Should You Be Offering Over and Above Statutory Sick Pay?

Image Credit: Flickr Commons: Stuart Axe, Screenshot of Norman Wisdom ‘A Stitch in Time’ (1963)

Sick pay is a notoriously tricky one to get right. Schemes in the public sector have had some generous offerings, such as 6 months full pay and 6 months half pay including pay for the first 3 ‘waiting days’. But as you can expect, with such generosity comes problems. So what should small and medium size businesses do for the best? You want to be a good employer and look after your employees, but at the same time, you don’t want to set your business up to be taken for a ride.

In a previous life, I’ve worked in a public sector organisation which at the time had a sick pay scheme that provided employees who had 5+ years of continuous employment with 6 months full pay and 6 months on half pay. Let’s just say that the number of recoveries at the 6 month point seemed miraculous! When the organisation put a target in place to reduce the number of working days lost to employee sickness absence, it used several strategies. The most contentious of which was the removal of full pay for the first 3 days of absence (referred to in sick pay terms as “waiting days”). Undoubtedly, it had a profound effect on absence levels, reducing them significantly, but with it came a reduction in staff morale and perceptions of staff “struggling in, when they really ought to be in bed – not spreading their germs and ‘bugs’ onto their colleagues”.

So what is the right thing to do?

  • Offer anything more than the statutory entitlement and you will still have people who never take a day off sick; of course you will have those who do and who genuinely need to, but there will also inevitably be those who see it as another contractual benefit to be added to their annual leave allowance.
  • If you are considering going over and above the statutory sick pay in your employment contracts it is best to have a clear absence management policy in case you find that either a person’s frequent absences become unsustainable for the company or if you have a belief that the benefit is being abused.

By how much should you go ‘over and above’?

  • One approach might be to take the average number of days of absence per person for the company (UK average is @ 6 per annum) and provide sick pay for the first 6 days of any period of sickness absence in any rolling 12 month period.
  • You might also consider adding into the bargain a company paid health insurance scheme, as a lot of the more genuine people, whilst they don’t have a lot of sick days off, just like to know that if they ever were seriously ill they would not lose their salary.

In short, its a bit of a gamble. You will always have the genuine people who you want to help and you will always have those who abuse it. The trick is striking the balance, so that you provide for those genuine people, without putting the organisation into jeopardy with potential discrimination claims.

If you’d like to discuss this predicament over sick pay, please call us on 01386 751740 or email at [email protected].