The Statutory Sick pay (SSP) system has been broken and urgent reform is needed, warns the CIPD, the professional organization for HR and people development.
The call to Government is laid out in a new report, ‘What should an effective Statutory sick pay system look like?’,, which includes a survey with over 1,000 employers.
Nearly two-thirds of respondents (62%) agree that the SSP rates are too low and should increase. The current UK SSP rate is PS96.35 per semaine for up to 28 week, which is quite low in comparison with other European countries. Even SMEs, who would find it more difficult than larger employers to pay higher SSP costs, support a rate hike (57%).
Covid’s pandemic has made it clear how financially insecure SSP is. Many people are still employed when they are ill, or have to be self-isolated. The CIPD warns that there are growing concerns about the possible impact of Omicron variant on SSP. It is imperative to take steps to ensure SSP offers a better financial safety net.
The report shows that 5.6 million of the 32.5 million-strong UK workforce do not qualify for SSP. The report includes those who are self-employed or have not met the lower earnings limit. To qualify for SSP, an employee must earn at least PS120 per week. SSP is not available to many of the lowest-paid and most vulnerable workers in the country, who are likely to need the most financial assistance.
The CIPD calls for the Government’s to increase the SSP level to at least equal that of someone earning the National Minimum Wage/National Living Wage. If someone is 23 years old or older and works seven hours per days, the pro-rata daily SSP rate for them would be PS62.37.
The CIPD recommends that SSP eligibility be expanded by removing lower earnings limits. Further consultation is also recommended to look at further reform of SSP such as amending rules to allow phased returns to work and removing three qualifying days to pay SSP. It also suggests looking into opportunities to increase income protection for self-employed.
The CIPD calls on employers to create a financial wellness strategy. This includes ensuring that they pay a living wage and making sure that their employees are aware of all benefits available. It also provides information about where to find free, independent money as well as debt advice. Employers should also consider the potential benefits of an occupational sick-pay scheme that will increase employees’ earnings above the statutory minimum.
Rachel Suff is senior employment relations advisor at the CIPD.
“The UK’s SSP system is in disarray for some time, and the pandemic has shown its inability to protect the most vulnerable and lowest-paid members of society. Despite a series of consultations by the government proposing reforms to SSP there are no plans to actually improve the system.
SSP deficiencies can have a severe impact on individuals’ health and well-being, as well as financial distress. It’s more important than ever to have a strong SSP system in place to assist employers in attracting and retaining a diverse workforce.
SSP must not only provide a financial safety net for people who are unable to work due to illness, but it also needs to reflect the current labour market. The government should immediately reform the lower earnings limit and consult with the public about how the system can cover those who are in non-traditional work, including self-employed. People need more flexibility to allow them to return to work in a gradual and sustainable manner. This will increase their chances of a long-term full-time job return.