Common questions (and answers) about sickness and Statutory Sick Pay (SSP)

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Contents

When does Statutory Sick Pay have to be paid?

Is Statutory Sick Pay necessary if we have our own sick pay scheme?

How much does Statutory Sick Pay cost me (or pay out)?

In which cases will I have to pay more than SSP?

Can sick pay be recovered?

When do you have to begin paying Statutory Sick Pay?

Is SSP paid gross or are tax and National Insurance Contributions (NICs) deducted?

For what duration do I have to pay out Statutory Sick Pay?

Do part-time employees qualify for SSP, if so, how much are they paid out?

What evidence must employees provide of grave illness?

What course of action should we take in the case of suspect or recurring claims of illness?

Can we cease SSP payouts if we suspect that an employee is taking advantage?

In the case of employees who seem unlikely to return to the workplace, is contractual termination possible?

If a new employee has a neurological condition that they did not disclose, can they be terminated?

At a job interview, can you ask about a potential employee’s illnesses lasting over three days for the past five years?

Will I open myself up to discrimination suits if I refuse to employ someone who is frequently sick?

What do I include in my employment terms regarding sick pay?

Am I responsible for continued payment of employees after the end of SSP?

Are there penalties for failing to provide SSP?

What about team bonuses in the case of a team member being sick for an extended time?

When does Statutory Sick Pay have to be paid?

All employees have the right to be paid Statutory Sick Pay. This includes full time and part time employees, short-term contract workers from an agency, temporary workers, and casual staff. 

There are some specified exceptions where SSP does not have to be paid:

  • if the employee’s Period of Incapacity to Work (PIW) benefit is associated with and directly linked to other Social Security benefits such as incapacity benefit.
  • if the employee has already received or is owed 28 weeks SSP encompassing a three year period, all derived from the same employer.
  • if the employee’s average weekly earnings during a period of time (calculated over the last eight weeks up to the most recent payday) falls below the National Insurance lower earnings limit (currently £116 per week).
  • if there is a disqualifying period because the employee is pregnant (for obvious reasons, this does not apply to expectant fathers).
  • if the employee is not working or away from work due to a labour union disagreement with management.
  • if the employee is in the custody of the police or other government authorities.
  • if the employee is working outside of the UK and the employer is not liable to pay Class 1 National Insurance contributions.
  • if the employee is new and has yet to begin working

Is Statutory Sick Pay necessary if we have our own sick pay scheme?

An employer who has their own sick pay scheme does not have to pay SSP if the benefits paid by the scheme match or exceed those of the statutory scheme. In this case, SSP is deemed to be included in those payments. Please continue reading to find out why you may want to consider exceeding the SSP scheme.

How much does Statutory Sick Pay cost me (or pay out if you are the employee)?

SSP is currently £92.05 per week. However, an employer can decide to pay more if desired.

The reason to pay a greater amount is usually that a higher level aims to keep workforce morale high, important because employee turnover can be expensive. You will have to adequately analyse your business and determine whether paying greater amount suits the business’ objectives.

In which cases will I have to pay more than SSP?

First off, it should be noted that employers are under no legal obligation to pay more than the SSP amount. Many employers have their own sick pay schemes that either replace or top up SSP. Employers who may want to retain a valued employee and decrease turnover rates may provide more generous payments, which do come at a greater expense.

If you have a business that functions relatively efficiently with a high employee turnover rate, paying more than SSP may not make much financial sense.

However, if your business relies on retaining valued employees (generally, those with a higher proportion of highly skilled workers), paying more may than the required SSP amount may be a viable consideration.

Can sick pay be recovered?

In order to assist employers and employees, the Fit For Work (FFW) scheme provides advice on health and work. 

Usually, upon referral by the employee's GP, FFW offers health assessments by a health professional once an employee is out of work for four weeks. These assessments record and monitor the employee's periods and causes of illness.

The purpose of an individual assessment is to design a plan of action that allows the employee to return to work safely, as soon as possible. A plan lays out a framework that both parties can work with. A tax exemption (currently £500) applies for treatment recommended by the Health and Work Service or by an occupational healthcare service provided by the employer.  

