If you have an employee on long term sickness absence there is obviously likely to be a question of a financial impact. Dealing with a loss of pay for very short term absence is obviously more likely to be viable for staff, but when absence is extended this causes a significant problem for most families.
But what are your options as a small employer to support valued employees who are suffering longer-term ill health?
Enhanced sick pay
Many employers offer enhanced sick pay arrangements, providing for perhaps a period of time on full pay, then a period on half pay, then statutory only. This type of arrangement can obviously be enormously supportive to those on longer-term absence, but there are also problems with it.
Most SMEs would find the kind of scheme which would offer a decent level of financial support to long-term absentees to be unaffordable. While many small employers offer limited enhancements, they wouldn’t usually make any kind of dent in the kind of financial losses involved in long-term absence from work.
There are also concerns that sick pay schemes which offer long periods on full or half pay can be open to abuse, and make it too easy for staff to take time off work without a disincentive to do so. It’s difficult to offer enhanced pay to those with significant long-term conditions without also offering it to those who take lots of short term absences.
Some employers make enhanced payments to long-term absentees on a purely discretionary case-by-case basis. This has the advantage of enabling the business to support valued employees who are suffering serious illness but without committing the employer to a restrictive and expensive formal enhanced sick pay scheme.
It is important to be careful this doesn’t become a standard arrangement by default, by making sure discretion is genuinely used and each case considered on an individual basis. As with other decision-making around employment issues where there aren’t set criteria, you must be careful you are not discriminating on a direct or indirect basis.
Statutory sick pay only
The reality in most small businesses is that long-term absentees will be on statutory sick pay only. Statutory sick pay (SSP) is a fixed amount, currently £89.35 a week, and starts after the first three days absence. Employees on long-term sickness absence can get SSP for a maximum of 28 weeks.
Unlike other statutory payments such as maternity pay, there is no ability for employers to claim back any portion of SSP from the government, you have to fund this yourself, while of course possibly having to pay for cover for your absent employee.
After SSP ends
Once you get near the end of the 28 weeks of SSP for an absent team member you will need to complete form SSP1, notifying your employee that their entitlement is ending. This form will enable them to claim government help for those unfit for work on a long term basis.
Paid annual leave
Employees continue to accrue holiday while they are off sick and one option for easing the financial burden is taking some of this holiday entitlement while they are absent. This can provide them with a period of time on full pay, however you cannot force an employee to do this.
Many employers offer insurance arrangements to assist employees who are unable to work on a long term basis for ill-health reasons. This can be a way of supporting those employees without also having to pay enhanced sick pay to all staff. Permanent health insurance (PHI) offers financial support to employees who are unable to return to work. Normally the employee has to remain- on the books’ and the benefit pays out until the employee’s death, retirement or return to work, whichever comes first.
Critical illness cover is slightly different in that it pays out specific amounts for set medical conditions, such as cancer, heart attack, stroke or other serious illnesses. Many employers also offer life assurance or death in service benefits which may become relevant.
When considering options for the various insurances you could offer, make sure you are very clear about the terms and conditions of the schemes you are looking into, and the impact on your decision-making in the event you for example have an employee receiving PHI benefit long-term and needing to remain an employee in order to do so.
Other help you could offer
There are also times when a small employer might on a discretionary, individual basis, help with financing treatments which might otherwise involve a long waiting list, or funding second opinions with private medical professionals where a situation means this would be beneficial. This type of arrangement is actually easier in a small business than a larger organisation where there might be a concern about setting a precedent, with long term absence being more common due to the size of the workforce.
If you’d like some advice about financial help for long-term absent employees and the various implications and options, do get in touch.