A Guide to SSP, Statutory Sick Pay
As an employer your business will have to contend with a level of staff absence due to sickness. Employers have to pay SSP (Statutory Sick Pay) to their employees as a replacement for their usual salary when they are unable to work because of a medical condition. If your employees meet certain medical and legal requirements they will be able to claim SSP. The HM Revenue & Customers (HMRC) have a complete guide to SSP on their website: www.hmrc.gov.uk. SSP is paid to all qualifying employees regardless of their illness, up to a maximum of 28 days.
What Qualifies for SSP?You have to pay SSP to any qualifying employee if they are working for you with a contract of employment. Generally, freelance workers, consultants, part-time or temporary employees may all have to be paid SSP if they qualify. In order to receive sick pay your employees must:
- Be sick for four consecutive days that includes bank holidays and weekends. This is called the ‘Period of Incapacity for Work’ (PIW).
- Earn at least as much as the Lower Earnings Limit for National Insurance contributions (NIC) This is £111 a week for tax year 2011-2012.
The weekly rate from 6 April 2011 to 5 April 2012 for sick pay is £87.55
When Does an Employer Have to Pay Sick Pay?As the employer there are certain rules that you must follow before you begin to pay sick pay to your staff. You do not have to pay sick pay on the first three full days of sickness unless the period of sickness forms what are called linking periods. These are two periods of sickness of at least four consecutive days that were taken with eight weeks or less between them. In this case the periods of sickness would be counted as one.
Also, as an employer you can ask your sick employee to complete for SC2, which is also known as self-certification. This is an efficient way for employers to track the sickness of their employees that don’t take more than seven days off sick in one qualifying period.
Sick Pay and DoctorsIt is important to remember that as an employer you must have a sickness reporting system in place so that your employees can efficiently inform your business that they are not fit enough to work. As an employer you can ask for proof of an illness in the form of a sick note from your employee’s doctor. These sick notes are useful when lengthy periods of sickness of over a few days or a week are likely. In most cases, self certification is more than efficient to track the sick days of your employees.
Any of your employees that don’t fulfil the criteria to claim SSP when they are off work can then try and claim Incapacity Benefit as this state benefit is designed to provide an income for someone that is usually fit to work, but cannot for a period of time. Your employee can make this claim on form SSP1 that is available to download from the Department for Work and Pensions website.
SSP and PregnancySick pay can be claimed by any of your employees that are also pregnant. If they do make this claim, the Statutory Maternity Pay they are also entitled to can affected. Generally, sick pay is stopped once your employee begins to claim their Statutory Maternity Pay, or Maternity Allowance if she doesn’t qualify to receive Statutory Maternity Pay.
How to Work Out SSPOnce you have decided whether an employee is entitles to sick pay to cover their sick leave, you now have to calculate how much to pay them. Sick pay is worked out on a daily rate, that covers any qualifying days. Don’t forget you don’t have pay sick pay on the first three days your employee is on sick leave. The HMRC have a handy sick pay calculator you can use on their website: www.hmrc.gov.uk. There is also a CD ROM based version of the sick pay calculator which again, you can order from the HMRC website.
Remember that you must have clear and comprehensive details about how your business handles sick pay in the employee handbook, or your employee’s written statement of employment. This is important as in some case of ill heath that go beyond 28 days (the current maximum your business has to pay SSP) and may result in you dismissing your employee. Any employment tribunal that could then take place will look closely at the SSP records your business kept and how your employee’s SSP status was managed. Keeping accurate records is therefore, a sensible move to ensure the system you use to manage employee sick leave is fair and legal.