UK Government to Extend Statutory Sick Pay Entitlement to Day One of Absence - McDermott Will & Emery

UK Government to Extend Statutory Sick Pay Entitlement to Day One of Absence

|

Overview


The UK Prime Minister has announced that:

  • during the Coronavirus outbreak SSP will be paid from the first day of absence, not the fourth.
  • those who are in self-isolation should be treated as being on sick leave as they are “helping to protect others from the virus and should not be penalised for doing the right thing”

This announcement follows concerns that employees who elect to self-isolate in line with UK Government guidance (but are not subject to a formal medical notification to do so) would not be entitled to SSP under the existing rules and would be entitled to no sick pay for the first three days. Emergency legislation is expected imminently.

In Depth


Statutory Sick Pay (SSP) in the United Kingdom

SSP is the minimum amount that a qualifying UK employee is entitled to receive if they are unable to work due to illness orincapacity.

SSP is currently £94.25 per week (and is expected to increase to £95.85 on 6 April 2020) and is payable by the employer for up to 28 weeks.

In order to qualify, an employee must;

  • have been unable to work due to illness or incapacity (or because they are subject to a medical notification that deems them to be considered sick) for four or more days in a row (including non-working days)
  • earn an average of at least £118 per week
  • comply with rules for notifying their employer that they are on sickness absence

An eligible employee cannot receive less than SSP, but of course may receive more if their employer offers an enhanced sick pay scheme or decides to pay more on a discretionary basis.

Emergency Measures

The Prime Minister has announced that:

  • During the Coronavirus outbreak SSP will be paid from the first day of absence, not the fourth
  • Those who are in self-isolation should be treated as being on sick leave as they are “helping to protect others from the virus and should not be penalised for doing the right thing”

This announcement follows concerns that employees who elect to self-isolate in line with UK Government guidance (but are not subject to a formal medical notification to do so) would not be entitled to SSP under the existing rules and would be entitled to no sick pay for the first three days.

Impact on UK Employers

  • It is important that UK employers keep abreast of these changes (emergency legislation is expected imminently) and communicate them appropriately to staff. Payroll functions will need to be updated to ensure that the correct amounts are processed
  • The financial impact on UK employers of paying the additional three days’ SSP works out at approximately GBP40 per employee
  • The UK overnment is also likely to come under pressure to reduce or remove the earnings threshold in order to reduce the risk of employees who would not otherwise receive SSP, for example, those on zero hours contracts, going into work when they should not
  • However, confirmation that SSP should be applied to those who self-isolate on medical advice, or possibly even simply in accordance with guidelines published by the Government (we await the specific detail of the proposed change), even if they are not actually sick, is likely to significantly increase the number of employees to whom SSP must be paid
  • These measures will put pressure on employers who offer enhanced contractual sick pay arrangements to apply them in the same way
  • Many enhanced schemes provide that sick pay will be paid subject to receipt of a doctor’s note covering the whole period of the absence. However, given the inevitable pressure there will be on GP services, applying that condition to those who are away from work in order to prevent the spread of the virus may become untenable and unreasonable. It could be subject to challenge as a breach of the implied terms of trust and confidence between employer and employee
  • This means that employers offering enhanced sick pay schemes should prepare themselves for the fact that an employee who is not sick, but who is unable to come to work for a Coronavirus related reason related to them, will be covered by the scheme
  • A key way in which employers might insulate themselves from this cost is to take urgent steps now to ensure that robust remote working and contact limitation strategies are put in place for as many employees as is possible, that can implemented now or at an appropriate juncture with a view to minimising exposure to the virus

For information on other key Coronavirus-related considerations for UK employers, please see our separate alert here.

In addition, our Coronavirus Resource Center, brought to you by a multi-disciplinary team, will keep you informed of the latest developments and provide comprehensive insight to help you navigate this crisis with your employees, and those you serve.