Could now be the time to reform sick pay in the UK?
Recent calls to reform statutory sick pay
The Institute for Public Policy Research (IPPR) published a report in February 2022, which identifies significant variances in access to Statutory Sick Pay (SSP) between different sections of the population.
The report makes recommendations to improve access to sick pay, as well as to encourage health at work more generally. It was published against a backdrop of increased interest in wellbeing in the workplace stimulated, at least in part, by the Covid-19 pandemic.
What are the current rules on Statutory Sick Pay?
As a minimum, an employer must pay its employees £99.35 per week SSP for up to 28 weeks if they are too unwell to work. Many employers already offer more than this.
To qualify for SSP, the individual must:
• be classed as an employee and have done some work for their employer;
• earn an average of at least £123 per week; and
• have been ill for at least four days in a row (which can include non-working days).
For SSP purposes, an employee includes anyone whose earnings are liable for Class 1 National Insurance contributions.
Employees only receive SSP from day four of being off sick.
What does the IPPR report say?
The report focuses on variations in access to sick pay in the UK, particularly across different societal groups.
Many people in the UK are not able to access SSP and the report found that some of society’s most vulnerable groups are more likely to be negatively impacted by this.
The findings reveal, for example, that households with an income below £25,000 are around twice as likely to lack access to SSP compared to households whose income exceeds £75,000.
The IPPR also found significant discrepancies in access along age and race lines. The report found that workers are less likely to have access to basic sick pay as they get older, with workers aged 65 and over being five times more likely to lack access compared to workers aged between 25 and 44.
The report also highlighted differences in access based on race, with South Asians being 40% more likely to lack access to this sick pay than White British and Black workers.
What reforms does the IPPR report suggest?
The IPPR advocates the improvement of access to paid sick leave to be made a policy priority and makes several recommendations including:
• increasing SSP to 80% of earnings, up to a limit, and abolishing the lower earnings threshold of £123 per week; and
• reinstating the pandemic-era policy of paying SSP from day one of illness, rather than only from the fourth day of illness, and for this to apply to all illnesses – not just Covid-19.
In addition, the report makes broader recommendations for the improvement of work-related health, recognising the complex relationship between health and other aspects of working life, such as macroeconomic policy, income and job security. Its proposals include raising the national minimum wage to meet the living wage, improvements in job security and a shorter working week.
What can employers do?
The report makes clear that employers have a role to play in rethinking the post-pandemic workplace. It lists a wide range of steps that employers can take to improve physical and mental health amongst staff, from improved ventilation to workplace mental health support.
The report suggests that, in order to improve the health of their employees, employers need to take the same steps they would take to improve job satisfaction and labour productivity, as the effect of these steps will also be beneficial for health.
In order to improve mental health outcomes, employers should focus more on factors such as autonomy at work, opportunities for development and greater flexibility.
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