PAYROLL INSIGHT
Basic SSP procedures
Jill Smith MCIPPdip, CIPP policy manager, covers the basics required to administer SSP
A s we know employees are meet certain qualifying conditions, all such employees are entitled to receive statutory sick pay (SSP). With the financial impact of sick pay being so significant to an organisation, it’s important that all employers know what their obligations are to employees. What is SSP? SSP is money paid to an employee by their employer if they are sick and unable to work and applies to all four nations in the UK. Employers must pay this to their employees who satisfy all the qualifying conditions. You do not have to pay SSP to your employee if you pay wages or occupational/contractual sick pay for the same days that they would be entitled to SSP if it is more than, or the same as, the current rate of SSP. Qualifying rules To qualify for SSP an employee must be employed by you, have an employment contract and have done some work under their contract before they are off sick. They must have been sick for four or more days in a row. SSP would be paid from the fourth day of an absence which is known as the ‘qualifying day.’ sometimes unable to attend work owing to sickness. If they
You don’t have to pay anything for the first three days of sickness – these are known as ‘waiting days’; however, there is one exception where you would pay for the first three days if the employee has been off sick and getting SSP within the last eight weeks. ...off sick for fewer than four consecutive days, there’s no PIW... All days of sickness, even non-working days count towards the total number of days in a period of incapacity for work (PIW). If an employee is off sick for fewer than four consecutive days, there’s no PIW and no action for you to take. You cannot count a day as a sick day if an employee has worked for a minute or more before they go off sick. If an employee works a shift that ends the day after it started and becomes sick during the shift or after it has finished, the second day will count as the first sick day. The employee’s average weekly earnings (AWE) must be at or above the current National Insurance lower earnings limit (LEL), which for 2018/19 is £116.00. For the purpose of determining entitlement to SSP, only earnings that
are liable to Class 1 National Insurance contributions (NICs) are included in the calculation of the AWE. It is important to note that all earnings liable to Class 1 NICs are included, even those on which NICs have not been paid. To calculate the AWE of an employee who is absent sick, you must use a set period of time (‘the relevant period’) prior to the start of the employee's PIW. The period must be at least eight weeks long and is marked by two pay dates: ● date one – the last normal pay date before the employee's first complete day of sickness ● date two – the last normal pay date falling not less than eight weeks before the pay date above. The relevant period is calculated from the day after date two up to and including date one. To calculate average earnings for monthly paid employees add together the gross earnings during the period, divide the total by the number of months in the period. Note that if this is not a whole number of months, round to the nearest whole number – multiply by 12 and divide by 52. Where employees have been paid less than eight weeks of earnings but still qualify for SSP, you can use the sick pay calculator on GOV.UK (https://bit.
| Professional in Payroll, Pensions and Reward | September 2018 | Issue 43 24
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