Employer Handbook for Statutory Sick Pay

Terms Used in this Guide

Statutory Sick Pay (SSP)

A measure of earnings replacement for employees who are off work because of sickness. Employers are liable to pay this to all their employees who satisfy all the qualifying conditions when they are off work sick.

Employee

For Statutory Sick Pay purposes an employee is a person whose earnings attract a liability for employer’s secondary Class 1 National Insurance contributions (NICs), or would but for the person’s age or level of their earnings.

Employees include office holders, for example police officers, Members of Parliament, the judiciary and some company directors.

People who are classed as employed earners, for example, agency workers are also employees for SSP.

A person who does not have an employer in the UK that is liable to pay secondary Class 1 NICs on their earnings (for example some people who work in embassies) may pay voluntary employee Class 1 NICs. Such a person is not an employee for SSP purposes.

Employer

An employer is whoever is liable to pay the employer’s secondary Class 1 NICs, or would be but for the employee’s age or level of earnings. For SSP purposes,if you have to pay employer’s secondary Class 1 NICs for your employees, or would but for their age or level of earnings and they satisfy all the qualifying conditions for SSP, then you will be responsible for making the SSP payment.

If you are not sure who is an employee and who is an employer for SSP contact the Employer Helpline on 08457 143 143.

Period of Incapacity for Work (PIW)

A period of sickness lasting at least four or more days in a row. All days of sickness count towards the total number of days in a PIW, even non-working days. If there are less than four consecutive days there is no PIW and you need take no action. To check if an employee’s PIW links with a previous PIW, see Tables for linking Periods of Incapacity for Work for SSP.

Lower Earnings Limit (LEL)

This is the minimum level of earnings that employees need to qualify for statutory payments such as SSP. It is also the minimum level that an employee’s Average Weekly Earnings (AWE) must reach in a specific period for them to get SSP. See Has your employee earned enough in the relevant period? to work out AWE. For 2010–11 the LEL is £97.00 weekly.

Qualifying Days (QDs)

These are the only days you can:

• pay SSP for, and
• count as Waiting Days (WDs).

They are usually the days of the week your employee normally works; their contracted working days.

You can decide not to use the contracted working days if, for example, your workforce operates a varied or alternative working pattern each week. For simplicity you may want to have the same days each week as the QDs, but you must first reach agreement with your workforce or their representative(s) about which days will be QDs. You cannot use different QDs than the actual work pattern without agreement with your employees.

There must be at least one QD in each week running from Sunday to Saturday. Bank Holidays and other non-working days do not alter the normal pattern of QDs.

Waiting Days (WDs)

SSP is not payable for the first three QDs in a PIW. These are called Waiting Days (WDs). They are not always the first three days of sickness as the employee may have been sick on non-QDs. Where PIWs are linked and all three WDs have been served in the first PIW, there will be no WDs in any later linked spells of sickness. But, if all three WDs have not been served in the first PIW, any remaining WDs must be served at the beginning of the next linked PIW or series of linked PIWs.

Normal payday

Regulations define a "normal payday as either the payday specified in the contract, or the day on which the employee is usually paid if they have no contract or their contract does not specify a payday".

Linking

Periods of Incapacity for Work (PIWs) are linked and treated as one PIW if the gap between them is eight weeks or less. Any subsequent spells of sickness must be four or more days in a row to form another PIW,otherwise there is no subsequent PIW to link with an earlier PIW. Tables for linking Periods of Incapacity for Work for SSP will help you decide if PIWs are linked.

Linking letters

Jobcentre Plus or in Northern Ireland the Jobs and benefits Office give these forms to people who have recently received benefit. You will need to ask any new employee’s who go sick for four or more days in a row in the first 104 weeks after they start, or return to work for you, if they were given one of these forms.

If they say they do not have one of these forms but you think they may have been getting IB/ESA from the Department for Work and Pensions (DWP) in the last 104 weeks, you can check with your local Jobcentre Plus or in northern Ireland the Jobs and Benefits Office to see if they are entitled to receive IB/ESA.

Employment and Support Allowance (ESA)

Employment and Support Allowance is a Social Security Benefit that replaced Incapacity Benefit, Income Support and Severe Disability Allowance, that is paid because of an illness or disability for new claimants from 27 October 2008.

Occupational Sick Pay (OSP)

You can choose to opt out of fully operating the SSP Scheme in favour of your own Occupational Sick Pay (OSP), see Operating your own Occupational Sick Pay (OSP) Scheme. You must also still maintain records of sickness. See What records you must keep.

Percentage Threshold Scheme (PTS)

The scheme under which you may be able to recover some, or all, of the SSP you have paid to your employees in a tax month. See Recovering SSP for more information.

Week

For working out SSP entitlement and payment, a week is a period of seven days starting on Sunday and ending on Saturday.

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