A new report, which includes a survey of over 1000 employers, argues that the Statutory Sick Pay (SSP) rate system is broken and needs urgent reform.
In What Should an Effective Sick Pay System Look Like?, the Chartered Institute of Personnel and Development (CIPD) shows that nearly two-thirds (62%) of employers agree that the SSP rate is too low and should be increased. You should consult our payroll provider in case of any questions.
Even the majority of SMEs, which would typically find it harder than larger employers to cover increased SSP costs, are supportive of a rate increase (57%).
The current UK SSP rate stands at £96.35 per week for up to 28 weeks which is, the CIPD notes, very low compared with most other European countries.
It suggests that the Covid pandemic has further exposed how financially inadequate SSP is, with many people still working when ill or needing to self-isolate. With concerns now growing about the potential impact of the Omicron variant, the CIPD says steps must be taken to ensure SSP provides a better financial safety net.
Many of the country’s lowest paid and most vulnerable workers — who likely need the most financial support — are excluded from accessing SSP, it explains.
Of the UK’s 32.5 million-strong workforce, 5.6 million people (17.2%) do not currently qualify for SSP. This includes the self-employed and those who are unable to access SSP because they do not meet the lower earnings limit (an employee must have average weekly earnings of at least £120 a week to qualify).
The CIPD is calling for the Government to raise the level of SSP to be at least equivalent to someone earning the National Minimum Wage/National Living Wage. For example, for someone aged 23 or over, working seven hours per day, their pro rata daily SSP rate would be £62.37.
The CIPD also recommends widening eligibility for SSP by removing the lower earnings limit, as well as further consultation looking at wider reform of SSP, such as amending the rules to allow for phased returns to work, removing the three qualifying days for payment of SSP, and looking at opportunities to improve income protection for the self-employed.
Its report can be found here.
Comment by Kate Palmer, HR Advice and Consultancy Director at Peninsula
Extending the scope of Statutory Sick Pay may encourage more employees to take time off when they need it, thus reducing the circulation of various illnesses amongst workplaces.
The need for this has been heightened throughout the Covid pandemic and particularly as we see a rise in cases of the Omicron variant. However, the benefits of increased payments to employees must be balanced against the increased financial pressures on employers to meet these requirements.
Support for businesses may be needed to compensate additional outgoings, especially if there are more employees going off sick.