Do I have to Provide Sick Pay to Employees? Sick Pay Rights Comprehensive Guide

As an employer within the UK, you are legally required to provide some form of Sick pay to your employees whenever they are sick and off from work.

Statutory Sick Pay (SSP) are mandatory for you and must be paid within a stipulated period if the worker is eligible for it.

Apart from SSP, many companies offer company or occupational Sick Pay to the employees willingly. There are requirements, eligibility criteria and dos and don'ts when it comes to Sick Pay. It is therefore essential that you understand them as an employer.

What is Sick Pay?

Sick Pay is the money paid or funds provided to an employee by an employer when they are sick and absent from work for a given number of days and within a specific time frame. In the UK, it is an obligation for companies to pay a worker when he or she is sick. This Pay is done for up to 28 weeks. Although there is a specific rate to the amount that must be paid, however, employers could go beyond the minimum fixed Pay but must not go less than that.

Types of Sick Pay?

There are two types of Sick Pay

1. Statutory Sick Pay(SSP)

This is the required amount that must be paid to an employee who is off work. Statutory Sick Pay is an obligation and must be fulfilled by every employer. The current minimum rate of SSP within the UK is £116.75 per week and no employer must go below this rate. SSP is crucial and failure to fulfill it could warrant some penalty if the sick employees make some filings against the company with the HMRC. SSP is paid to Employees who have been sick for at least for 4 consecutive days.

2. Occupational or Contractual Sick Pay

The government does not mandate this type of sick pay so it could be optional. However, when a company offers occupational sick pay, it must not be less than the statutory sick pay. Occupational sick pay is also paid to employees who are off work due to sickness.

The company is responsible for this and could therefore come up with the rules and regulations that guide this pay. Also, there are no fixed amounts to occupational sick pay as different companies offer varying amounts based on their discretion. Apart from that there are no penalties whatsoever if a company doesn't offer this Pay.

Who is Eligible for Statutory Sick Pay?

An employee is eligible for Statutory Sick Pay if they meet the following criteria.

• Have a job contract with the company either a part-time or full-time job.
• Earn at least £123 per week within the company.
• Have worked for a period of time with the company
• He or she has been sick for 4 consecutive days including the weekends or non-working days. These days are known as the qualifying days.
• Have notified the company within the specified period of notice.
• If they have self certify that they are sick within 7 days.
• If they have provided a fit note or sick note if the sickness lasted for more than 7 days.

When do I have to Start Paying SSP?

Statutory Sick Pay is paid when an employee has been off work due to sickness for four days in a row including non-working days. These four days are known as qualifying days as it makes the employee eligible to receive SSP.

However, the first 3 days are known as waiting periods. So an employee who has only been off work for 3 days may not be eligible for an SSP as it's not a legal obligation. However, we've had many companies offer sick pay to employees even from day one.

If an employee has been sick for 3 days but has also received an SSP within the last 8 weeks, then they would be eligible for Statutory Sick Pay. Also, SSP should be paid on a normal day when wages or salaries of employees are paid.

Requesting a Fit note

If an employee has been sick for more than 7 days, you can request a fit note from them. A fit note, also known as a sick note is a statement or document given to an employee by an expert healthcare professional to provide an assessment of the employee's nature of sickness and their fitness for work.

A fit note is necessary as it helps the employer understand how the worker's sickness influences their overall health, fitness for work and the specific treatment that could be given to help the employee have a healthy lifestyle.

Apart from that it helps the employer understand if the worker would require a specific working environment that will meet up with their health condition. Not all health workers can provide a fit note, below are the recognized ones that can provide it.

• Doctors
• Registered nurses
• Occupational therapist
• Pharmacist
• Physiotherapist

While an employee is required to provide a fit note after 7 days of being off sick, an employer cannot withhold their statutory sick pay if the fit note is not provided on time. Getting a fit note could take some time as the sick person could have difficulty getting out of bed, visiting the hospital or getting a suitable appointment time.

How much is Statutory Sick Pay?

As of April 2024, the Statutory Sick Pay is £116.75 per week and this must be paid on normal days on which wages or salaries of workers are paid.

How much is Occupational Sick Pay?

Occupational or Contractual Sick Pay doesn't have a fixed amount and so it varies among companies. Any amount could be paid to employees for this type of Sick pay but must not go beyond the statutory sick pay. Occupational Sick Pay isn't compulsory legally so there are no penalties when they are not paid to workers.

Do I have to Pay tax on Statutory Sick Pay?

Yes, taxes are paid on Statutory Sick Pay. SSPs are considered as income and so income tax and the National Insurance Commission are applied to it. Since an SSP will usually be lower than your normal salary, you should expect just little tax deductions.

Can the Self-Employed Claim Statutory Sick Pay?

Statutory Sick Pay is paid by an employer to an employee. As such a self-employed individual who doesn't work for a business or company is not eligible to claim an SSP. However, they might be eligible for Employment and Support Allowance (ESA).

Employment and Support Allowance is a form of state benefit introduced in the year 2008 to provide financial support to sick or disabled people who are unable to work and who don't receive income. Apart from that it is important for every self-employed individual to consider having insurance on their income in case they fall sick at one point or the other.

