Sick Pay

It’s inevitable that at some point, your employees will need time off to recover from a short or long-term illness.

You must pay employees sick pay when they take time off work for mental or physical illness. There are different types of sick pay you can offer to employees. The amount of sick pay employees receive can vary between organisations.

This guide will take an employer’s perspective of sick pay. We'll cover what the different kinds of sick pay are, including Statutory Sick Pay (SSP) and contractual sick pay. We’ll also cover when it starts, who pays it and who gets it.

Different types of sick pay

There are two different types of sick pay. There’s:

• Statutory Sick Pay, or (SSP) as it’s also known.
• Company sick pay: (often called contractional sick pay or occupational sick pay).

If employees aren’t entitled to company sick pay, you must pay them Statutory Sick Pay to eligible individuals.

What is company sick pay?

Typical company sick pay schemes offer a more generous rate of pay than. Company sick pay schemes can vary between organisations.

Some schemes may potentially be subject to certain terms and conditions. For example, the company sick pay scheme may start after a minimum period of service.

If you provide a company sick pay scheme to employees, you must outline the terms and conditions of this scheme in the employment contract.

What is Statutory Sick Pay?

Statutory Sick Pay is the minimum rate of pay employees must receive from their employer when they are off work due to sickness. Employers must pay SSP, providing that the employee meets the eligibility conditions.

There are sick pay laws in place in the UK that you must understand as an employer. Failure to follow them may lead to payment disputes by employees and a damaged business reputation.

When does Statutory Sick Pay start?

You must pay employees Statutory Sick Pay from the fourth day they’ are off work ill. The first three days are qualifying days or waiting days.

Providing the employee is eligible, they should receive SSP for all days they are off sick except for the first three qualifying days. You can’t count sick days where an employee has worked part of the day before they go home.

If an employee has received SSP within the last eight weeks, they won’t need to go through that three-day waiting period again next time.

How much is Statutory Sick Pay?

The Statutory Sick Pay rate in the UK is £96.35 per week for up to 28 weeks. Some companies may offer more than this amount, but you aren’t allowed to pay any less.

You must pay this amount to employees in the same way they would normally receive their weekly or monthly wages. National Insurance and Tax are also deducted as normal.

You can use the government sick pay calculator to work out how much Statutory Sick Pay employees should receive. The calculator can help you work out the daily rate employees will receive.

Who gets Statutory Sick Pay?

Most employees will qualify to receive Statutory Sick Pay. But there are a few eligibility criteria that they must meet first. For employees to qualify for sick pay, they must:

• Work as an employee in the organisation.
• Earn at least £120 per week.
• Have already surpassed the three-day waiting period (including non-working days).
• Given you the correct notice.
• Provided proof of their illness (only required at the employer’s request, after the employee has been off for seven days).

There are some exceptions. Employees won’t qualify if they:

• Have surpassed the maximum SSP amount (28 weeks).

• Are currently receiving Statutory Maternity Pay.

Sick pay entitlement for part-time workers is the same, providing they meet the eligibility criteria above. Zero hours contract sick pay is also provided where employees meet the SSP qualifying criteria.

Who pays Statutory Sick Pay?

You might be wondering: do companies have to pay sick pay? Well, the answer is yes. Sick pay isn't a government-funded scheme. You must pay Statutory Sick Pay if:

• You pay Class 1 National Insurance contributions for your employee.
• The employee is sick for more than four days in a row.
• The employee told you they were sick within your set notice period or in seven days.

What happens when sick pay runs out?

If an employee isn’t eligible for SSP, they might be eligible for Universal Credit or Employment and Support Allowance (ESA). To receive this, they must complete an SSP1 form.

When an employee’s sick pay ends, you’ll need to send them the SSP1 form within:

• seven days of their SSP unexpectedly ending.

or

• before their 23rd week off (if their sickness will last longer than the SSP).

When employees don’t qualify for SSP, they must fill out the form within seven days of the sickness. If an employee knows they will be off on long-term sick beyond 28 weeks, they can submit this form earlier before SSP ends.

Get help with sick pay from Health Assured

We hope we’ve answered all your questions about how statutory sick pay works. But if we haven’t, please don’t hesitate to get in touch. Our legal advisors can help you understand the different forms, laws and regulations surrounding sick pay. We can help you to overcome problems and create effective absence management practices.

A proactive approach to employee wellbeing can reduce absenteeism, increase productivity, and boost employee engagement. Health Assured provide an award-wining Employee Assistance Programme that will support your employees to stay happy and healthy. Our 24/7 helpline is here for employees 365 days a year, with counsellors, financial and medical advisors.

Arrange a call back from a workplace wellbeing expert today on 0844 891 0353 for help with sick pay.