Once again the Government is looking to meddle with SSP. It isn’t enough that small employers can no longer recover any monies towards paying employees SSP they now want to “flex” it. Under current rules, SSP is paid as long as certain criteria is met for 28 weeks, but only whilst an employee is not in work.
The Government is looking for ways to “encourage” employers to adopt a phased return to work for employees and for employees to want to do a phased return to work. Now whilst I really do support the concept of it is better to pay someone the weekly SSP rate and they do some work, than them be at home being paid it for no work, there are risks. The paper is proposing two types of schemes (thanks to the Chartered Institute of Payroll Professionals for publishing these);
An employee works 25 hours a week for £7.20 per hour or £180 per week. If they went on a period of sickness absence they will need to return to work for at least 13 hours in order to compensate for the loss of £88.45 in Statutory Sick Pay (13 hours x £7.20 = £93.60).
If the employer and employee came to an agreement for a partial return to work of 10 hours per week, the employer would ‘top up’ the salary to the Statutory Sick Pay level.
For example, the employer would pay £72 in wages (£7.20 x 10 hours) plus £16.45 to ‘top up’ to the Statutory Sick Pay rate of £88.45.
Employee would get £72 wages (40% of total, matching the time they work) plus around £53 of their SSP (60%), and it would be worth their while to return to work.
From their employer’s point of view, they could either pay £88.45 for the employee to do nothing, or pay a total of around £125 to have them at 40% capacity, and the knowledge that they will return to work completely, so no replacement costs.
This would mean that the maximum amount of Statutory Sick Pay and/or pay spent by employers and received by employees during a period of transition back from sickness remains constant.
Currently if someone is sick, SSP has to be paid and or offset against pay if an occupational sick pay scheme is in place for 28 weeks, then an SSP1 is issued when runs out; job done until they return to work from a payroll perspective. Of course from an HR perspective there is much more, as they have a responsibility to the employee and the organisation in respect of employee welfare and of course business costs in temporary recruitment and payment. But looking at the costs and the admin process to do either of the options above, it is surely up to the employer what they wish to pay an employee?
We have National Minimum Wage and National Living Wage regulations so any hours a person does must be paid at the correct rate, SSP must be paid for at least 28 weeks so do we now need another piece of red tape that off-sets SSP with some sort of pay every time an employee is sick and then wants to have a phased return to work? Will it only apply if the employee has been off for a certain length of time or every time an employee is off sick?
Initial anecdotal evidence would suggest some employers don’t feel it is their responsibility for an employee’s health, which I suppose you could argue to a degree is true, but bearing in mind when a person does exhaust their SSP entitlement, they then receive some form of benefits, this is tax payers money so we as a society pay for sickness payments anyway? The paper also suggests how employers could benefit from insurance schemes to help manage the cost of sickness; again should employers, especially small employers have to bear such costs?
What about the Government’s commitment to employees and returning to work sooner? Whilst not many small employers provide private health care, there are many larger employers who do. This is a cost to them, but they do so to reduce the length of time a person is off, for example waiting on an operation and until the operation they cannot work? Private health care can often offer a speedier outcome meaning the employee returns to work sooner. But there is no tax relief on such care, instead the employee has to paid tax on the payment made by the employer, even if they never use it (which we all hope is the case) and the employer has to pay Class 1A National Insurance contributions on it.
Some might say the Government just wants to reduce their own pay bill and pass on to employers; what say you?
There are lots of other ideas, some of which look to be very positive to reform work and health, and employers should have a look via this link.
