Statutory Sick Pay – jargon buster
16 March 2020
We await updates to legislation and employer guidance that will bring about temporary changes to legislation in response to the Coronavirus (COVID-19).
Statutory Sick Pay was introduced in the early 1980s in a bid to reduce the cost to the Benefits System of sick pay, and encourage employers to manage staff absence due to sickness more effectively. Since its introduction, one of its key features is the dominance of jargon.
Initially funded by the Government by an offset to the remittances that were to be paid over by the employer, when the Percentage Threshold Scheme came to an end from 2014 SSP became a wholly funded employer cost.
Some of the more commonly used ‘jargon’ relating to the operation of SSP:
The Period of Incapacity for Work (PIW)
The starting point for SSP to be considered is the PIW, which means that the employee must be incapacitated for a period of not less than four consecutive calendar days. These days do not need to be working days. This is referred to as a ‘Period of Incapacity for Work’ (PIW).
Qualifying Days
If a PIW has been formed, SSP is payable in respect of Qualifying Days (QDs).
A Qualifying Day is a day of the week:
- on which the employee is required by the contract of employment to be available for work, or
- chosen to reflect the terms of that contract, or
- such day(s) as may be agreed between the employee and the employer.
The Statutory Sick Pay (General) Regulations 1982 state that there must be one qualifying day in each week (a week is a continuous period of seven days beginning on a Sunday) and in the absence of agreement it is a Wednesday.
Waiting Days
Only QDs can be Waiting Days.
SSP is not payable in respect of the first three QDs in a PIW. These first three days are called Waiting Days (WDs). (It is this area that is expected to see temporary legislation to bring about change due to the Coronavirus COVID-19).
Although all days may be included when determining whether a PIW has been formed, only QDs can count as Waiting Days. Waiting Days only need to be served once in a PIW or series of linked PIWs.
Linking
Any two PIWs that are separated by up to and including 56 calendar days ‘link’ and are effectively treated as parts of the same period of incapacity for SSP purposes.
However, a PIW must be formed every time in order for linking to occur. A period of less than four continuous calendar days of incapacity is not a PIW and therefore cannot link with any other period of incapacity.
Rate of SSP
The current weekly rate of SSP is £94.25 (2019-20) increasing to £95.85 (2020-21). Daily rates, based on the number of qualifying days, are available on GOV.UK.