I have a new employee who has only been with me for two weeks. Yesterday the employee called in sick. Do I have to pay statutory sick pay (SSP)?
There are conditions that an employee must meet to be eligible for the payment of SSP, which are broadly as follows;
- the individual must be classed as an employee and have done some work for their employer;
- the employee must have average weekly earnings (AWE) of at least £120 per week (NIC Lower Earnings Limit for 2020/21 tax year);
- The employee must have been sick from work for at least four days in a row including non-working days. This period is known as a Period of Incapacity for Work. (PIW)
An employee’s AWE is generally calculated by reference to the eight weeks of earnings prior to the employee being sick from work. In this case, the employee has not worked for you for eight weeks so these rules do not apply. The Regulations state that AWE will be calculated using the earnings the employee is entitled to under their contract for:
- a week’s work;
- a calendar month of work multiplied by 12 and then divided into 52; or
- an annual salary divided into 52.
If the employee has received less than eight week’s pay prior to their PIW starting, then the relevant period is calculated by using all the earnings paid before the PIW and the period those earnings relate to. So if an employee has received two weeks of earnings, then those earnings are added up and divided by two. This gives the AWE figure to determine whether the employee has earned enough to qualify for a SSP payment.
SSP is payable from day four of a sickness absence if the above conditions have been met and a PIW has been formed. The SSP rate is currently £95.85 per week for the tax year 2020/21.
Note that if the employee is away from work due to a Covid-19 related absence, both the eligibility conditions still need to be met and the PIW still needs to be formed, but the requirement for three waiting days has been suspended for these types of absences and SSP would be payable from day one of the absence.