Statutory Sick Pay Guide for Employers (2011-2012)

Example - Weekly paid employee

This Sick Pay Guide is reference only. For the most up-to-date advice see the Statutory Sick Pay Guide for Employers (2012-2013)

Operating the SSP Scheme

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 at www.acas.org.uk or phone 08457 47 47 47 or in Northern Ireland contact the LRA at www.lra.org.uk

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 1 NICs from the worker’s earnings, contact the Employer Helpline on 08457 143 143. If you are not sure whether a casual employee is employed by you under a contract of employment, contact Acas at www.acas.org.uk or phone 08457 47 47 47 or in Northern Ireland contact the LRA at www.lra.org.uk

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 the Employer Helpline on 08457 143 143.

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
  • 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 at www.acas.org.uk or phone 08457 47 47 47 or in Northern Ireland contact the LRA at www.lra.org.uk

Mariners

Mariners can get SSP if they or their employer have a place of business in the UK and they are liable to pay Class 1 NICs, or would be if their earnings are high enough.

If you are not sure if the above applies, contact 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.

Educational term-time workers

Employees of educational establishments including teachers, classroom assistants, college lecturers, child nursery workers, school bus drivers and kitchen staff may or may not be contracted to work outside of term-times.

Entitlement to SSP depends on the type of contract you have with your employee.

No contract outside of term-times

Where a term-time worker becomes sick outside of their contract, for example, during school holidays, then there will be no entitlement to SSP, as they are not an employee during those weeks. Issue a form SSP1, to notify your employee that you will not be paying them SSP because their contract has expired.

Contract ends and new contract starts

Where an employee is already entitled to SSP during a contract, entitlement will cease at the end of that contract. Issue form SSP1 notifying your employee that you will not be paying them SSP beyond the date that their contract expired. If the first day of their PIW is when their new contract would have started, issue form SSP1 to notify your employee that you will not be paying them SSP because they have not done any work under that contract.

If the first day of the PIW is between contracts, issue form SSP1 to notify your employee that you will not be paying them SSP as they have not yet started work for you.

If the employee signs a new contract, for example, at the start of a new term, entitlement to SSP will only apply when they have done some work under the new contract.

Contract ongoing between term times

Where a contract is ongoing between term times, any entitlement to SSP will continue during and after the holiday periods until the end of the PIW or until the contract ends, whichever is the sooner. Where the first day of the PIW is during a holiday period, entitlement to SSP would only apply if your employee is required to work during the term-time breaks.

If your employee is not required to work during the holiday period, then any PIW commencing during a holiday period would not attract entitlement to SSP. An example letter is on page 22, which you can use to notify your employee that they are not entitled to SSP, because the first day of their PIW is during the holiday period when they are not required to work.

There are some examples of how to work out AWE for these workers on the Learning Zone of Basic PAYE Tools.

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 Team who will advise you how to handle paying your employee’s SSP.

Statutory Sick Pay Guide © Crown Copyright 2011

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