Even for businesses who don’t offer any company or occupational sick pay, employers know to factor in statutory sick pay (SSP) as a cost for employees who are off sick for more than three days at a time. Statutory sick pay is now at a rate of almost £90 a week, and for small businesses also having to pay inflated costs for temporary cover, it can be a financial challenge.
Previously, a helping hand was available for small businesses, where SSP costs could start to be recovered through a National Insurance deduction when long term sickness absence meant SSP costs reached 13% of the NI bill. However this scheme has now been withdrawn by the government.
Although the claimback scheme wasn’t accessible to many businesses, due to their NI bill being too large, or not having lots of employees off on a long term basis, it did provide a vital life line to tiny employers for whom even one employee off long term sick represented a large proportion of the workforce.
The reason for removing the scheme is apparently partly because the government felt it was a disincentive for small employers to encourage staff back to work. We think that’s nonsense, as given the impact an employee off long term can have on a small business, clearly our small business clients would prefer their employees to be back in the workplace rather than manage the significant disruption both financial and organisational involved in a key staff member being absent.
Small employers already need all the help they can get with the challenges and costs of employing staff, and this change is removing a helping hand from the smallest businesses just when they are at their most vulnerable.
Fortunately, long term sickness absence is fairly uncommon so hopefully it’s not something that will affect many, however it is a wake-up call to manage sickness absence effectively, account for SSP in your budgeting and take whatever steps you can to enable staff to return to work as soon as possible.
If you need help managing sickness absence in your organisation. please contact us at [email protected].