Another benefit that most employees look forward to while applying for a job is the provisions of sick pay by the employer. A lot of employees tend to miss work due to various illnesses (about 4% of total work time as per a research by CBI 2000), and a sick pay can encourage the employee to put in more efforts for the day lost. No person intentionally wants to miss work until he/she is severely ill that makes them incapable of doing their job. But if they get the pay in spite of losing days of work, it motivates them to work better for the company. Sick pay is a necessary requirement in almost all the organizations to let employees feel that their employer actually does care for them. It is basically divided into Statutory Sick Pay (SSP) and Occupational Sick Pay (OSP) and since 1983; the employer had to take care of both. As a result, sick pay also became a part of the HR department and was added to the benefits of employees.
Statutory Sick Pay
Statutory Sick Pay is a provision brought forward by the government where an employee gets paid onlywhen he/she is unable to work due to any illness. The employer is liable to pay the amount (£64.35 per week in 2004) only if the employee qualifies for it. The qualification is based on the regulations set up by the government, and the employee gets the benefit in his/her monthly payroll. Another way to explain this is the employee does not lose salary if he/she cannot do the office work on account of any illness.
The 1990s saw a lot of changes being made in the company policies for the employees and therefore in the year 1994, the employers were required to take the responsibility of sick leaves. According to SSP, the employer has to pay the employee in full for the initial 28 days of absence. After 4 weeks, if the employee continues to be absent, the company can claim back a part of the expenses from the government. Due to several changes being made in the state regulations since then, the methods of calculation depends on a number of factors. As every employee is entitled to state sick pay; however, certain groups of employees cannot claim from the Benefits Agency. The group includes self-employed people, employees who fall ill outside the EU, part-time employees who earn around £77 per week (in 2004), workers who are sick during an industrial dispute and staff who have crossed the pensionable age. The capacity to claim returns is also different according to the size of the firm. The small employers are entitled to claim more than the large organizations from the national insurance contributions. This is because the small businesses have fewer sources whereas the large firms are financially more stable.
Different criteria together make up the provisions and regulations of SSP. The employee who is on a sick leave needs to know about the following before asking for sick pay.
Qualifying days: The employee is entitled to sick pay only for the qualifying days. This includes those days that the employee usually works but did not as a result of illness. Generally, a working week is calculated from Monday to Friday, but the qualifying days for a person who works rotational shifts are different. Hence, the calculations need to be made carefully keeping these factors in mind.
Waiting days: These include the three days that the employee has been away from work due to illness. These are the qualifying days, and the person gets the sickness benefit on the fourth qualifying day while he/she is still on a sick leave.
Certification: An employee who has missed work for 7 consecutive days on account of sickness needs to present a certificate from the doctor. If he/she is able to join work before 7 days, he/she can inform the employer about the sickness on the fourth qualifying day, i.e., the day the employee is entitled to receive the benefits.
Linked period: The concept of linked payment is a little tricky. If an employee has missed work a few times due to illness (known as the period of incapacity from work, PIW) within the 8 previous weeks, then the missed work days are combined into one. This means that three waiting days need not be applied every time the employee loses work within an 8-week period. In simple words, as long as there is a gap of only eight weeks between sick leaves, the three waiting days are not applicable and is treated as one period to get the SSP benefits. But if he/she does not take many sick leaves within an 8-week period, the two leaves will not be combined into a single period.
Department of work and pensions (DWP): The DWP is a state-run statutory body that takes care of work-related issues. It requires the employers to keep a record of the SSP for 3 years so that they can be reviewed when the need arises.
The employer pays for SSP to a sick employee for a period of up to 28 weeks. If the employee continues to be absent at work due to sickness for a period of more than 28 weeks, the responsibility of payment moves from the employer to the government.
Occupational sick pay
The occupational sick pay (OSP) depends on the contract of employment and the terms of service of an employee. The OSP is an addition to the SSP where the employers continue to pay for sick leaves even after 28 weeks. The general way how OSP works is that the employer pays the full salary for a period of time. Other ways involve paying the salary after making deductions of the days taken as sick leaves. The employees who work in public sector organization or trade unions benefit more from the OSP as do the professionals and managers in large organizations.
Therefore, the conventional approach that employers follow is to pay the full salary for first 6 months of illness, then paying half for the next 6 months after which the OSP finishes. This, however, is applicable to the employees who have completed 3 years of service with the concerned employer. Another approach that businesses follow is to settle with a fixed rate over and above the SSP. It is easy to calculate the pay for the employees who have a basic salary with no additional benefits. But the employees who work rotational shifts are entitled to bonuses, and thus, the pay for their OSP needs to be calculated accordingly. Other employers just pay the SSP according to the regulations of the state and feel the occupational sick pay is an unworthy benefit. In most cases, the employers pay in excess than the statutory minimum. However, they can reclaim the amount from the state later.
As explained earlier, the amount paid in OSP is also dependent on the term of employment service. Some employers offer sick payments from the first day of work (SSP) while others generally wait for a minimum of 1 month, 3 months or even 1 year according to the company policies and procedures. Therefore occupational sick pay is the amount an employer pays in addition to the SSP when you cannot work on account of any illness.