Navigating statutory sick pay

When an employee is off sick, the employer may be obliged to pay statutory sick pay. But, because the rules can be convoluted, figuring out whether – and when – this obligation arises can lead to some head scratching, particularly in the early years sector where the employees work term-time only.

Statutory sick pay is the minimum pay an employee can receive if they are absent from work due to illness. The amount is set by the government and is payable for twenty-eight weeks, with the current rate for tax year 2024/2025 being £116.75 a week.

If an employee is off sick for longer than this, they may wish to explore whether they’re eligible to claim for further financial support from the Department of Work and Pensions – for example, employees may be eligible for Employment and Support Allowance (ESA) or Universal Credit (UC).

Employer liability for sick pay may run out after twenty-eight weeks but, if the contract of employment is still in existence, it’s also possible for an employee to request annual leave to supplement their income. This request can actually be made at any time during their sickness absence and not just at the end of the SSP period.

Certain conditions need to be met by the employee before the employer is obliged to pay statutory sick pay. These are that:

While this may seem like stating the obvious, in effect, this means that the person concerned must work for an employer and be liable to pay class one NI contributions. The definition is sufficiently broad enough that it will include staff working on a casual or temporary basis, apprentices, and staff working under a zero-hours contract. Any employee with less than 3 months service falling within these categories will also be entitled to receive SSP for the duration of the contact agreed to.

This is ascertained by calculating an employees’ average wage over the eight weeks immediately before the illness. However, there are special rules for employees who have not worked for that length of time, or where they have fallen sick before their first pay day. The average wages are then calculated by dividing the wages due for that period by the days, weeks or months within that period. The government has an SSP calculator available on their website that can assist.

Although SSP is paid for any qualifying day during the twenty-eight-week period, the first three days of a period of incapacity for work (PIW) are not. These are called ‘waiting days’ and the employee will not be entitled to any payment during that period. Waiting days are not always the first three days of absence – particularly in instances where an employee falls ill on a non-working day.

For example, Donna works as a nursery assistant for four days a week: Monday, Tuesday, Thursday and Friday. She fell ill on Sunday afternoon. Monday, Tuesday and Thursday are her waiting days, so, in a pro-rata calculation, she’ll only receive SSP for the Friday.

This will either be in accordance with the employer’s rules – such as a sickness reporting procedure – or, if the employer doesn’t have any rules, then within the first seven days of illness.

Government guidance currently states that, if an employee doesn’t inform their employer of their absence by the deadline, the employer is not obliged to pay SSP. However, it also states that employers cannot refuse to pay SSP if the employee is late in producing a sick note, particularly if there’s a good reason for the delay.

If an employee falls ill within eight weeks of their original absence, even if that subsequent illness is different, then under the ‘linking rules’ for SSP, the second (potentially unrelated) period of absence will be treated as being linked to the first absence, and the waiting day rule will not apply. On the plus side for employers, this also means that the SSP period doesn’t restart again on the second absence for a further twenty-eight weeks.

A common source of doubt for setting leaders is whether an employee is eligible for SSP when they fall ill during, or just before, a school holiday. The answer to this depends on the type of contract of employment that has been issued.

Technically, if an employee is a term-time worker and they fall ill outside of their contract of employment, such as during school holidays, then because they are arguably not an employee during those times, it’s possible that SSP doesn’t have to be paid. A word of warning, however: trying to unravel this can be complicated and advice should be sought.

Generally speaking, if an employee falls ill before a setting closes for a holiday period, and if they had not fallen ill wages would have been paid because, for example, they are salaried, then SSP should be paid. It’s rare that SSP is not payable when an employee falls ill before a holiday period.

As an Alliance member, you have access to Law-Call's 24-hour legal advice telephone service, which can help you navigate through the process. Contact details can be found in the Alliance member benefit overview section of EYA Central: bit.ly/U5Law-Call.