Tag: SSP

MPs call for statutory sick pay reform to address inadequate financial support for workers most in need

Statutory sick pay (SSP) is failing to provide enough support for those who most need financial help when ill and should be increased and made more widely available, MPs say today.

The report from the Work and Pensions Committee says that a modest increase to SSP in line with Statutory Maternity Pay would strike a reasonable balance between providing extra financial support and not placing excessive extra costs on businesses. It also says that all employees should be eligible for SSP, not just those earning above the lower earnings limit.

Rates of sickness absence and ill health have increased in recent years, with a record 185.6 million working days lost to sickness or injury in 2022. During its inquiry, the Committee heard the current system of SSP was an insufficient safety net for those who relied on it, and no use at all to those who were not eligible.

Despite consultations by previous governments, no permanent changes have been forthcoming. While the Committee understands why the Government decided that the Covid-19 pandemic was the wrong time to introduce changes, due to the immediate additional costs on employers, it finds that this argument is now less valid.

In addition to recommending changes to the SSP rate and eligibility, the report calls on the Government to amend legislation to enable SSP to be paid in combination with usual wages in order to encourage phased returns to work.

On the cost to businesses, the report concludes that the overall impact of SSP reform is difficult to predict, but even if they did not result in lower levels of sickness absence, larger firms would be able to absorb the costs. It says this would not be true of smaller businesses, however, and calls on the Government to consult with small and medium-sized businesses on the design of a small business rebate for SSP.

Finally, the report says that the Government should establish a contributory sick pay scheme for the self-employed to increase support during periods of illness.

Rt Hon Sir Stephen Timms MP, Chair of the Work and Pensions Committee, said: “Statutory sick pay is failing in its primary purpose to act as a safety net for workers who most need financial help during illness.

“With the country continuing to face high rates of sickness absence, the Government can no longer afford to keep kicking the can down the road on reform. The Committee’s proposals strike the right balance between widening and strengthening support and not placing excessive burdens on business.

“A growing number of workers are now classified as self-employed and a new contributory sick pay scheme for self-employed people would be a welcome step towards ensuring they are they are no worse off financially during periods of sickness than employees on SSP.”

A full list of the Committee’s conclusions and recommendations is available on Pages 34–36 of the report.

Commenting on the publication of a Work and Pensions Committee report on whether the government should reform statutory sick pay to provide more financial support to low-paid employees, TUC General Secretary Paul Nowak said: “The Covid-19 pandemic showed that our sick pay system is in desperate need of reform. 

“It beggars belief that ministers have done nothing to fix sick pay since. 

“It’s a disgrace that so many low-paid and insecure workers up and down the country – most of them women – have to go without financial support when sick. 

“The committee is right that ministers urgently need to remove the lower earnings limit and raise the rate of sick pay. 

“Wider reform is also needed to remove the three days people must wait before they get any sick pay at all.  

“Working people deserve better. 

“It’s time for a new deal for workers, like Labour is proposing – which includes stronger sick pay and a ban on zero hours contracts.” 

Analysis published by the TUC in January revealed that 1.3 million people do not earn enough to qualify for statutory sick pay – and 70% are women. 

And zero-hours contract workers are eight times more likely than those on secure contracts (30.3% compared to 3.6%) to miss out on statutory sick pay because they don’t earn enough to qualify. 

A Tale of Two Pandemics: TUC exposes COVID Class Divide

NEW POLLING reveals the extent to which low-paid workers have borne the brunt of the pandemic

  • NEW POLLING reveals the extent to which low-paid workers have borne the brunt of the pandemic 
  • TUC analysis shows three industries furthest away from recovery are all low-paid  and have highest rates of furlough use 
  • TUC warns the end of furlough and Universal Credit cut will be a hammer blow for low-paid workers 
  • Union body says without an economic reset post-pandemic the government’s levelling up agenda will be “doomed to failure” 

The coronavirus crisis has been “a tale of two pandemics”, the TUC said today as it calls for an urgent “economic reset” to tackle the huge class divide in Britain that has been exposed by the pandemic. 

The call comes as the union body publishes new polling which shows how low-income workers have borne the brunt of the pandemic with little or no option to work from home, no or low sick pay and reduced living standards, while better-off workers have enjoyed greater flexibility with work, financial stability and increased spending power.  

Pandemic class divide 

New TUC polling, conducted by Britain Thinks, has revealed the extent of the pandemic class divide with the high-paid more financially comfortable than before, while the low-paid have been thrust into financial difficulty: 

  • Low-paid workers (those earning less than £15,000) are almost twice as likely as high-paid workers (those earning more than £50,000) to say they have cut back on spending since the pandemic began (28 per cent compared to 16 per cent) 
  • High earners are more than three times likely than low-paid workers to expect to receive a pay rise in the next 12 months (37 per cent compared to 12 per cent). 

