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Statutory Sick Pay



Sickness - introduction

Sickness comprises all forms of mental and physical disability that prevent an employee from doing his normal work.


All employers, regardless of the size of their workforce, have a legal duty to operate the statutory sick pay (SSP) scheme or to provide occupational sick pay (OSP) that is at least equal to the SSP that the employee would receive from the statutory scheme.


SSP is the minimum level of payment which must be paid to an employee who meets the qualifying conditions while he is incapacitated and unable to perform work. SSP is a statutory payment while OSP is a contractual payment.



Overview

  • Employees are eligible if their earnings are at least equal to the lower earnings limit for National Insurance purposes (£120 per week for 2021–22);

  • SSP is only payable if a period of incapacity for work (PIW) has been formed;

  • a PIW is formed when the employee has been sick for four consecutive days (including non-working days);

  • SSP is only payable for qualifying days (QD) (i.e. days on which the employee normally works);

  • three qualifying days (known as waiting days) must be served before SSP is payable;

  • SSP is payable from the fourth qualifying day of sickness;

  • SSP is payable for up to 28 weeks in a PIW;

  • SSP is paid for whole days (not part of a day);

  • SSP is a set weekly figure, payable at a daily rate;

  • SSP is subject to PAYE and Class 1 NIC as normal pay; and

  • the employer is unable to reclaim SSP from the State.


Coronavirus relaxations

Employees who are absent from work due to a coronavirus absence are entitled to SSP from the first qualifying date of their absence (as long as the qualifying conditions are met). They do not need to serve waiting days.



Opting out of the SSP scheme

An employer can opt out of SSP scheme if they:

  • Pays wages or

  • Pays OSP or

  • Combination of above

AND

  • the rate of the payment is equal to or more than SSP.


Part-time workers and Agency workers

There is an obligation on employers not to treat a part-timer less favourably than a comparable full-timer. The benefits that a full-timer receives must also apply to part-timers pro rata.


SSP is payable to agency employees in the same way as it is payable to other employees.


Notification of sickness

The employer can make their own rules regarding the notification of sickness by an employee. The notification rules may vary from employee to employee, but are normally uniform across the workforce at a particular location.

For the avoidance of doubt, any such criteria should be detailed in an OSP document or issued as an addendum to the employee's contract of employment. Each employee must be informed of the procedure for notifying sickness absence. The following information should be included:

  • entitlement to SSP;

  • entitlement to OSP (if provided);

  • the notification procedure;

  • what evidence is required;

  • what time limits apply to notification and submission of evidence; and

  • what ends payment of SSP or OSP.



Determine eligibility of the employee

By law, employers must pay Statutory Sick Pay (SSP) to employees and workers when they meet eligibility conditions.


In order to qualify for SSP the employee must have:

  • performed work under the contract of service, even if only for a few minutes;

  • average weekly earnings in the ‘relevant period’ of at least the Class 1 NIC lower earnings limit (£120 per week for 2021–22);

  • been incapable of working for their employer for a period of four or more consecutive calendar days; this includes non-working days. This absence is known as a ‘period of incapacity for work’ (PIW);

  • satisfied the sickness notification requirements of their employer and provided medical or other acceptable evidence of the inability to undertake work under the employment contract.

All the above conditions must be met.


Excluded Employees

There certain circumstances which makes an employee excluded/ineligible:

  • the employee has recently been in receipt of certain state benefits

  • the contract of employment finishes or is brought to an end;

  • the employee has received the maximum 28 weeks' SSP;

  • the employee was not entitled to SSP in the last period of sickness and this spell of sickness links to that one;

  • an employee's series of linked PIWs have lasted for a period of three years;

  • the employee is in her statutory maternity pay disqualification period;

  • the employee is receiving statutory paternity pay or adoption pay;

  • the employee is absent from work because of a trade dispute at his workplace;

  • the employee is in legal custody when he first becomes ill;

  • there is no liability for the employer to pay Class 1 NIC, e.g. a person is classed as self-employed;

  • the employee is working outside the UK;

  • the employee dies.

There is no age limit for employee to be excluded.


SSP Rate

For 2021–22, the weekly rates of SSP is £96.35 which is paid pro-rata depending on QDs in a PIW.


Where SSP is paid, there is no obligation upon employers to pay any additional company sick pay. However, where there is an amount of contractual sick pay agreed between employer and the employee, SSP will form part of the total sickness payment of the employee's normal wage or salary for the period of sickness. It is unnecessary to pay SSP in addition to a normal wage or salary for a period of sickness.

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