Statutory Sick Pay Can No Longer Be Reclaimed in U.K.

By Alex Denny, Victoria FitzGerald and Emma Vennesson May 12, 2014

Since April 6, 2014, employers can no longer reclaim statutory sick pay (SSP) from the U.K. government. Previously, they had been able to reclaim any amount of SSP paid in a particular month which exceeded 13 percent of their National Insurance contributions in that month. This tended to benefit small businesses and companies with higher than average sickness absences among their staff.

The reason for the change is that the government felt the previous position gave employers an incentive not to encourage their employees to return to work. The government intends to invest the money saved into the new Health & Work Service, a governmental body due to be established in 2015 with the aim of helping employers and employees manage sickness absence effectively. It is expected that the Health & Work Service will provide free occupational health assessments for employees on sick leave, as well as a website and helpline giving information and advice on sickness absence.

Only time will tell whether the new Health & Work Service will help in the management of sickness absence or whether it will simply add an additional layer of bureaucracy for employers. In the meantime, the fact that employers are now wholly responsible for funding SSP is likely to be unwelcome news.

Alex Denny is a partner, Victoria FitzGerald an associate and Emma Vennesson an associate in Faegre Baker Daniels’ London office.

Copyright 2014 © Faegre Baker Daniels LLP. All rights reserved.

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