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Statutory Sick Pay

Statutory Sick Pay (SSP) was introduced in 1982.

Payment is made by employers (including Employment Businesses), although the HM Revenue & Customs (HMRC) ensure compliance

Who Is Entitled to Statutory Sick Pay:

  • PAYE Agency Workers are entitled to Statutory Sick Pay, provided they meet the statutory criteria applicable to all employees. 
  • Limited Company Contractors are not entitled to Statutory Sick Pay. 

Prior to October 2008, Agency Workers only qualified for SSP if they worked on an assignment or a series of assignments totaling 13 weeks or more, but since October 2008 all Agency Workers are able to claim SSP from day one and without any qualifying period, provided they meet the statutory criteria applicable.

Criteria:

An Agency Worker will not be entitled to claim SSP if:

  • Their normal weekly earnings are less than the lower earnings limit for NI contributions.
  • During a period of 57 days ending immediately before the relevant date, the Agency Worker had at least one day on which he/she was entitled to invalidity pension, sickness benefit or maternity allowance.
  • The Agency Worker has done no work for Raeburn under their contract (e.g. not started the assignment)
  • The Agency Worker is away from work because of participation in a trade dispute
  • The Agency Worker is, or has been, pregnant and the relevant date for ascertaining liability for SSP falls during maternity leave
  • The Agency Worker is in police custody or is in prison on the first day of their incapacity for work.
  • The Agency Worker is outside the EU area at any time on the first day of the period of incapacity for work.

Statutory Sick Pay Amounts:

This rate is subject to change in each tax year. The current rates are as follows:

 From 6th April 2015 Maximum Period 
Sick Pay:£88.45 per week28 weeks in any 3 year period 

 

SSP1 Form:

If an Agency Worker is not entitled to Statutory Sick Pay by law, a Form SSP 1 should be completed by the Employment Business which will enable the Agency Worker to claim Social Security Benefit.

The form must be given or sent to the Agency Worker no later than seven days after they have notified the Employment Business of sickness. Any doctor’s notes and other documentation relating to the period of incapacity for work should be returned to the Agency Worker with the SSP 1.

Is the Employment Business Liable to Pay Statutory Sick Pay?

Employment Businesses fall within the definition of “employer” under the 1992 Act if they are liable to pay Secondary Class 1 National Insurance Contributions in relation to any earnings of their Agency Workers under a contract.

How Does an Agency Worker Qualify for Statutory Sick Pay?

There are three qualifying conditions for entitlement to SSP. Entitlement can only arise if all these conditions are satisfied.

They are:
  1. That the day of sickness falls within a period of at least 4 consecutive days known as “period of incapacity for work” 
  2. That they are employed (or engaged) at the time and it falls within the “period of entitlement” 
  3. It falls on a “qualifying day” i.e. in practice a day on which they would normally work.

 

Period of Incapacity for Work (“PIW”)

The Employment Business will be liable to pay SSP provided the Agency Worker is off sick on a day on which they would normally work as part of a “period of incapacity for work” (PIW). That period must be 4 or more consecutive days of sickness and can include Saturdays and Sundays if they normally work on those days.

If the Agency Worker is off sick for less than 4 consecutive days there is no Period of Incapacity for Work and therefor no entitlement to Statutory Sick Pay.

Statutory Sick Pay is not payable for the first 3 Qualifying Days (QDs) in a Period of Incapacity for Work (PIW). These are called Waiting Days (WD).

If an Agency Worker has more than one period of sickness, each of which lasts for four or more calendar days in a row, and those two Periods of Incapacity for Work are separated by periods of no more than eight weeks (ie. 56 days), they will be treated as one single PIW. The effect of this is that if Statutory Sick Pay is payable in respect of the first PIW, it will automatically be payable for the second PIW. A series of periods of incapacity for work will therefore be linked if the breaks in between are no more than eight weeks in duration. The maximum entitlement is still 28 weeks. However, if there is a break of more than eight weeks between periods of incapacity for work, the maximum liability of 28 weeks will begin again. For example, the Agency Worker is absent for 2 weeks but returns to work for 12 weeks and is then absent again for a further period of 28 weeks. In that case, the employer’s liability for that worker will be 30 weeks.

