Sickness
Under employment law, an employee is not entitled to be paid unless he or she is ready and willing to work.
There is no contractual right to sick pay - i.e. an employer is not bound to put provisions in the employment contract allowing sick pay, for example, which is based on the individual's pay. However, there is a statutory duty to pay a certain minimum to all employees. The statutory payment is the same for all employees regardless of status, length of employment etc.
What level of sick pay do I have to provide?
Statutory sick pay (SSP) is only payable for qualifying days. These are usually the days the employee would normally have worked if they hadn't been off sick.
SSP is paid from the fourth qualifying day and for up to 28 weeks in any period of incapacity for work (PIW). A PIW is a period of sickness that lasts for four or more consecutive days.
If an employee has two periods of incapacity separated by eight weeks or less, these are linked, ie, treated as one PIW.
How is SSP calculated?
SSP is calculated on a weekly basis. There is a standard rate of SSP, currently set at £60.20 per week.
The daily rate is calculated by dividing the appropriate weekly rate by the number of days in the week that the employee normally works. For SSP purposes, the week always begins on Sunday.
Can I claim it back?
New rules on an employer's right to recover sums paid through SSP were introduced from 6 April 1995. An employer can now recover SSP paid during a month if it exceeds 13% of their national insurance payments for that month.
Are all workers eligible?
SSP is payable to employees between the ages of 16 and 65 whose average gross weekly earnings are at or above £72 per week, the minimum earnings limit for payment of national insurance contributions
Are any employees exempt?
The unemployed and the self-employed do not qualify for SSP.
Full employees are also excluded from claiming SSP in a number of circumstances. The most important of these are employees who, on the first day of the PIW:
- are under 16
- are over 65
- are under a contract of service for a specified period of three months or less
- are paid less than the lower earnings limit for national insurance contributions
- have already had 28 weeks' SSP from a previous employer
- were entitled to incapacity benefit or severe disablement allowance, 57 days ago or less
- have not yet done any work for an employer
- are engaged in an industrial dispute
- are receiving maternity pay
- are abroad
- are in custody.
How long am I obliged to pay it for?
The employer only stops paying SSP when the employee:
- returns to work
- stops working for the employer
- has had SSP for 28 weeks in the period of incapacity for work
- has had a PIW with that employer that has lasted for more than three years
- begins her maternity pay period
- is taken into legal custody
- dies.
Can I opt out of the statutory scheme?
SSP is a minimum level of sick pay, which employers are obliged to pay. They may, however, have an occupational sick pay scheme, although this can't be less than the minimum SSP.
Non-compliance of the SSP provisions can amount to a criminal offence.
When can I sack someone for being off sick?
An employee may only be dismissed where the employer has followed their capability procedure in full and taken into consideration the Disability Discrimination Act and any contractual entitlement to long-term disability benefit.
As an employer, you should have in place a procedure to asses whether your employees are still, or are likely to be capable of returning to work, and whether they are capable of performing this job or one similar if they don't recover. Before any dismissal is made this must be carefully considered.
Is sick pay subject to PAYE and national insurance?
The employer pays SSP as if it were normal pay, having deducted tax, national insurance contributions and any other deductions normally made from pay, eg, pension contributions, trade union subscriptions, and attachment of earnings.
Are the arrangements for small employers the same as for large ones?
SSP applies equally to all employers regardless of their size. Small employers used to be granted a relief on payments of SSP above a certain threshold, but this has been abolished since 1995.
Can I insist that workers give me adequate notice if they are going to be off sick?
Employees who are genuinely ill will no doubt be unaware of the start of their illness. If, however, they are to receive, for example, hospital treatment, then they should advise their employer as soon as is practical.
How do I make sure someone is genuinely sick?
- By consideration of all self-certificate and doctors' certificates (see below)
- By following the capability procedure
- By referring the employee to an independent medical examiner.
What constitutes sickness?
Incapacity for work for SSP purposes relates to days the employee is, or is deemed to be, "incapable by reason of some specific disease or bodily or mental disablement of doing work that they can reasonably be expected to do under the contract".
Apart from ordinary sickness or injury, it includes absence from work on the recommendation of a doctor for cautionary reasons or convalescence.
It also includes absence from work by a carrier of an infectious disease.
It is up to the employer to decide whether an employee is incapable of work.
Can I insist on a doctor's certificate?
An employer is entitled to ask for evidence of sickness, eg, a self-certificate for absence for four to seven days or a doctor's certificate for absences in excess of seven days.
Certificates given by people who are not registered medical practitioners, such as acupuncturists, may also be acceptable.
While it is up to the employer to decide whether or not to accept the evidence, most claims for incapacity benefit from the Benefits Agency succeed when supported by such certificates.
What is self-certification?
Absences of between four and seven days may be certified as valid by the employee themselves.
by Jonathan Exten-Wright
Jonathan Exten-Wright is a partner in the employment department of DLA.
