Understand Statutory Sick Pay

Alternatives to paying Statutory Sick Pay

You can opt out of Statutory Sick Pay (SSP) only if your sick pay scheme offers employees daily rates which are the same or better than SSP. You would still retain your rights to recover payments under the Percentage Threshold Scheme. See the page in this guide on getting subsidies or relief.

A scheme run by an employer is usually known as an occupational sick pay scheme.

As an employer, you may wish to pay employees more than the statutory minimum. In this case, you will need to decide on terms and conditions, which should be contractual.

If this is the case:

• you should include the details in the employee's contract and/or the company handbook
• you will need to decide on the maximum rate of Contractual Sick Pay (CSP) you will allow - it is not uncommon to allow the equivalent of normal pay, for a time
• you should decide how long your highest level of pay will last, before either stopping or reducing these payments
• remember to ensure that CSP does not exceed normal pay - it must not be less than SSP

You must still keep records of all sickness absence of four days or more, and of all payments made to employees during their sickness absence. This is so that HM Revenue & Customs can check that your employees are receiving their full entitlement.

You will also need to keep sufficient records to complete form SSP1, so that your employee can transfer to incapacity benefit if necessary. This might happen if your employee had received their maximum 28 weeks' SSP or run out of their entitlement to occupational sick pay, and was not entitled to SSP from you.

Subjects covered in this guide

• Introduction
• What is Statutory Sick Pay and who gets it?
• Earnings-related qualification for SSP
• When to start and stop payments
• How much to pay
• Record keeping and forms
• Getting subsidies or relief
• Alternatives to paying Statutory Sick Pay
• Contractual issues