It is not necessary for the sickness to start on a QD, for example where the sickness began on a day when they would not be working. Where Periods of Incapacity for Work are linked and not all of the three Waiting Days have been served in the first PIW, the remaining WDs must be served at the beginning of the next linked PIW. But once served there is no need for them to be served in any further linked PIWs.

Period of Entitlement

Any day of incapacity for work must fall within a period of entitlement.

This begins with the commencement of a Period of Incapacity for Work, i.e. the first day of sickness, and ends when Raeburn’s liability towards that Agency Worker ceases, when the first of the following occur:

  • Termination of that Period of Incapacity for Work (ie. the Agency Worker is no longer ill) 
  • The day on which the Agency Worker reaches their maximum entitlement to SSP (a total of 28 weeks) 
  • The day on which the Agency Worker’s contract expires or is brought to an end 
  • In the case of an Agency Worker who is or has been pregnant, the day immediately preceding the maternity pay or maternity allowance period.

Qualifying Days

The third condition for SSP eligibility is that the day of incapacity for work is a “qualifying day”.

A qualifying day is a day of the week when the Agency Worker is required by their contract to be available for work or a day or days which is/are chosen to reflect the terms of that contract. Where qualifying days are determined by agreement between the Employment Business and the Agency Worker, there shall be at least one qualifying day in each week (beginning with a Sunday), so a contract should specify which day or days of the week are to be qualifying days. Where the contract does not specify a qualifying day or the days on which the Agency Worker must be available for work, the 1982 Regulations provide that the qualifying days will be either:

  • The day or days on which an Agency Worker is or was required to work for the Employment Business 
  • If the Employment Business and the Agency Worker agree that there are no specific days on which an Agency Worker is required to work, the qualifying day will be the Wednesday in any week 
  • If the Employment Business and the Agency Worker cannot reach agreement about the days on which an Agency Worker is or is not required to work, the qualifying days will be days that none of the Agency Workers are or were required to work, e.g. Saturdays and Sundays.

When is Statutory Sick Pay Paid?

The Employment Business is required to pay Statutory Sick Pay on the usual payday (ie. the first day on which the Agency Worker would have been paid for their work on the day for which they are claiming SSP).

Statutory Sick Pay is only paid for qualifying days. The daily rate is the weekly rate divided by the number of qualifying days in the week for which you are paying SSP. If there is only one qualifying day a week, the entire weekly rate is payable for absence on that day. For SSP purposes, weeks begin on a Sunday.

SSP is treated like pay and so deductions for PAYE, Income Tax and National Insurance Contributions must be made before payment.

SSP is not payable for the first three qualifying days in any period of entitlement. These are called “waiting days”. Therefore, if an Agency Worker agrees with Raeburn that they are required to work Monday to Friday and they fall sick so that they are unable to work on Tuesday, they will only be able to claim SSP if they remain off work through sickness Tuesday to Friday inclusive.

How long is Statutory Sick Pay Payable For?

Liability for Statutory Sick Pay will end when:

  • The Agency Worker returns to work; 
  • The Agency Worker has received 28 weeks SSP; 
  • The Agency Worker’s contract expires or is brought to an end (for reasons other than avoiding SSP); 
  • The Agency Worker becomes entitled to Statutory Maternity Pay or maternity allowance

 

Does the Agency Worker have to notify the Employment Business of their Absence?

Raeburn request that Agency Workers inform us as soon as possible on the first day of their absence from work to allow us to notify our client.

Is a Doctor’s Note required?

In addition to notifying the Employment Business of their absence, the Agency Worker must provide reasonable evidence of incapacity.

Incapacity for work is defined as being “incapable by reason of some specific disease or bodily or mental disablement, of doing work which he can reasonably be expected to do under the contract”.

During the first seven days of a spell of sickness, an Employment Business cannot insist upon a doctor’s statement. A Self Certification Form is available for Agency Workers to certify themselves as sick for SSP purposes for the first seven days of illness.

Thereafter, an Employment Business can require evidence in the form of a doctor’s statement or a statement of fitness to work (fit note).

Fit Note

On 6 April 2010 the ‘statement of fitness to work’ (also known as a fit note) was introduced to replace the previous ‘Sick Notes’.

The fit note indicates whether:
  • The patient is unfit for work; or 
  • The patient may be fit for some work based on an assessment of their condition and advice and support given to them in order to aid a possible return to work. 
 The fit note cannot be requested until after the Agency Worker has been off absent for 7 days.