Sick leave and pay: the current situation

SSP: Key points to be aware of and recent developments relating to the Covid-19 pandemic
Overview
All employees, irrespective of age, are entitled to claim statutory sick pay as long as they have average earnings of at least £120 per week from 6 April 2020. For SSP purposes an 'employee' is classed as someone who attracts liability for Class 1 National Insurance Contributions, or would do so if his or her income was high enough.
 
Eligibility begins on the first day of employment - although the employee must have actually started work - on a contract that is to last for at least three months.
 
Married women and widows who pay reduced NICs may be eligible for SSP if they meet the qualifying conditions.

KEY POINTS

  • All employees earning at least the National Insurance Lower Earnings Limit, which is £120 per week gross are eligible for SSP for up to a maximum of 28 weeks. 'Employees' are defined as those liable for Class 1 NICs or those who would be liable if their income was high enough.
  • For the tax year beginning 6 April 2020 statutory sick pay rate is £95.85 per week from 6 April 2020.
  • Employers can opt out of SSP if they operate their own scheme (contractual sick pay). Payments must be at least equal to what would be received under the statutory provisions.
  • Details of the contractual sick pay scheme must be included in employees' written particulars of employment or employees can be referred to other sources of information such as company handbooks.
  • Employers operating their own arrangements must keep records of qualifying periods of sickness.
  • Decisions on long-term ill-health absentees will have to comply with the Equality Act 2010.
  • Employers are liable for the payment of SSP. Any payments are subject to PAYE, National Insurance and any other usual deductions.
  • Generally, SSP is paid only from the fourth consecutive qualifying day of sickness. Absence from work from this day is known as a period of incapacity (PIW). A PIW is the period of time during which an employee is incapable of work.
  • All days including weekends, holidays and days not normally worked are taken into account in calculating the PIW. A PIW which occurs within 56 days of a previous PIW will be linked, counting as one period of sickness.
  • Employees with at least one month's continuous employment who are suspended from work on medical grounds are entitled to remuneration for up to a maximum of 26 weeks.
  • Special rules apply to pregnant employees suspended from work on medical grounds.

RECENT DEVELOPMENTS

Statutory sick pay and the coronavirus 

On Saturday 28 March, new laws surrounding the payment of statutory sick pay (SSP) were introduced.

SSP should now be paid from day one, not day four, of absences in the following situations:

  1. To someone who has the virus
  2. To someone who is self-isolating for seven days because they have even mild symptoms
  3. To someone who is self-isolating for 14 days because, whilst they don’t have symptoms, they are living with someone who has even mild symptoms.

If someone is self-isolating because they are living with someone who has symptoms, and then start to show symptoms themselves, the 14-day isolation no longer applies and they should instead self-isolate for seven days. This could prolong, or shorten, the overall period of the leave.  

The ‘SSP day one’ rules only have effect for anyone whose first day of incapacity (or deemed incapacity in the case of self-isolation) was Friday 13 March 2020 or later.

17 April 2020 update - employees shielding entitled to SSP

Legislation put in place on 16 April 2020 means that people who are shielding are entitled to SSP.

This closes the hole that was created by previous legislation when it included those who are self-isolating for 7 or 14 days within the scope of SSP but did not mention those shielding. This means that employees who got a letter from the NHS telling them to avoid face to face contact for 12 weeks because they are considered to be very high risk should now receive SSP from day one.

People who are shielding can be furloughed even if there is work for them to do, however SSP cannot be reclaimed under the Job Retention Scheme.

The government is expected to refund up to two weeks of SSP for absences related to the coronavirus as part of the SSP Rebate Scheme. However, it is not currently known when this will come into force.

19 May 2020 update

The Coronavirus SSP Rebate Scheme is to launch on 26 May 2020. Through the use of this scheme, eligible companies will be able to claim back up to two weeks of SSP payments for coronavirus related sickness absences. 

28 March 2020 update

Entitlement to statutory sickpay has been extended, under The Statutory Sick Pay (General) (Coronavirus Amendment) (No. 4) Regulations 2020, to people who have been told to isolate under the new 'Test and Trace' system, which starts in England today. Other parts of Great Britain have similar, but not identical, Test and Trace systems.

Accordingly a person who has been notified that they have had contact with a person with coronavirus, and who is self-isolating for 14 days as a result, will be entitled to statutory sickpay.

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