If you operate a small business, it can be hard trying to keep up to date with all of the rules and regulations surrounding absence pay.

Absence pay is the amount of money paid to staff when they have any kind of time off, whether it be off sick, going on holiday or taking time away to have a baby.

Without the correct information, you could find yourself failing to pay employees the right amount of absence pay and breaching employment laws in the process, and therefore putting your business at risk.

To help avoid this, we’ve created a quick article that takes a look at the guidelines that employers have to follow for the most common types of leave including, sick, holiday and maternity/paternity.


Sick Pay

sick employee

What is sick pay and how do I know if an employee is eligible?

Statutory Sick Pay, also known as SSP, is the money that employees receive when they have been off work sick for a number of days.

If a member of staff has been sick for 4 full days or more in a row (including weekends and non- working days), they could be entitled to SSP. There are other rules of eligibility though, as they must earn at least £118 a week (before tax) and follow an employer’s rules for getting sick pay.

If someone is self-employed, have received Employment and Support Allowance (ESA) within the last 12 weeks, are a member of the armed forces or are currently in legal custody, they are not eligible to receive Statutory Sick Pay.

They will also fail to qualify for SSP if they have already succeeded the maximum amount (28 weeks) or if they are currently receiving Statutory Maternity Pay (SMP). It should be noted that part time workers are also eligible to receive SSP, as long as they earn at least £118 a week.

How much do I have to pay out for SSP and how long for?

As an employer, you have to pay out at least £94.25 per week to anyone who is receiving SSP. This amount can be paid for up to 28-weeks and cannot be any less than this figure. Employers have the option to pay more if they have a sick pay scheme in place.

Employees should receive SSP for all days that they are sick, except for the first 3 days which are known as “waiting days”.

Statutory Sick Pay should be paid in the same manner as normal wages, with Tax and National Insurance being deducted as per usual. If an employee has more than one job, it is possible that they may be receiving multiple SSP payments.

Do I need proof of illness?

A fit note is only required if a member of staff off sick for more than 7 full days in a row, including non-working days. These notes can be provided by GP’s or hospital doctors, with any other kind of documentation being up to the discretion of the employer. It is important to note that for absences less than 7 calendar days, an employee can self-certify without a GP’s fit note.

If an employee’s SSP is ending, you must send them a SSP1 form either within 7 days of it ending or on/before the beginning of the 23rd week off if the employee is unlikely to get better any time soon.

The SSP1 form basically informs the employee why you can no longer pay them Statutory Sick Pay and will help towards their application should they choose to apply for Universal Credit or ESA.


Holiday Pay

annual leave

What is holiday pay and how much are employees entitled to?

Holiday pay is the money that employees receive when they take scheduled breaks away from work, also known as a holiday.

The majority of full-time workers are legally entitled to 5.6 weeks, or 28 days of paid annual leave every calendar year. These days are to be taken throughout the year. Employees may need to reserve some leave if there is an office shut down period. Employers should notify employees if this is the case. 

It is not just for full time workers though, as agency workers, workers with irregular hours and people on zero-hour contracts are also entitled to holiday pay.

How much do I have to pay employees for taking a holiday?

Every employee is entitled to a full week’s pay for each week that they take as a holiday, and the amount they receive should be calculated by the number of hours they are usually paid for.

If an employee has fixed hours and pay, then they should receive the same amount they would for one week’s work. A shift worker with fixed hours will receive pay based on the average number of weekly fixed hours they have worked over the last 12 weeks, as well as the average hourly rate.

If an employee has no fixed hours (casual work, zero hour contracts, etc.), they will receive holiday pay based on the average pay they have received over the last 12 weeks (only counting the weeks where they have worked/been paid for their work).

How much notice do employees have to give?

It is recommended that employers should be notified of holiday requests by twice the amount of the time off required by the employee. For example, if a member of staff wanted to book 2 weeks off, they should put in the request a month before in order to allow preparations to be made for their absence. Employers may have their own timelines and processes required to book leave.