This Covid class divide isn’t just apparent on personal finances. The polling also shows how low-paid workers are markedly more likely to get low or no sick pay compared to higher earners: 

  • Low-paid workers are four times more likely than high-paid workers to say they cannot afford to take time off work when sick (24 per cent compared to six per cent). 
  • Only a third (35 per cent) of low-paid workers say they get full pay when off sick compared to an overwhelming majority of high-paid workers (80 per cent) 

The TUC has long been calling for an increase to statutory sick pay, which stands at a derisory £96.35 a week, and from which more than two million low-paid workers – mostly women – are currently excluded because they do not earn enough to qualify.  

The union body recently criticised the government decision to “abandon” these two million workers by failing to expand eligibility of sick pay, as they had previously promised. 

This lack of decent sick pay is compounded by the fact that low-paid workers are more than three times more likely than high-paid workers to say they their job means they can only work outside the home (74 per cent compared to 20 per cent).  

This means that low-paid workers face greater risk of contracting the virus at work, and when ill, often face the impossible choice of doing the right thing but losing income or keeping full pay but potentially spreading the virus. 

Low-paid industries lag 

New TUC analysis shows that the three industries furthest away from a jobs recovery – arts and entertainment, accommodation and food and ‘other services’ – are all ‘low paid’ industries.  

These are also the three industries with the highest furlough rates according to HMRC stats, and three of the highest according to most recent ONS estimate.  

The end of furlough poses a serious threat to low-paid jobs in these industries – and combined with the “senseless” Universal Credit cut – will be a hammer blow for low-paid workers and push many further into hardship, the union body says. 

Time for an economic reset 

The TUC says its analysis and poll findings paint a picture of stark inequality in the UK, which has been further entrenched through the coronavirus crisis, and show that the country needs an urgent “economic reset” post-pandemic. 

The union body warns that without such a reset, the government’s levelling up agenda will be “doomed to failure” as ministers risk repeating the same mistakes which followed the financial crisis, allowing insecure work to spiral even further. 

To prevent unnecessary hardship in the coming months, the TUC is calling on the government to: 

  • Extend the furlough scheme for as long as is needed to protect jobs and livelihoods and put in place a permanent short-time working scheme to protect workers at times of economic change 
  • Cancel the planned £20 cut to Universal Credit 

And as part of a post-pandemic reset, the TUC says ministers must: 

  • Ban zero hours contracts 
  • Raise the minimum wage immediately to at least £10 
  • Increase statutory sick pay to a real Living Wage and make it available to all 
  • Introduce new rights for workers to bargain for better pay and conditions through their unions  

TUC General Secretary Frances O’Grady said: “Everyone deserves dignity at work and a job they can build a life on. But too many working people – often key workers – are struggling to pay the bills and put food on the table.  

“It has been a tale of two pandemics. This Covid class divide has seen low-paid workers bear the brunt of the pandemic, while the better off have enjoyed greater financial security, often getting richer. 

“This should be a wake up call – we need an economic reset. It’s time for a new age of dignity and security at work. 

“Without fundamental change, the government’s own levelling up agenda will be doomed to failure. And we risk repeating the same old mistakes of the past decade – allowing insecure work to spiral even further. 

“Ministers must start by banning zero-hours contracts, raising the minimum wage with immediate effect and increasing statutory sick pay to a real Living Wage, making it available to all.  

“And we know that the best way for workers to win better pay and conditions at work is through their union.” 

On the risk to low-paid workers this autumn, Frances said:  “The imminent end to the furlough scheme and cut to Universal Credit this autumn will be a hammer blow for low-paid workers and could plunge millions into hardship, many of whom are already teetering on the edge. 

“The government must reverse its senseless decision to cut Universal Credit and extend the furlough scheme for as long as is needed to protect jobs and livelihoods.” 

Government should use Job Retention Scheme to encourage self isolation, says new report

The Government should use the Job Retention Scheme (JRS) to encourage more workers to self-isolate at home – a key part of the strategy to fight Covid-19 that the current sick pay regime is failing to support – according to new research published by the Resolution Foundation.

The report – Time Out – explores the eligibility, generosity and efficacy of the UK’s statutory sick pay regime and Test and Trace payments during the Covid-19 crisis, and considers the case for reform.

It concludes that with self-isolating continuing to play a crucial role in fighting Covid-19 throughout 2021 as the vaccine is rolled-out, and with the Head of Test and Trace Dido Harding admitting that financial difficulty means some people are refusing to self-isolate, the current system needs to be replaced with a more effective regime.

The report notes that the main support available for employees asked to self-isolate at home is Statutory Sick Pay (SSP). But at just £96 a week, SSP offers the lowest level of Government support provided across any advanced economy during the pandemic. SSP replaces less than a quarter of a typical employee’s previous earnings, compared to an OECD average replacement rate of 60 per cent.

Furthermore, two million employees earning less than £120 a week are not eligible for SSP – a barrier that excludes one-in-four part-time workers, and one-in-seven workers in retail, hospitality and leisure – leaving them with no income at all if they self-isolate at home.

The UK Government has implicitly acknowledged the limitations of SSP by introducing £500 Test and Trace Support Payments (TTSP) for individuals entitled to benefits.

However, the report finds that these more generous payments are not reaching enough people, with only one-in-eight workers entitled to them. For example, data supplied by local authorities across West Yorkshire – an area which has had one of the highest infection rates in the UK over recent months – showed that just 1,783 payments have been made between 12 October and 25 November.

