Employer Handbook for Statutory Sick Pay

Specific employments

There are different rules for casual (or short contract) employees and agency workers. If you are not sure whether a worker is employed by you as a casual employee or is an agency worker, contact Acas or phone 08457 47 47 47 or in Northern Ireland contact the LRA.

Casual employees

A casual employee is usually someone who works for an employer, as and when they are required on a series of short contracts of employment with that person.Such casual workers may also be called short contract employees. If you have to deduct PAYE tax and Class 1 NICs from the worker's earnings , then you will have to pay them SSP if they satisfy all the qualifying conditions. If you are not sure whether you have to deduct PAYE tax and Class 1NICs from the worker's earnings, contact your HMRC office.If you are not sure whether a casual employee is employed by you under a contract of employment, contact Acas or phone 08457 47 47 47 or in Northern Ireland contact the LRA.

Agency workers

The term 'agency' refers to all types of businesses that provide employers with temporary workers. An 'agency worker' is someone who is engaged by an agency and is paid by, or through, them (other than under a contract of employment), to work under the direction and control of another employment provider. A fee must be paid in respect of the ongoing employment of that worker.

The above definition does not include cases where:

• the worker is directly employed by an agency under a contract of employment whether or not the worker is sent to carry out work on a client’s premises. In these cases they are employees of the agency
• an agency finds a worker employment with a client for a fee and there is no continuing link between that employee and the agency. The worker will be the employee of the client company.

Although agency workers are not employed under a' contract of service', they are deemed to have a contract of service with the agency for the period of their assignment. Subsequent assignments will give rise to new deemed contracts of service or series of linked contracts. Agency workers are treated as employees for PAYE tax and Class 1 NICs. If you are required to deduct PAYE tax and Class 1 NICs from the agency worker’s earnings, or would do if their earnings were high enough, then you will have to pay them SSP in the same way as an employee, if they satisfy the qualifying conditions. If you are not sure whether you have to deduct PAYE tax and Class 1 NICs from the agency worker’s earnings contact your local HMRC office.

An agency worker is entitled to SSP from the first day of their contract provided they satisfy all the other conditions for entitlement. However, they must have undertaken some work under that contract to become entitled.

Entitlement to SSP will cease at:

• the end of the PIW, or
• the end of the current contract or assignment with the client company, or Employer Helpbook E14(2010)
• where a future contract, placement or assignment had already been agreed, the end of that future contract,placement or assignment.

It is illegal to terminate an employee’s contract solely or mainly for the purpose of avoiding liability for SSP. Where an assignment has ended and the agency worker subsequently goes sick they will not be entitled to SSP from you.

Linking periods of incapacity for work – SSP will be payable across two or more contracts where there is a linking Period of Incapacity for Work if:

• the worker was sick for four or more days in the first contract, and
• they have started work on a second or subsequent contract, and
• they were sick again within eight weeks of the last PIW.

Provided all the conditions are satisfied, the normal eight week linking rule applies and any Waiting Days served in the previous contract will count for the subsequent contract Similarly, any payments made in the previous period will count towards the workers maximum payment of SSP. If you are not sure whether a worker is employed by you under a contract of employment or is an 'agency worker', contact Acas or phone 08457 47 47 47 or in Northern Ireland contact the LRA

Mariners

Mariners can get SSP if they or their employer have a place of business in the UK and they are on a home-trade ship.

If you are not sure if the above applies, contact your local HMRC office, or ring the Employer Helpline on 08457 143 143.

Your employee has two contracts

It is possible for an employee who has two distinct contracts, with the same or different employers, to be incapable of work under one contract but capable of working under the other.

When an employee has more than one contract with the same, or different employers trading in association, and their earnings are aggregated for NICs purposes, they must be incapable of work under all contracts before they can be entitled to SSP.

NHS employees

Some NHS employees whose contracts are split between Strategic Health Authorities and NHS Trusts as a result of NHS re-organisation, can choose to have all their earnings added together for working out AWE for SSP purposes. For more information please contact the Employer Helpline on 08457 143 143.

People unable to act for themselves

If an employee is mentally incapable of acting for themself and you are unsure about who should be paid the SSP, contact the Employer Helpline and explain the situation. They will be able to give you advice and/or direct your enquiry to the Statutory Payments Disputes Office who will advise you how to handle paying your employee’s SSP.

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