Statutory sick pay: A guide for employers.

This article has been written by Pilla Founder, Liam Jones, click to email Liam directly, he reads every email.

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Eligibility criteria

To be eligible for statutory sick pay, an employee must meet certain criteria. They must :

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    Be classified as an “employed earner,” meaning their employer is liable to pay National Insurance for them

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    Have an average income of at least the lower earnings limit (£123 in 2023/24)

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    Have fulfilled some of their contractual obligations

Part-time and agency workers, including any agency worker, are also eligible for SSP, provided they meet the necessary qualifications.

Calculation and payment

Statutory sick pay, (also known as paid SSP), is calculated and paid through the employer’s payroll system. The weekly rate of SSP is £109.40, and it applies to employees who are absent from work due to a mental health condition or other physical health issues.

However, it’s important to note that statutory sick pay is not paid for the first three working days of an employee’s absence due to illness, known as “waiting days”. After this waiting period, eligible employees can receive SSP for up to 28 weeks.

Company sick pay schemes

While statutory sick pay provides a base level of financial support, some employers offer additional company sick pay schemes to their employees. These schemes can offer enhanced benefits, such as full pay for a certain period, followed by reduced pay, acting as a support allowance - company sick pay schemes typically provide full pay for a certain period, followed by reduced pay. The duration of the full pay period and the amount of reduced pay may vary depending on the scheme.

It’s important to include details of sick pay entitlements in employment contracts to make sure employees are aware of their rights and responsibilities in the event of illness or injury.

Sick pay for part-time workers, agency workers and zero-hours contract workers

Sick pay entitlements can vary depending on the type of employment contract an individual has. For example, part-time and agency workers are generally eligible for SSP, while those engaged on a zero-hours contract may be eligible depending on their average earnings.

For part-time and agency workers, statutory sick pay eligibility is subject to meeting the necessary criteria, such as earning at least £123 per week on average. Interestingly, part-time workers who meet the eligibility criteria qualify for SSP at the normal full weekly rate and do not receive a proportionate amount.

For zero-hours contract workers, statutory sick pay considerations include their average earnings and qualifying days. Calculating sick pay for zero hours contract workers cis more difficult so we've wrote a separate article for that which you can see by scrolling down.

Proof of sickness and fit notes

When an employee is unable to work due to illness, they may need to provide proof of sickness to their employer. This can be done through self-certification or by obtaining a fit note from a doctor, especially when they need to take a work sick leave.

Both employees and employers should understand the process of providing proof of sickness so that everybody knows what should happen during periods of absence.

For short-term sickness absences, employees can self-certify by completing a form that serves as evidence of their sickness absence. This process allows employees to provide their own proof of illness without requiring a fit note from a physician.

Self-certification is typically allowed for the initial seven days of absence from work.

For longer periods of sickness absence, employees may need to obtain a fit note from a doctor. The fit note serves as an official statement from a registered healthcare professional, such as a doctor, confirming that an employee is ill and unable to work.

Obtaining a fit note from a doctor can be used to provide evidence of one’s illness to their employer and can be used to claim statutory sick pay.

Impact of sick pay on tax credits, pensions and universal credit

Receiving sick pay, whether it’s statutory or from a company sick pay scheme, can have an impact on other benefits an employee may be entitled to. Some examples include:

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    Claiming statutory sick pay or other sickness benefits can affect tax credits

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    Claiming statutory sick pay or other sickness benefits can affect pensions

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    Claiming statutory sick pay or other sickness benefits can affect eligibility for universal credit.

Employees should be aware of how their sick pay entitlements might affect their eligibility for other benefits.

Claiming statutory sick pay or other sickness benefits can have an effect on tax credits. When considering tax credits, receipt of statutory sick pay may influence eligibility for Working Tax Credit.

Sick pay can also have an impact on pension and universal credit entitlements. If unable to work for a period exceeding one year due to illness or disability, an employee may be eligible to receive credits towards State Pension.

Additionally, if the illness or disability impedes or prevents the employee from working, they may be eligible for additional monthly payments with Universal Credit.

Returning to work after sick leave

Returning to work after a period of sick leave can be a daunting prospect for employees. Effective communication between employees and employers is key during to facilitate a smooth transition back to work.

This may involve a phased return to work, in which the employee gradually builds up their working hours or responsibilities.

A phased return to work is a supportive approach that allows employees to gradually resume their working hours and responsibilities after a prolonged period of absence due to illness or surgery. This process typically involves reduced hours and medical support, ensuring that employees can return to work in a safe and manageable way.

When working reduced hours, employees should receive their normal pay for the days they work and statutory sick pay (SSP) for the days they do not work.

Seeking help and support

If employees encounter difficulties with sick pay or entitlements, seeking assistance and support from various sources is advisable. Trade union representation and free advice services can provide valuable guidance on sick pay rights and entitlements.

Free advice services, such as Citizens Advice and ACAS, offer valuable guidance on sick pay rights and entitlements for employees. These organisations provide complimentary advice on a variety of topics, including sick pay, ensuring that you have the information and support you need to address any concerns or challenges you may face with sick pay.