As an employer, you can refuse to grant time off such as during busy periods or where other staff are also absent/on leave, but you cannot refuse to let them have the time off indefinitely.

You can also choose to include the 8 UK bank holidays as part of an employee’s annual leave allowance. If an employee works in an industry that may require them to work a bank holiday such as in retail, the employee should still receive this day as part of their allowance to use on another occasion.

If you want to be able to restrict the amount of time off taken at certain times (busy periods, holiday seasons, etc.), this should be written into contracts of employment and explained to members of staff upon recruitment.


Maternity/Paternity Pay

pregnant employee

What is maternity pay and how much time off are employees allowed?

Statutory Maternity Pay (SMP) is the minimum money that employees receive during Maternity Leave.

SMP is paid for up to 39 weeks, with the employee receiving 90% of their average weekly earnings for the first 6 weeks, and then £148.68 or 90% (whichever is lower) for the following 33 weeks. SMP is paid in the same manner as normal wages and is eligible for Tax and National Insurance deductions.

Statutory Maternity Leave is 52 weeks’ and is made up of Ordinary Maternity Leave (first 26 weeks) and Additional Maternity Leave (last 26 weeks). Employees do not have to take the full amount of maternity leave, but they must take at least 2 weeks off when the baby is born, or 4 weeks for those who work in a factory.

How much notice does an employee have to give and how soon can go on maternity leave?

Employees should notify their employer that they are pregnant 15 weeks prior to their due date to qualify for Statutory Maternity Leave.

Employers should be notified that an employee is pregnant and will require time off at least 28 days before the required start day of the maternity leave to receive statutory maternity pay.

As an employer you have 28 days to notify the employee how much they will be receiving and when they will receive this.

Employees are allowed to start their maternity leave up to 11 weeks before the expected due date, but this may start automatically if the baby is born early or the employee is off work with a pregnancy-related illness within 4 weeks of the due date.

Do employees have to give proof of pregnancy?

Proof of pregnancy is not required for maternity leave, but it is required to be eligible for SMP. Sufficient proof can be in the form of a letter from the doctor or midwife, or an employee’s MATB1 certificate.

It should also be noted that when pregnant, employees have 4 main legal rights – paid time off for antenatal care, maternity leave, maternity pay and protection against unfair treatment, discrimination or dismissal. As with all employment rights, breach of these may lead to grounds for a tribunal claim.

What is paternity pay and how much time off are employees allowed?

Paternity pay is the money that employees receive when their partner has had a baby and they are given time off.  Statutory Paternity Pay (SPP) is the minimum money that employees receive during Paternity Leave.  The current rate of pay for SPP is £148.68 or 90% (whichever is lower).

When a baby is born, the partner of the mother can take either 1 or 2 weeks of paid paternity leave, with a week equaling the amount of days usually worked in a week. This time off cannot be taken before the birth and has to end within 56 days of the child being born.

During this time, employees on paternity leave should receive the same amount as Statutory Maternity Pay (as above).

How do I know if an employee is eligible for paternity pay?

To be eligible for paternity pay, an employee must be taking time off for the birth and either be the father of the child, partner of the mother, adopted parent of the child or the intended parent if going through a surrogacy appointment.

Employees also need to be earning at least £118 a week, stay employed by the company up until the birth, give the correct amount of notice and have worked with the company for at least 26 weeks prior to the birth of the child.

As well as being allowed up to 2 weeks off when the child is born, partners are allowed to have unpaid time off to attend 2 antenatal appointments. Employees can take up to 6 and a half hours per appointment, and it’s up to you as an employer if you want to grant them any longer.


Summary

As you can see, there are a lot of rules that come with absence pay and the eligibility to receive these payments.

Ensuring that employees are receiving the correct amount of money and time off is so important and is something that small businesses especially need to be aware of and prioritise.

If you need help with absence management and HR procedures, we offer affordable monthly packages to keep your business compliant and risk free. For more information on how Wurkplace can protect your business, please get in touch today.

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