When is an Employee not Eligible for Statutory Sick Pay?

An employee is not eligible for a Statutory Sick Pay if:

1. They have been Sick for less than 4 days.
2. They have already elapsed the 28 weeks of SSP requirements.
3. The employee is on statutory maternity pay or off work due to pregnancy-related sickness in the last 4 weeks of their due date.
4. They did not provide a notice of their sickness to the company within the specified period and did not follow the right procedures.
5. They are not willing to provide proof of their sickness either through self-certification if the illness is within 7 days or a fit note if it extends above 7 days.
6. They earn below £123 per week.
7. They are outside of the EU and the company is not liable for their National Insurance Commission.

What Happens When SSP Elapse?

In a situation whereby the employee has already used the 28 weeks Statutory Sick Pay requirements, then there are some other options you could explore.

While some companies do offer extended sick pay, others do not. Either way, a company could encourage the sick employee to go for Employment and Support Allowance ( ESA) and Universal Credits if they have elapsed the 28 weeks.

With this, the employee will need to send the sick employee an SSP1 form. The employer would need to send this form to them within 7 days of being sick so they could get it through ESA right on time.

Although a company is not mandated to pay SSP after the 28 weeks end, they could help sick employees explore other options. Also, an employee is expected to keep in touch with the company as they still have a contract running with them.

What Happens if Employee Sickness is Caused by Work?

If an employee is sick as a result of the nature of their work or if they sustain an injury due to a work operation, then they are treated with the same Statutory Sick Pay scheme. This means there are no other separate or additional legal treatments even if the illness is caused by work.

However many UK companies have their company pay and benefits for employees who are sick due to work. These are included in the company's sick pay policies and entitlements. It is therefore important for workers to go through this properly especially if their job nature is a fragile or susceptible one.

Employer's and Employees Responsibilities on Sick Pays

Employees and Employers have some responsibilities when it comes to paying, receiving and recording SSP.

1. Maintain an Accurate Record of Sick Pay

Statutory Sick pay is a legal requirement and so the records of it must be kept adequately. It must be kept up to date and must show the amount paid for every sick employee and the number and length of time it was paid.

2. Pay the Sick allowance on time

Sick Pay should be paid if an employee is sick for at least for 4 days and if they meet the other eligibility criteria above. It must be paid on the normal days on which wages or salaries are paid.

3. Have a transparent sick pay policy.

Your company should have a transparent sick pay policy. This should be accessible and easily understandable by each worker. Apart from that every sick worker should receive their sick Pays based on what the company's sick policies say.

To the employees, you are responsible for

4. Informing the company

As an employee, it is important to inform your company about the sickness as soon as it starts. This would make you eligible for sick pay if you would later need one. Be sure to understand the company policies when it comes to the required sick notice period.

5. Providing a fit note

A fit note helps explain an employee's fitness for work to the employer. While you might not need this if the sickness is below 7 days, you would need it if it's above that 7 days. As such the employee is responsible for getting the fit note to send to the company.

Why is it important to Provide Sick Pay to Employees?

Every employer within the UK must pay the Sick Pay because:

1. Boost employee morale

Employees are an essential part of the company because without them the aims of the company might not be easily achieved. Paying employees even when they are sick and out of work means you value them. This in turn boosts their morale and encourages them to work harder when they get better and resume work.

2. Prevent the Spread of disease

When employees know they'll be paid even when they are Sick and out of work, it encourages them to seek medical attention right on time. Nobody wishes to be out of funds and as such if there are policies against payment of sick pay, then employees could fear the risk of running out of money and therefore stay within the job while sick.

Moreover, employees would need to pay some bills when they visit the clinic which might be difficult for them. So if an employee suffers from a contagious disease and doesn't go for treatment because of the fear of not being paid, then the disease could easily spread within the company.

3. Prevent the Company from legal consequences.

Statutory Sick Pay is a legal obligation and must be fulfilled by every employer of a company. Complying with it means the company is giving itself a good record and failure to comply with it could lead to some legal consequences.

4. Improves Work-life balance

When employees are paid while sick, they feel the company values their health and they won't have to run out of funds. This therefore enables them to seek the medical attention that's needed at the right time. A work-life balance is needed to be a fully functioning individual.

5. Reduces Absenteeism

When employees are allowed to take sick leave and they are paid during the illness, the chance of being absent after recovery is reduced as they would have gotten enough time to visit the hospital or clinic when needed and they'd even get some allowance that could be added to their hospital bills.

Form Your Company with Incorpuk Today

At Incorpuk, we will help you through the company formation process and file your confirmation statements to help your business stay compliant. Whether you're a UK resident or a non-UK resident, our team is ready to provide guidance and help you establish your company in the UK. Contact us here today.

Conclusion

As an employer within a company, understanding the other benefits that must be paid to Employees apart from their wages and salaries is crucial. Sick Pay is mandatory and must be paid to avoid some legal penalties. Apart from that, fulfilling the sick pay of workers on time shows that you value their well-being and this boosts their morale.