Why Pay More? The Case for a Generous Sick Pay Policy

One of the most common types of short-term leave is sick leave. Everyone gets sick — according to a recent study ,??the average UK employee took 7.6 days off sick last year?— and we’d rather not have them around when they are.

There are two types of sick pay in the UK – Statutory Sick Pay (SSP) and company sick pay. The former is a legal minimum, which every eligible employee in the UK has a right to. The latter is an optional benefit that a business can choose to provide or not.

In this article, we’ll highlight the weaknesses of SSP and make a case for why companies should be going above and beyond this for their employees, featuring insights from some UK businesses already doing more.

SPP in the UK

In the UK, SSP is a crucial employment benefit that financially supports employees who cannot work due to illness or incapacity and plays a significant role in the employment landscape.

For workers, it provides a vital safety net, ensuring they receive a minimum level of income during periods of illness, reducing financial stress and allowing them to focus on recovery without worrying about loss of income.

This support is particularly essential for vulnerable individuals or those with long-term health conditions.

For employers, the SSP system provides a benefit in helping them to maintain a healthier workforce, contributing to their employees’ wellbeing and (in theory) reducing absenteeism and presenteeism.

Currently, in the UK, employers pay for a maximum of 28 weeks for the same illness at the?SSP?rate 23/24 of?￡109.40. A?daily rate can also be calculated and paid for the days the employee typically works.

To be eligible to receive SSP, an individual must be an employee and have been earning at least the lower earnings limit. They must be unable to work due to illness or incapacity, for at least four consecutive days (the first three days off sick are not paid) and inform their employer of this within the timeframe specified in their employment contract.

Crucially, an employer cannot force employees to take annual leave when they are eligible for sick leave, though higher earners might prefer to – an issue we’ll return to later.

The lower earnings limit and weekly rate are reviewed annually, and?eligibility can also vary based on specific circumstances, so it’s important to stay up-to-date with any changes .

Benefits of going beyond

The weekly rate of SSP is clearly far below the average weekly earnings of a full-time employee in the UK – in 2022, the median full-time wage for an adult was ￡33,000 a year, roughly ￡635 a week.?

This means that, without a more generous company policy, having the misfortune of falling ill could hit your wallet pretty hard. It's not what you need when clearing the shelves of Lemsip and turning to Deliveroo when you can’t muster the strength to cook.

All jokes aside, this is a pretty significant financial disincentive to calling in sick – especially when the first three days (which is often the extent of the average cold) are completely unpaid under SSP.

As a result, companies that rely on SSP alone can expect to see much higher rates of ‘presenteeism’, the hugely counterproductive phenomenon of unwell employees turning up to work sick to avoid taking leave and potentially prolonging and spreading their illness at the same time. Wonderful.

When employees choose to?work through sickness for financial reasons, they risk their?long-term health and well-being, often resulting?in longer periods of absence to recover from mental or physical health issues that have not been addressed.?

This is not just speculation – according to the Office for National Statistics , at the start of this year there were more than 2.5 million people off work in the UK due to long-term sickness, the highest since records began, and 185.6 million working days were lost.

Something isn’t stacking up here. You (probably) can’t control government policy, but you can choose to supplement it. And many companies do, with some inspiring results. We asked five business leaders how and why they go above and beyond statutory requirements in their sick pay policy, and this is what they said…

Example companies

“When one of our employees becomes unwell, we put their health first,” says Kaitlyn Siu, Founder and CEO of Teach Your Kids Code . Her company has approximately 150 employees in the UK. Under its sick leave policy, all who have completed a 90-day probationary period are eligible for 10 days’ of fully paid?sick leave per calendar year.

For those who have worked at the business for over a year, an extended sick leave policy provides up to 12 weeks of sick leave at full pay.

On the reasons for this, she said, “We value the health of workers and recognise the value of a strong sick pay policy in preserving a productive and healthy workforce.” She explains that implementing the policy has been beneficial for both the company’s operations and its employees because “it lessens stress and fosters a healthier work environment.?

Additionally, it reduces absenteeism because sicker workers are less likely to report to work, reducing the spread of infections among coworkers.”

Far from the generous policy being taken advantage of, Siu says that “Long-term gains for our company have been made as a result of increased overall productivity and fewer disruptions.” The business impact has been overwhelmingly positive, but the motivations run deeper than that. “This additional support demonstrates our dedication to building a caring and supportive work environment,” Siu confirms.