With financial support for self-isolating at home playing a critical role in helping to bring Covid infections down, the report calls for a more effective, generous and easy to deliver support regime to be put in place – using the JRS, Self-Employment Income Support Scheme (SEISS) and Employment and Support Allowance (ESA).

The Foundation proposes the following support:

  • Employees to be paid via the JRS. Extending the JRS to include self-isolation payments would ensure workers retained 80 per cent of their previous earnings. The Foundation estimates this would cost £426 million a month (up from around £112 million which is spent on SSP) if 643,000 employees used the scheme.
  • Self-employed workers to be paid pro-rata via the SEISS. Grants of up £830 should be awarded to self-employed workers who need to self-isolate for ten days, if they haven’t already claimed.
  • Self-employed workers not entitled to SEISS to be paid via enhanced ESA. The many self-employed workers not eligible for the SEISS are entitled to ESA. This payment should be uprated by £20 to £96 a week – in line with the uprating of Universal Credit – while people are asked to self-isolate.

The Foundation adds that while the following package of measures would help to get Covid infections down, the failure of the UK’s sick pay regime should not be forgotten once the pandemic has passed. Permanent reforms to both its eligibility, generosity and operation will be needed, it says.

Maja Gustafsson, Researcher at the Resolution Foundation, said: “Getting people to self-isolate at home is one of the important tools we have in combatting Covid-19. But asking workers to do that often involves a major financial sacrifice – and the UK’s sick pay regime has been woefully inadequate in providing the necessary support. Many more Covid infections will have taken place as a result.

“Coronavirus vaccines will take many months to roll out, so more workers will need to self-isolate at home to contain the spread of the virus next year. Given the failure of the current sick pay regime, the Government must turn now to the far more successful job support schemes to provide workers and firms with the financial support they need to do the right thing.”

Time-outDownload

TUC general secretary Frances O’Grady commented: “The lack of decent sick pay has been a gaping hole in the government’s Covid strategy. Asking workers to self-isolate on £96 a week is not viable – especially when many don’t have savings to fall back on.”

She warned: “This problem needs fixing urgently. Until people are given sick pay they can survive on they will be forced to choose between following the health advice and paying their bills. Nobody should be plunged into financial hardship for doing the right thing.

“Sick pay should be raised to at least the rate of the real living wage and everyone should be entitled to it. It’s not right that two million workers are excluded from it because they do not earn enough.”

TUC polling published in September revealed that more than 4 in 10 workers would be plunged into financial hardship if forced to self-isolate for two weeks on SSP.

How Statutory Sick Pay Works During Coronavirus Pandemic

LEADING legal firm Gilson Gray has issued helpful guidance for employers and employees looking for clarity on Statutory Sick Pay (SSP) as the COVID-19 pandemic begins to affect businesses of all sizes across the UK.

Graham Millar, Employment Law Partner at Gilson Gray, said while it is important to follow Government, Acas and NHS guidelines as the situation develops over the coming weeks, there are some clear steps that can be taken now to manage sickness-related issues.

Graham (above) said: “Employees can qualify for SSP when they are absent because of incapacity. If an employee is experiencing symptoms of the virus and decides to, or is advised to self-isolate, their absence will likely be regarded as an incapacity and they can avail of SSP.

“Recently, the regulations on SSP changed to include an employee who self-isolates in accordance with the Government guidelines. The Government also brought forward emergency legislation which makes SSP payable from the first day of absence.

“It’s good news for smaller companies as well – those with fewer than 250 employees will be reimbursed by the Government for any SSP paid for fourteen days for absences related to the virus.”

Further good news for employees and employers is that those who are advised to self-isolate can obtain a notification from the NHS through 111 which can be used as evidence of absence from work – removing some pressure from GP services.

If employers send staff home to self-isolate following Government guidance, employees will be entitled to SSP. This isn’t the case if employers are taking precautionary measures and insisting employees do not come to work – in this situation employees are entitled to normal pay.

Graham added: “If employees are concerned about coming to work due to COVID-19, allowing employees to work from home can easily resolve the issue. If this isn’t possible, employers will need to consider the current public health advice, including whether it might be discriminatory to refuse employees to work from home.

“It’s important to be mindful and consider employees’ concerns and fears during this turbulent time. As always, the normal rules on annual leave will apply and employees can take holidays during self-isolation or sickness absences, but they won’t be compelled by their bosses to do so.

“Anyone who is not on sick leave can take statutory annual leave, and employers can instruct employees to take statutory leave provided they have given employees the required level of notice – for example if you want someone to take five days’ holiday, you will need to give them ten days’ notice.”

A full version of this guidance is available on https://gilsongray.co.uk/insights/coronavirus-covid-19-qa-for-employers/

The Employment Team at Gilson Gray will continue to publish updates and information for employers and employees on its website News and Insights blog, https://gilsongray.co.uk/news-insights/

All of the teams at Gilson Gray are continuing to maintain the firm’s excellent, high quality service to clients, providing a full range of legal services throughout the pandemic.

 For more information on Gilson Gray and its services, please visit: http://gilsongray.co.uk/