -Modifying
the working environment: for example, installing a ramp for wheelchair
access
- -Making
workstation improvements: such as providing a special keyboard for someone
with arthritis
- -Flexible
or part-time work hours, and work-from-home opportunities
If the employee is dismissed then you
need to prepare the usual paperwork for someone leaving the business and inform
also HMRC.
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