When do you have to begin paying Statutory Sick Pay?

You must start making SSP payments when an employee has been incapable of working for four consecutive days (including weekends and holidays) due to illness.

It is your responsibility to time these payments at the same time that you would have paid the employee's salary for the period. For example, for employees who are paid on a weekly basis, an employer must pay SSP at the end of the week.

By keeping payments current and up to date, you are covering yourself from a claim and allegation of non-payment. Keep in mind that your employees are relying on these payments to pay their bills, and delaying them can cause undue hardship.

Is SSP paid gross or are tax and National Insurance Contributions (NICs) deducted?

SSP payments should be made to the employee after deducting tax and NIC.

For what duration do I have to pay out Statutory Sick Pay?

As an employer, you may stop paying SSP when your employee can return to work or discontinues providing you with doctor's certificates. In other words, you end SSP payments when your employee, from a health standpoint, is capable of coming back to work.

In addition: you do not have to pay SSP for any days after the following conditions:

  • the term of your employee's contract expires
  • your employee has been due 28 weeks of SSP during a PIW
  • your employee's linked PIW has gone on for a total of three years
  • the disqualifying period related to pregnancy for a female employee has begun
  • your employee is taken into custody by the authorities
  • your employee relocates outside of the UK, making you no longer liable to pay Class NIC
  • the death of your employee

Do part-time employees qualify for SSP, if so, how much are they paid out?

Part-time employees who earn the equivalent or more than the National Minimum Wage (NMW) qualify for SSP at the normal weekly amount. You must pay the full rate for these part-timers. In addition, temps and casual workers will also be entitled to SSP assuming they meet the aforementioned criteria.

What evidence must employees provide of grave illness?

As an employer, you can request specific evidence from your employee that proves their inability to work. This can include:

  • an employee’s self -certification for up to seven days of illness
  • written documentation from a doctor for a time that encompasses the period after the first seven days (typically, during the initial seven days an employee is likely to find it difficult to persuade a doctor to provide the documentation)

GPs can provide a statement advising whether or not an employee is fit to work, depending on his or her condition. If an employee has been out of work for an extended period of time, you may ask for a medical assessment from the General Practitioner or even arrange for an independent medical examination of your employee with his or her consent.

What course of action should we take in the case of suspect or recurring claims of illness?

If your employee is displaying patterns of recurring short absences from work, you may want to interview him or her and request an explanation for the absences. If there is a problem that is not health-related (such as a family issue or a personality clash at work), you may be able to take action to resolve the problem.

Once this pattern is discovered, it is best to have the employee fill out a self-certification form on each occasion and make it clear to them that records of their attendance are being kept. 

The employee should be informed that disciplinary action will be taken if the situation does not improve to management's satisfaction.

Can we stop making SSP payouts if we suspect that an employee is taking advantage?

It is important to note that SSP is a statutory requirement, and you are required to pay it after four or more consecutive days of illness. The condition is that the employee is too ill to carry on with his employment responsibilities.

If you refuse to pay SSP after the four days, the employee has the option of requesting written documentation for the reasons for your determination to deny payment. You are obligated to respond to this written request within seven days.

Failure to respond or if the employee does not agree with your decision, they can request an adjudication and have the right to appeal to the Social Security Commissioners.

When an employee challenges your reasons for non-payment, you are required to provide evidence for your decision.  This evidence must be secured reasonably and proportionally.

In the case of employees who seem unlikely to return to the workplace, is contractual termination possible?

To terminate the services of an employee who is unable to fulfil their employment requirements involves following a fair procedure which is outlined in the ACAS Code of Practice.

This procedure consists of a consultation with the employee, securing current medical documentation relative to the illness and considering whether or not you can provide alternative work.

If it has been determined that your employee is hampered with a disability (specified in the Equality Act of 2010), you must consider making 'reasonable adjustments' to assist in the employee's return to work before dismissal. Disability can include long-term conditions such as those contained within the mental illness spectrum. 

