How will reforms to statutory sick pay affect HR departments?

The Government has proposed a consultation to discuss decreasing the threshold of eligibility for Statutory Sick Pay (SSP). This could see an addition of two million people to the SSP as well as adding to the workload of HR departments.

Today (15th July 2019), Work and Pensions Secretary, Amber Rudd, and Health Secretary, Matt Hancock, have proposed new measures to ensure that, for the first time, the lowest paid staff are eligible for statutory sick pay.

Jonathan Richards, CEO at Breathe, a HR software provider, said:

It’s encouraging to see there’s movement and discussion around making SSP accessible to employees on low incomes. 

However, with this threshold lowering, the increase in associated admin will undoubtedly have significant impacts on a business. Not only will there be a heightened need for calculating the cost of these absences but the resulting paperwork will increase workloads on HR departments too.

As such, it’s important that businesses turn their attention to their HR management tools which will become more necessary if legislation like this comes to pass. There’s technology out there which will aid with SSP calculations themselves and it’s definitely worth investing in tools that will accurately track sickness and absence more generally. This will enable business owners to calculate the business cost of employee absences due to illness.

Currently, the SSP stands at £94.25 a week for a maximum of 28 weeks. It is only eligible for those who work at least 14 hours on minimum wage, earning an average of at least £118 a week.

However, this arrangement currently excludes part-time workers who work less than 14 hours a week and those on freelance contracts.

This consultation comes after a report was issued by the Department for Work and Pensions about the rate of sickness within the workplace. Of those who have a long-term sick absence (LTSA) that lasts longer than a year, almost half (44 per cent) do not return to work. Each year, over 100,000 people leave work following an LTSA.

In order to combat this, part of the consultation will involve asking health providers and businesses to offer advice on how to deal with barriers that prevent employers from retaining sick staff. Such as time and money.

Part of this includes small businesses being given a sick pay rebate which would be given to those who effectively manage employees on sick leave and assist them in returning to their role.

Alan Price, CEO and HR expert at HR software firm BrightHR, said:

Although the small business rebate mooted by the Government is good news, there will be a large proportion of employers in the UK who will have to find another way of funding the extra outlay. In order to mitigate the cost, employers may well focus more of their resources on working with individual employees to help them get back to work. It’s never too early to get hold of the situation; more and more employers are offering assistance from the first day of absence.

Additionally, as evidence has shown, early intervention by an employer is the most effective in reducing the number of people who leave after an LTSA.  The Government is also considering changing legal guidelines. This would see senior staff offering support earlier: such as flexible working hours and keeping in contact with employees when they begin their long-term sick absence.