Statutory sick pay: the impact on employment if it becomes a day-one right

Recent analysis by the TUC and Centre for Progressive Change supports previous calls by MPs for a change to the statutory sick pay (SSP) provision. The Labour Party proposes in its manifesto that the right to SSP would be a day-one right should it be successful in the upcoming General Election. In this article, employment lawyer Audrey Williams explains the impact that would have on employers and employees if introduced.

If SSP was introduced as a day-one right, not only would a significant number of workers benefit financially (albeit at a relatively modest level) but it is also clear that the waiting-days rule is having an indirectly discriminatory impact on women. For example, the research from TUC and Centre for Progressive Change has shown that 69 per cent of those who currently have to wait until the fourth day of illness before receiving any support are women.

What would the changes mean for employers?

These changes would mean increased costs for employers. Given this, employers may want to re-visit their company sick pay schemes and consider their sick pay arrangements, especially where they top up SSP to full or half pay. Currently, SSP replaces 17% of average weekly earnings and 47 per cent of employers do not go beyond the statutory minimum level of sick pay provision.

Employers who don’t “top up” SSP with company sick pay would be paying more in future. Many employers pay more than SSP for sickness absence, and for those, the financial impact is likely to be minimal cost-wise because these types of schemes already pay from the first day of absence.

As with all changes, if introduced, all employers will need to ensure compliance with these and any other changes to eligibility (such as removal of the lower earnings limit) through their payroll systems.

An interesting question is whether the current self-certification rules would also change if there is a change to the waiting-days regime. In most organisations, self-certification applies for the first seven days of any sickness absence and currently, unless an employer is topping up and paying company sick pay, they cannot require a doctor’s note or fit note for the first seven days of absence.

Employers may want to plan now and start to consider how any new SSP rules would interact with company sick pay and sickness absence policies which may need to be amended in future. The statutory pay guides, produced by the Government for employers, would also be revised and these will need to be considered by HR and payroll teams.

If you have questions or concerns about how statutory sick pay could impact you or your business, please contact Audrey Williams.