The CIPD - the professional body for HR and people development - has released a new report entitled “What should an effective sick pay system look like?” which claims the UK’s Statutory Sick Pay (SSP) system is “broken” and examines what reforms are needed.
SSP was introduced in 1983 to provide a pay to employees unable to work due to short-term illness and in 1986 an employers’ liability to pay SSP was extended from eight weeks to 28 weeks of sickness absence in each tax year.
In 1991, the rate of SSP that an employer could claim in reimbursement was lowered to 80% and in 1994 it was abolished for all but small employers.
The eligibility criteria for SSP payments are that an individual must be an ‘employee’ or agency worker, earn on average at least £120 per week and have been ill or self-isolating for at least seven consecutive days. From the fourth day of sickness, SSP is paid at the rate of £96.35 per week (for April 2021 to April 2022) for a maximum of 28 weeks but this is raised annually every April.
To compile its report, the CIPD surveyed a sample of employers in its regular Labour Market Outlook survey, then consulted a range of stakeholders including HR directors, lawyers and policy experts through a CIPD Policy Forum roundtable.
Of the 1,000 employers surveyed by the CIPD, nearly two thirds (62%) think the UK’s current statutory sick pay (SSP) rate of £96.35 per week is too low and should be increased – with 57% of small companies agreeing. In response, the CIPD has suggested the government raise the amount of SSP to the same as the national minimum wage or national living wage. For example, for someone aged 23 or over this would be £62.37 a day.
Additionally, the COVID-19 pandemic has highlighted those that are unable to access the scheme. The self-employed and those earning less than £120 a week do not qualify and these equate to around 5.6 million people, or 17.2% of the workforce. The CIPD suggests there is therefore a need for the self-employed to contribute to some form of income replacement support that they can benefit from when sick.
Rachel Suff, senior employment relations adviser at the CIPD, stated:
“The UK’s SSP system has been broken for a long time and the pandemic has only highlighted its failure to protect the lowest paid and most vulnerable members of our society.”
The CIPD’s recommendations based on the survey results are that the UK Government extend protection to those on the lowest incomes and act now to expand eligibility for SSP by abolishing the lower earnings limit (LEL) and the level of SSP is raised to be closer to the equivalent of someone earning the National Minimum Wage/National Living Wage (based on a pro rata daily rate covering time taken off work sick, for example, this would mean that if someone aged 23 or above normally works seven hours per day, their pro rata daily SSP rate would be £62.37 (7 x £8.91).