While the above example shows the impact that generosity can have, flexibility is also something that can make a big difference to employees. Matthew Smith, Operations Manager at Ticket Squeeze , told us how proud his company is of its flexible sick pay policy, “designed to prioritise the wellbeing of our employees.”?

The policy is unusual in allowing employees to take sick leave in smaller increments, unlike the typical requirement of an illness lasting at least three days. This enables employees to address their health needs as they arise.

On the decision to adopt this novel approach, Smith explains, “We understand that illness can vary in duration and severity, and we believe that flexibility is key to providing genuine support.”

The data certainly supports this, with the ONS report highlighting that minor illness is the most common reason for sickness absence, accounting for 29.3% of occurrences – as minor illnesses are typically short-term, under SSP and many companies' sick policies, these absences wouldn’t be paid, though under Ticket Squeeze’s flexible policy, they would be.

Acutely aware of the financial difficulties facing many in the UK currently, Hannah Barmby, Head of Qual Delivery at Roots Research , says, “By providing additional paid sick leave, we hope to be reducing the financial pressure on our team when they are ill and fostering a culture of prioritising both mental and physical health.”?

The company offers a paid sickness allowance above statutory requirements, up to 10 days per year consistent across all roles, in a policy “that has been in place from the first hires to the business and been maintained throughout its growth to the 35 employees we have now.”

The work consists of quick turnaround projects and overlapping priorities, so the company sees this policy as part of a proactive approach to avoiding stress and burnout. Barmby adds that she doesn’t feel it should be outside the norm to have some paid sick leave outside of SSP and that the current policy “is under review while we strive to create the most secure workplace we can for our team in these challenging financial times.”

Clarke Duncan, Founder of OutsourcingStaff , says they “aim to go above and beyond statutory requirements by providing our employees with full pay during their sick leave, up to a specified number of days per year,” in a policy that has been in place since 2002. Duncan explains how this has benefitted both employees and the business: “We have found that this policy not only gives peace of mind to our employees when they are unwell but also fosters a sense of loyalty and appreciation to the company.”

Despite the secondary benefits to the company he says, “Our main goal is to ensure they can recover without added stress,” as “we believe that employees should not have to worry about financial implications when they are ill. No one needs the added stress of being unable to afford their bills through no fault of their own.” On the potential for abuse, he doesn’t view this as a significant issue: “We’ve found that it’s only been used for genuine reasons, and we have a very high staff retention rate.”

Finally, Billy Parker, Director of Gift Delivery UK , highlights the importance of going beyond statutory requirements not just in terms of pay but also in support of employees when facing health concerns. “Our policy provides employees full pay for up to two weeks of illness and half pay for up to four weeks.?

We also provide additional support to our employees, such as access to our Employee Assistance Programme, which offers free counselling and advice.” Again, Parker highlights the mutual benefit of this kind of policy, highlighting it as “a key factor in helping us to attract and retain the best talent,” while also being “essential for providing our employees with the security they need to take time off when they are unwell.”

Looking forward

If so many UK companies are recognising the need to go beyond SSP to provide genuine security for employees in times of ill health, is it time to rethink our SSP system in the UK?

It may come as no surprise, after our recent article on how the UK paternity leave provision stacks up against other developed nations, to learn that we have one of the lowest rates of statutory sick pay in Europe.?

Additionally, SSP does not currently cover the self-employed. Many other high-income nations have more generous policies, and there have been widespread calls for reform, from movements such as Safe Sick Pay , to bring us in closer alignment with our peers on this issue and “create better workplaces that ensure that hardworking people can meet living costs if they need time off.”

From the employee perspective, there are two clear reasons why a better sick pay policy is needed. First, employees deserve to know that they won’t be penalised for something they cannot avoid and that they will not suffer financially if they are unable to work due to sickness.?

Second, everyone deserves to know that the environment they are working in is safe and that they are not being exposed to illness that they could then catch and take home to their loved ones.

Unfortunately, until there is government-level reform, the onus is on companies to show that there is recognition of the value and importance of a more generous allowance. After all, it’s not a safety net if it doesn’t keep you safe. Fortunately, as this article shows, plenty of UK companies do recognise the mutual benefit provided by sick pay that’s fit for purpose and are blazing the trail for a more compassionate and responsible approach.

Thank you to Teach Your Kids Code, Ticket Squeeze, Roots Research, Gift Delivery UK and OutsourcingStaff for sharing your insights and, hopefully, inspiring more businesses to follow your lead!

This article was written by Abigail Willford and originally published on the Leave Dates blog .