The government has recently announced a review of Statutory Sick Pay (SSP).
The review will look to tackle some of the major challenges presented by the modern-day working world where far too many people are quitting work after a period of sickness absence and many people now work on freelance or short-term contracts (known as the ‘gig’ economy) making it difficult to be sure of a regular income.
SSP is paid to employees and ‘workers’, not those who are genuinely self-employed. ‘Workers’ are a separate employment status to employees and generally this defines casual type staff who have no guarantee of work but have some flexibility about whether they accept what is offered.
Statutory Sick Pay in the ‘Gig’ Economy
About 1 million people in the UK are considered ‘gig’ economy workers, and are receiving little to no holiday or sick pay from their employers. This is because the employee/worker has to earn on average at least £118 per week (gross) and have been unwell for at least 4 days in a row including non-working days. Given the nature of ad hoc work it can be difficult for such individuals to meet the average earnings required to qualify for SSP.
Different people hold contrasting views regarding the working environment in a gig economy. Some believe it can offer great flexibility while others think it can be one of exploitation, offering low pay and little employment protection. The reputation of some gig economy employers has not been helped by various challenges by individuals in the Employment Tribunal (“ET”) over employment status, normally regarding whether someone is self-employed or a ‘worker’. These cases are likely to continue.
The main consideration for the government will be to consider whether to reduce the Lower Earnings Limit (LEL) which could allow more ‘workers’ and indeed employees to become eligible for SSP. This could be a welcome boost to workers and employees but cause financial pressure on employers. The government will consider other aspects such as the payment of SSP in full during a phased return.
If you would like further information about SSP, your employment status or the status of those you engage/employ, please contact Warren Moores in our Employment Law and HR team on 0161 475 1225 or email [email protected]