Sick Pay guide for Employers

Keeping records and end of tax year

Statutory Sick Pay

Opting out from operating Statutory Sick Pay
You can choose whether or not to operate the rules of the Statutory Sick Pay scheme as long as you pay contractual pay to your employees at, or above, the Statutory Sick Pay rate for each day of sick absence where the employee has entitlement.

If you choose this option, you still need to operate some of the Statutory Sick Pay rules because your employees keep their entitlement to Statutory Sick Pay. For example, if the employee is sick for 28 weeks you still need to issue form Statutory Sick Pay1 so that they can claim IB from their Jobcentre Plus or social security office. See below for more.

Records you must keep

Employers must keep records of

• all dates of employee sickness lasting for four or more days in a row
• all payments of Statutory Sick Pay you make during each PIW. But see below if you have opted out of fully operating the Statutory Sick Pay rules

so that the Inland Revenue can check that your employees are receiving their proper Statutory Sick Pay entitlement.

Employers who choose to opt out
Employers who have chosen to opt out of fully operating the Statutory Sick Pay scheme must still keep records of

• all dates of employee sickness lasting for four or more days in a row and
• all payments of earnings or occupational sick pay (OSP) you make during each PIW e.g. your normal pay or OSP records

so that the Inland Revenue can check that your employees are receiving their proper Statutory Sick Pay entitlement or the equivalent in earnings.

All employers
You are required to keep enough records to complete

• form Statutory Sick Pay1, or your own computerised version, so that your employee can claim IB, for example, when they have received, or would have if you had not opted out of fully operating the Statutory Sick Pay scheme, the maximum 28 weeks' Statutory Sick Pay, or
• form Statutory Sick Pay1(L) Leavers form if asked for by the employee. They can then give it to their new employer or to their Jobcentre Plus to get benefit, if they leave your employment within 8 weeks of their last entitlement to Statutory Sick Pay from you.

You need to record the following details on the leavers form

• the first day for which Statutory Sick Pay liability arose
• the last day for which Statutory Sick Pay liability with you arose
• the number of weeks and days of Statutory Sick Pay entitlement
• the days of the week that are Statutory Sick Pay qualifying days.

All Statutory Sick Pay that you pay must be included in gross pay. Any deductions you can lawfully make from pay can also be made from Statutory Sick Pay.