A payroll manager at a leading Cumbrian accountancy firm is reminding businesses of impending changes to Statutory Sick Pay (SSP).
From April 6, new legislation around SSP will be rolled out with the aim of extending rights to a wider range of workers and improving access to sick pay from the first day of illness.
Jackie Hemus, the manager of Saint & Co Chartered Accountants’ payroll department in Carlisle, is urging local companies to familiarise themselves with the new rules to make sure they are compliant and are aware of any associated cost implications.
The changes which will impact businesses are:
- Sick pay is payable from the first day of sickness, instead of day four;
- The requirement that employees must earn over £123 per week has been abolished and SSP will apply to all members of staff;
- Sick pay will be paid at either 80% of the employees’ average weekly earnings or the maximum SSP weekly rate of £123.25 per week, whichever is lower.
Jackie said: “The changes to SSP represent the most substantial overhaul of sick pay in years and will impact businesses of all sizes. Companies really need to be aware of what the changes will mean for them so they can plan accordingly, from a cost and compliance perspective.
“The main changes to keep an eye out for are that SSP will be payable from day one of sickness as the three waiting days rule is to be abolished, and the existing earnings threshold will be removed to give all employees entitlement regardless of how much they earn. This means part-time and lower paid workers previously excluded will now be entitled to sick pay.
“We strongly recommend that employers review payroll systems, update policies and seek professional advice to ensure they are fully compliant ahead of the changes.”
Jackie has provided two examples of SSP entitlement to help businesses understand their responsibilities.
Example One – Employee on average weekly earnings (AWE) of £300pw
- 80% of AWE = £240pw
- SSP maximum = £123.25pw
Employee entitled to £123.25pw
Example Two – Employee on AWE of £140pw
- 80 % of AWE = £112pw
- SSP maximum = £123.25/week
Employee entitled to £112pw
The AWE calculation is calculated using the eight weeks before the first day of sickness.
To coincide with the SSP changes, the Fair Work Agency which will oversee SSP enforcement alongside holiday entitlements and National Minimum Wage compliance will launch in April.
Saint & Co has offices across Cumbria at Carlisle, Whitehaven, Ambleside, Cockermouth, Millom, Penrith and Wigton. They can be contacted at (01228) 534371 or advice@saint.co.uk.
