Sick Pay Guide for Employers

Specific employments

Casual employees

A casual employee is usually someone who works for somebody else as and when they are required under a contract of employment with that person for the period when they are working.

For example, this could be a single shift or for a week at a time, or they may be employed on a series of short contracts over a longer period. All casual employees are entitled to SSP, if they satisfy the normal conditions, for the period of their contract of service. However, there must be enough days left in the contract for a PIW to exist and for any waiting days before SSP is payable.

Linking short contracts of employment

If an employee has worked for you on a series of short contracts and these accumulate, so they have worked for more than one month, you will need to check whether their contract is treated as continuing under Section 86 of the Employment Rights Act 1996. This gives short contract employees who regularly work for the same employer additional rights such as a right to notice of termination of their contract.

For example, a casual employee has worked for you on a weekly contract 14 weeks out of the last 16 weeks. You normally tell them on a Thursday if they are needed the following Monday but they go sick on a Wednesday and are unable to work for you for the rest of that week and the following three weeks. As they have worked for you regularly their contract may be treated as continuing under employment law and you will have to consider their entitlement to SSP for the period of their sickness. If their contract of employment is to be treated as continuing and they satisfy the other conditions for entitlement, you must pay them SSP for the three weeks of incapacity, after taking into account their three waiting days.

Your liability to pay SSP will continue even after you terminate their contract, if you do so wholly or mainly to avoid paying SSP.

Agency workers

By ‘agency worker’ we mean someone who is engaged by a recruitment agency to work for another person under a contract or other arrangement between the agency and that other person. Although they are not employed under a contract of service, they are treated as employees of the agency for National Insurance purposes. This is under the provisions of Paragraph 2 of Part 1 of Schedule 1 to the Social Security (Categorisation of Earners) Regulations 1978. Class 1 NICs are due on their earnings and the agency is the liable secondary employer.

For SSP purposes, the worker is deemed to have a contract of service with the agency for the period of the assignment. The deemed contract is considered to start on the date an assignment is offered to the worker and end on the last day of the assignment. Subsequent assignments will give rise to new deemed contracts of service and may give rise to a series of linked contracts.

This means that an agency worker may be entitled to SSP if they satisfy certain conditions but if their contract with the employment agency is for a specified period of three calendar months or less at the start of the PIW they are not entitled to SSP. However, they can become entitled to SSP if, in a single contract:

  • the employee works longer than the original period so that the total period actually worked becomes more than 13 weeks, or
  • the contract is extended for more than three months.

An agency worker can also become entitled to SSP if two or more contracts are separated by eight weeks (56 days) or less and:

  • the total length of the contract is more than three months
  • the total period actually worked becomes more than 13 weeks, or
  • the contract is extended so that the contract runs for more than three months
  • the first day of sickness must be a day they would have worked on an assignment.

Where a worker first falls sick between two assignments, then SSP entitlement cannot arise. However, if they fall sick during one assignment and they have already been offered work, then the entitlement to SSP continues into the later assignment.

The sick worker’s entitlement to SSP continues until the earlier of:

  • their becoming fit for work, or
  • the date the original assignment, or series of agreed assignments, would have ended.


Mariners are covered by the SSP scheme if they are:

  • employed on a British registered ship, or
  • their contract was entered into in the United Kingdom (UK) and the person paying the mariners’ earnings or the owner of the vessel has a place of business in Great Britain (GB).

Foreign-going mariners

Mariners are not covered by the SSP scheme if they:

  • are employed on board a foreign-going ship and their earnings are paid exclusively for that employment, or
  • are employed partly on a foreign-going ship and partly elsewhere and the earnings for the employment on the foreign-going ship are paid during that employment, or
  • have been employed on a foreign-going ship within the last 13 weeks, and
    • remain employed by the same employer, and
    • are not employed by anybody on terms which would stop them returning to their employment on the foreign-going ship within 13 weeks of leaving it.

Employers of foreign-going mariners pay a special rate of NICs, details of these rates can be found in CA42 Foreign-Going Mariner’s and Deep Sea Fisherman’s contributions for employers.

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 HMRC Employer Helpline on 08457 143 143.

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