STATUTORY SICK PAY - WHO PAYS THE COST?
Previously, employers could reclaim that amount of Statutory Sick Pay (SSP) which exceeded 13% of its national insurance contributions in a month. Government thinking would appear to be that this gave some incentive to employers not to encourage long-term sick employees to return to the workplace. The Government has therefore decided that with effect from 6th April 2014 it is not longer possible to recover SSP. This leaves employers wholly responsible for funding sick pay paid to absent employees, in the hope that employers will try and encourage those on sick back to work.
A quick dip into the arithmetic, rather defeats the Governments thinking. In one worked example, we have calculated absence rates need to be in excess of 10% for any SSP to exceed 13% of NI Contributions. In such circumstances the cost of SSP is not the driver to reduce absenteeism but is the impact of the absenteeism itself.
By abolishing the above, the Government estimate they will save about £50m a year, and this sum will be put towards the new Health & Work Service, due to start in 2015. The Health and Work Service scheme is to provide free Occupational Health Assessments for employees who are off sick for 4 weeks or more. It will also provide a website and a helpline giving information and advice. The aim is to help employees and employers put together plans to facilitate a return to work; ideally trying to reduce the number of people who are absent from work on long term sick.
There are a lot or unanswered questions at present about how this scheme is going to work, and how beneficial it is going to be. What we do know is that the employee can be referred by their GP or by the employer (if the GP has not made a referral) but curiously, the service is envisaged to be by telephone with only minimum face to face assessments being carried out. This raises a concern about whether the assessment is going to comprise nothing more than a regurgitation of what the employee has told them. Only time will tell.
When we learn more about the scheme, we’ll let you know.
Absenteeism can be a problem, but before dismissing an employee on grounds of absenteeism / capability (sickness or injury related), specialist advice should always be sought. This is always available to our ongoing clients with an HR support package in place and will be essential for those who also have the benefit of legal expenses insurance. If you do not have this support and cover in place then please do feel able to contact us for an opinion if you have any absence management issues affecting your business.