Head of Legislation and Compliance Cintra HR & Payroll Services
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Coronavirus: Sick pay snafu confuses employers

As coronavirus continues to spread worldwide, employers need to understand how the statutory sick pay (SSP) rules should be applied for employees who are not necessarily sick, but who must self-isolate.

10th Mar 2020
Head of Legislation and Compliance Cintra HR & Payroll Services
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The SSP rules are unclear, and different agencies are publishing confusing guidance in the wake of the coronavirus. It is imperative that payroll professionals and tax advisers get this right, both for employers and employees.

Who pays?

Statutory sick pay (SSP) is a payment that employers are required to make, currently at a rate of £94.25 per week (£95.85 from 6 April 2020). However, the government does not reimburse employers for the cost of paying their employees SSP. Employees must understand that SSP is a cost to the employer.

Some employers may pay company sick pay from day one of sickness (period of incapacity), but SSP is only payable from day four of reported sickness. See below concerning what qualifies as part of the period of incapacity.  

On 4 March 2020, the government announced that SSP would be payable to employees from day one of “sickness” or absence from the workplace. However, until the promised emergency legislation has been enacted there is no requirement for an employer to pay for the first three days of absence. Employers can choose to do so, that would be an entirely voluntary payment of company sick pay, not SSP.

Conditions for payment of SSP

Across the world, people are being told to stay away from work or to self-isolate, but UK employers are refusing to pay SSP unless the employee is physically sick. This is not the correct approach.

Unfortunately, the guidance on gov.uk is misleading, so I have referred to the legislation: 

Tangible sickness

In the first instance, SSP is payable where the sickness is one that is “tangible”, e.g. influenza that prevents an employee performing work under their contract of employment.

Precautionary sickness

Both of the 1982 regulations say that a reason for sickness eligibility is that the absence is for “precautionary or convalescent reasons”. If someone that is registered to give this advice says that someone should refrain from work for these reasons, then they are incapable of performing work under the contract of service and they will be eligible to be considered for SSP.

The 2006 regulations say that the person is eligible to be considered for SSP if the reason for the absence from work is “by reason of his being a carrier, or having been in contact with a case, of a relevant disease”. This is as long as it is the result of “an enactment”, i.e. a piece of legislation. The regulations then prescribe the relevant enactment legislation in each nation of the UK that contains the reasons why individuals must refrain from working.

HMRC’s statutory payments manual

For non-legislative guidance on whether an employee is eligible for SSP, purely as a result of it being a tangible sickness or a precautionary one, see HMRC’s Statutory Payments Manual 1102000.

This says for an employee to be eligible to be considered for SSP, the primary condition is:

“they must be unfit for work under their contract of employment due to physical or mental incapacity, or have been advised to refrain from work for precautionary or convalescent reasons. Or be a carrier of or have been in contact with an infectious or contagious disease and been issued with a statement from the appropriate medical officer advising them not to go to work”.

What employers must do

Employers need to be aware that a person does not have to be physically or tangibly sick to be considered for SSP. A carrier, someone in contact with a carrier or someone who has been advised to refrain from work for precautionary or convalescent reasons can also be considered for SSP.

The employer also has to go through the usual process of considering the length of sickness and the level of earnings.  

Evidence

The SSP rules require that either a fit note or an Allied Health Professional (AHP) report be supplied to the employer if the individual is off work for more than seven days. It may well be that the evidence condition is will be relaxed, as proposals were circulated last year to extend it to 14 days in any event to ease pressure on GPs.

Exclusion form

This is the SSP1 form which employers must complete when they cannot pay SSP, so the employee can claim benefits. There is currently no tick-box to say “the employee had been off less than four days”. However, there will be a new form in due course, but clearly it's not a priority while the rules around SSP are up in the air as they are at present.

Do ensure that you are using the SSP1 form with a reference 01/19 not 10/19.  Employers in Northern Ireland must use the SSP1 form issued by the Department for Communities with a version reference 02/19.

Other situations

The above discussion only deals with the statutory obligation to pay SSP. There are other situations where the employee might not come in to work, or may be asked by their employer to refrain from coming to work. In these instances:

  • If the employee voluntarily chooses not to perform work under their contract of employment, there is no obligation to pay SSP, salary or any occupational sick pay.

But

  • If the employer imposes a restriction on people performing work under their contract of employment, i.e. by asking them not to come into the office, the employer should pay full pay. This would be the same if the employer wanted employees to perform their work under a contract of employment but from home.

Replies (5)

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Nefertiti
By Nefertiti
11th Mar 2020 11:34

The government with its usual don't care attitude announced in the national news that SSP would be payable from Day One without consulting employers or passing any relevant legislation. Needless to say the majority of businesses have a very low opinion of Boris Johnson, the government in general and HMRC in particular. So they are not going to rush like eager beavers to implement this new rule unless forced to do so.

Whilst the majority of employees are reliable, every office has some employees who will not hesitate to take advantage of the CoronaVirus situation and take time off "because they are scared of catching it from other staff members, usually on a Monday morning". It is up to the hapless employer as usual to take on the job of policing this mess on behalf of the government.

What happens to an employee who has taken time off due to this virus situation and then finds he/she can't afford to live on £94.25 per week for two whole weeks and comes back to work early before the incubation period is satisfied?

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By SJH-ADVDIPMA
11th Mar 2020 11:38

Can i self isolate in a public house?

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By turchyna582
11th Mar 2020 11:55

Quote: "or non-legislative guidance on whether an employee is eligible for SSP, purely as a result of it being a tangible sickness or a precautionary one, see HMRC’s Statutory Payments Manual 1102000".
This says for an employee to be eligible to be considered for SSP, the primary condition is:
“they must be unfit for work under their contract of employment due to physical or mental incapacity, or have been advised to refrain from work for precautionary or convalescent reasons. Or be a carrier of or have been in contact with an infectious or contagious disease and been issued with a statement from the appropriate medical officer advising them not to go to work”.

This would suggest that 'self-isolating' by choice is not the result of a statement to do so from an appropriate medical officer. Government and social media hype should not therefore be taken as relevant evidence of advice. In such circumstances then, the employee has freely chosen to be absent from work and is entitled to £Zilch.

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By djtax
11th Mar 2020 15:53

How quickly is payroll software going to cope with the proposed emergency measures for SSP relating to corona Virus? Like most such software ours automatically calculates SSP where applicable and is programmed to disallow the first three days. To apply the new 'day 1' basis presumably I will need updated software. Is the new 'day 1' rule just for Virus related absence or for all SSP - do I need to still apply the usual 'old' rules if eg a staff member is off sick due to say being incapacitated in a car crash rather than due to the virus? What about amending software to reflect the apparent reintroduction of deductabililty of SSP (or is it just virus related SSP?) against overall PAYE/NI paid to HMRC - as announced today if only for max two week absence (if that is that what the Budget said?). I foresee software mayhem....and when is all of this intended to apply - is it with immediate effect now?

Thanks (2)
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By alan.falcondale
13th Mar 2020 09:24

The legislation gives a rolling window of start of incapacity of 54 days(?? needs checking/verifying) so the cumulative number of days off will all count to the first 4 days if they fall within the given window, e.g. being off sick one day of each week would mean the employee would see eligibility (obvs on other factors) for payment starting immediately they were next off (within that rolling window)
The sickness does not need to be the same each time either

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