A failure to properly consider 'reasonable adjustments' may result in the dismissal being deemed to be unfair and discriminatory. The termination of employment may be legal if you follow procedures that have been considered to be fair and reasonable.

If a new employee has a neurological condition that they did not disclose, can they be terminated?

It is important to note that under the Equality Act, you as an employer are permitted, but limited to ask health-related questions during the hiring procedure. For example, you are allowed to ask health-related questions to help you decide if the applicant is appropriate in carrying out the work (if health is important for that job position).

If the employee was asked about any health issues during the interview and none were revealed, but soon became apparent after employment commenced, then you may have a case to terminate. This will depend on the condition and the likeliness of it affecting the entailed job.

By not asking any health-related questions and by not requiring a medical examination, you may be placing yourself in a precarious position. The first consideration is whether the disability is stated in the Equality Act. If it is, then you will then have to make 'reasonable adjustments' to permit the employee to do the job, or to provide other work. Dismissal could result in the employee taking you to an employment tribunal.

After the initial two year employment period, the unfair dismissal protection for the employee no longer applies.

At a job interview, can you ask about a potential employee’s illnesses lasting over three days for the past five years?

The Equality Act explicitly prohibits an employer to ask a prospective employee specific questions about their health before offering employment. There are exceptions under certain circumstances.

Will I open myself up to discrimination suits if I refuse to employ someone who is frequently sick?

If the employee's illness is caused by, or associated with a disability specified in the Equality Act and you refuse to employ them, they could claim disability discrimination.

When defending such a claim, the burden is placed on you to prove that there was consideration of 'reasonable adjustments' for the potential employee to complete the work.

However, you must show that these adjustments were too expensive or not practical or would not make an applicable difference in the applicant being able to complete the work.

What do I include in my employment terms regarding sick pay?

The employment contract between employer and employee should state details about SSP (as well as other things), including entitlement and qualifying requirements.

If you are exceeding the required SSP payment, you should make this clear in your employment terms and conditions.

Alternatively to placing the information in the employment contract, it is possible to place it in an employee handbook, and refer to the handbook from the contract of employment.

In addition, you should also tell employees who they should inform within the organisation in the event of sickness and what, if any, illness-related documentation would be required from them. Communicating your expectations from the very beginning can go a long way toward avoiding unpleasant situations in the future.

Am I responsible for continued payment of employees after the end of SSP?

SSP is payable for 28 weeks during a three year period. Once the sick pay is fully paid, you are not obligated to make any further payments, unless the employment contract states otherwise. You continue to be the employer, and the contract continues to exist.

If you decide to terminate employment based on illness and incapacity of performing the job function, disciplinary procedures should adhere to the ACAS Code of Practice.  This includes giving warnings, having employee discussions, securing medical examinations and providing the employee with the opportunity for fair representation.

An employee who been given the full SSP entitlement may be eligible for Employment and Support Allowance from the State. You may inform them of this at your discretion.

Are there penalties for failing to provide SSP?

Not paying Statutory Sick Pay is a criminal offense which is punishable by a fine. If you fail to pay benefits exceeding SSP that are promised under the terms of the employment contract, it could result in a breach of contract claim.

What about team bonuses in the case of a team member being sick for an extended time?

This depends on how bonuses are determined.

If the bonus is based on the performance of the team as a whole unit, then the sick individual should be entitled to their share.

If the bonus is contingent on individual performance, then a downward adjustment may be reasonable, for time missed.

There is one condition to the bonus terms: if the employee has a disability under the terms of the Equality Act, a failure to pay them their share can result in a disability discrimination claim.

Conclusion

When to pay SSP can be difficult to determine. It is your responsibility as an employer to make payments and take appropriate action when an SSP claim is presented. By failing to take action, you may leave yourself open to a discrimination claim.

Please note that the information provided on this page:

  • Does not provide a complete or authoritative statement of the law;
  • Does not constitute legal advice by Net Lawman;
  • Does not create a contractual relationship;
  • Does not form part of any other advice, whether paid or free.
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