Statutory Sick Pay (SSP) and Occupation Sick Pay (OSP) 

Let’s get down with the sickness! 

It’s an offer that everyone would rather refuse, but sickness is an inevitable part of managing a workforce. And that means sick pay. Still, it can be relatively painless if you know what it’s all about.  

So, take a deep breath and bite down on this stick—we’ll try to make this quick.  

What is Statutory Sick Pay (SSP)? 

From 1983 and under the Social Security and Housing Benefits Act 1982 employers in Great Britain became responsible for paying SSP for the first 8 weeks of illness but were reimbursed for payments. But in 2014 even the percentage threshold scheme (PTS), which allowed smaller employees to reclaim any amount of statutory sick pay (SSP) exceeding 13% of their National Insurance Contributions (NICs) bill for the month, was scrapped. And now all employers are responsible for paying Statutory Sick Pay for the first 28 weeks of illness if certain conditions are met by their employees.   

What are the conditions? 

Only those with the employment status of an employee have the right to receive SSP and they still accrue annual leave during periods of sickness. And while workers have recently been afforded more statutory rights, the right to sick pay isn’t one of them.  

Other than being an employee, a person must: 

• Have completed some work for you. So, if your new starter calls in sick on their first day at work, you don’t have to pay them SSP. 

• Have been ill for more than 4 days in a row. The first 3 days are considered waiting days and aren’t paid. And even if an employee comes in and works for one minute before going home, that day will not count as a qualifying waiting day. The only instance that a 3-day waiting period doesn’t apply, is if they’ve been off within the last 8 weeks, which is considered a linked sickness.  
• Earn an average of at least £123 a week. 
• Let you know within 7 days or in line with your sickness policy. You don’t have to pay SSP for any days that they were late in telling you unless there’s a good reason for why they were late. And you can’t insist they tell you in person or use a particular method or form. 
• Be available to work if it wasn’t for the illness. So, if they’re on strike or incarcerated, you’re not obliged to pay SSP. 
• Provide a fit note (often called a ‘sick note’) after 7 days of consecutive illness, including non-working days, if you request one. But you can’t withhold sick pay for a late fit note. And fit notes must be issued by either a GP or hospital doctor, a registered nurse, an occupational therapist, a pharmacist, or a physiotherapist. The last three can provide an Allied Health Professional (AHP) Health and Work Report in place of a fit note, but only if you agree.  

 
If all the conditions are met, and an employee isn’t on strike or already receiving maternity allowance, then you’re legally obliged to pay SSP. And an employee’s right to sick pay only ends when their contract ends—even if your organisation ceases trading. 

If an employee doesn’t qualify for sick pay, you must send them form SSP1 within 7 days of getting sick. Likewise, if they’re approaching the maximum SSP of 28 weeks and their illness is likely to last longer than the remaining allowance, you must send them form SSP1 on or before the beginning of the 23rd week of sickness. This supports any application for Universal Credit or Employment and Support Allowance (ESA). 

How do I pay and how do I calculate SSP? 

The weekly SSP rate for 2022/23 is £99.35, irrespective of earnings over £123 or working patterns. It’s paid in place of wages or salary, in the usual way for your organisation, and deducting tax and National insurance. 

To calculate the daily rate, simply divide the weekly rate of £99.35 by the number of qualifying days or working days for that employee. Multiply that figure by the total usual working days that have been taken off sick for the total SSP owed.   

Here’s an example: 

Sheila works from Monday to Friday every week. She’s been off sick from Monday 5^th September. You’d start paying Shelia SSP at a daily rate of £19.87 (£99.35 ÷ 5) on Thursday 8^th September.  
 
Eek! Get well Sheila because you’re unlikely to cover your soaring energy bills with that.  

Luckily for Sheila her organisation is one of an increasing number to recognise that SSP is inadequate. In most EU countries, the proportion of an individual’s wages that are covered by sickness benefits ranges between 70 per cent and 100 per cent, compared to the UK’s rock-bottom replacement rate of just 20 per cent. In fact, two-fifths of workers say they’d be forced into debt or arrears on their bills, if their income dropped to the current level of statutory sick pay (SSP).  

So, what’s occupational sick pay (OSP)? 

Most people-focused organisations can avoid high staff-turnover and protect their team by offering a higher entitlement as part of an occupational sick pay scheme. Such benefits packages are usually based on wage or salary. For example, you might offer full pay for the first eight weeks of sick leave and then half pay or statutory pay only for the remaining 20 weeks. But unlike SSP, it’s entirely up to you. 

For organisations that do offer OSP, it’s important that HR professionals consider the following: 

1. Any enhanced scheme offered to employees should be outlined in their terms of employment. 

2. It’s important that the benefits are explicitly stated within an employee’s contract, to avoid unintended legal implications. For example, is no duration is specified, then a reasonable duration will be implied (Howman v Blyth [1983] IRLR 139). 

3. Terms relating to withholding OSP should be set out in the employee’s contract. Otherwise, the employer risks unlawfully deducting wages. 

4. HR departments must be very careful when stopping any discretionary sick pay to avoid allegations of discrimination under the Equality Act 2010. 

We suggest clearly laying out an occupational sick pay scheme policy in a worker’s employment contract and/or staff handbook. Explain the scheme, the qualifying period of service required, how sickness is recorded, and the duration of the scheme. It’s also sensible to explain the procedure after occupational sick pay runs out and any exclusions, such as professional sports injuries or working for private gain for another company. 

Using software to manage sickness 

Just like any statutory employment rights, sick pay regulations are updated regularly. And the increase in staff sickness throughout the pandemic raised serious questions about the effectiveness of the SSP scheme—particularly its failure to protect the lowest paid and most vulnerable members of our society. So, it seems likely that SSP rules will be overhauled in the coming years.  

To make sure that your organisation stays compliant it’s a good idea to consider software that manages SSP, OSP, and any changing regulations. Good HR software solutions can track and automate employee sickness data, manage sick pay schemes, and give employees a self-service portal to manage and track their own data. And line managers and HR managers can manage sickness, as well as view and report on trends at the touch of a button.   

Since we all have to get down with the sickness at some point, might as well make the experience as painless as possible for everyone involved. 

So, cosy up with SenseHR. We’ll take care of you and your people, through flu season and beyond. Now, that’s better than a cup of Lemsip, an 18-tog duvet, and binge-worthy boxset.