We are often asked the question from clients, typically when they are reviewing their contracts of employment as to whether they should operate a statutory sick pay scheme for absence, or whether they should operate an enhanced sick pay scheme.
Statutory sick pay is payable to all employees who have a contract of employment, and an employee has an average earnings of at least £112 per week.
Statutory sick pay is paid from the fourth consecutive qualifying day of sickness, for up to a maximum of 28 weeks, the current rate of payment is £88.45 a week.
If a company operates an enhanced sick pay scheme, the details of the scheme would need to be detailed in an employee contract of employment, or written statement of particulars.
Employers should apply any enhanced sick pay scheme fairly, if there is any evidence that this is not the case, an employer could run the risk of receiving a discrimination claim.
The key points to consider when deciding on whether a company has a statutory sick pay scheme versus an enhanced sick pay scheme;
- The financial cost of running an enhanced sick pay scheme.
- Operating an enhanced sick pay scheme could be viewed as a key benefit and used as an attraction tool for recruitment and retention.
- Operating an enhanced sick pay scheme would provide financial support to an employee if they suffer a long term illness.
- How effective is absence managed in a company, if a company operates an enhanced sick pay scheme could it be open to abuse, especially if absence is not effectively managed.
- To operate a hybrid sickness scheme of both statutory and enhanced, for example enhanced sickness payment is applicable after successful completion of a probationary period, and an employee is entitled to 3 weeks enhanced sickness pay per year, once this is exhausted an employee is only entitled to statutory sick pay.