The increasing cost of staff absences

During the previous high infection stages of the pandemic, employers had the furlough scheme to support with their wage costs. While employers were strongly discouraged from claiming CJRS grants for short-term sickness absences, it was likely with a large percentage of staff furloughed that ill health may coincide with a period of furlough such that government grant support was available for the majority of the ill health cost. 

As a result, since employers were required to pay over all furlough grant to the employee for whose wages cost it was claimed, many employees also would have received payment while unwell (if that ill health arose during furlough) at a higher rate than the modest fixed rate of statutory sick pay (SSP).

With the ending of the furlough scheme in September 2021, and the exponential rise of the omicron coronavirus variant causing extensive ill health alongside winter coughs, colds and regular influenza, the cost to business of ill health absence is now far greater.

SSP: Temporary change to fit note requirements

To ease GP workloads, especially while they provide coronavirus booster vaccines, the government has changed the rules as to the evidence of ill health from a GP required to qualify for SSP. New regulations in force from 17 December 2021 provide that, for SSP purposes, an employer cannot require proof of sickness via a fit note from a GP until an employee has been off work unwell for 28 days or more. This currently applies to any employee off sick on or after 10 December 2021, and will cover both sickness absences up to and including 26 January 2022 and those which are ongoing and started before 26 January 2022.

Previously, before they were obliged to pay SSP, employers could require evidence after seven days. The new regulations apply whether the ill-health absence from work is coronavirus connected or not, and this change applies in each of England, Wales, Scotland and Northern Ireland.

Contractual sick pay policy requirements review

Employers may also want to consider their approach to the requirements they currently impose before they pay their own (likely more generous) contractual sick pay. Will they temporarily relax their current contractual sick pay evidence requirements for all illnesses or just for coronavirus ill health?

Many sickness pay policies provide that contractual sick pay is inclusive of SSP, adding to the challenges for employers as to when the entitlement for their employees to each of SSP and contractual sick pay arises.

Action on non-medically vouched ill-health periods from December 2021 to February 2022

Many employers’ December payroll deadlines passed before these new regulations came into force. To ensure they have met their SSP obligations and there is no underpayment of wages, employers should review SSP paid for non-medically evidenced ill health on and after 10 December 2021. Employers should also be aware this may continue to impact throughout January and into February 2022.

SSP rebate scheme reintroduced across the United Kingdom

In view of the likely increased SSP burden in relation both to coronavirus ill health and self-isolation due to possible coronavirus infection, the government has reintroduced the statutory sick pay rebate scheme across the United Kingdom. This allows employers with fewer than 250 employees (as at 30 November 2021) to recover up to two weeks' SSP (£192.70) for each employee who is off work suffering from coronavirus or in self-isolation due to possible coronavirus infection (but not if they are suffering from any other form of ill health).

This should assist considerably with periods of self-isolation being reduced, but won’t help those employers whose staff have to undertake multiple periods of self-isolation, and who choose to pay their staff for longer than the two weeks for which the rebate can be obtained.

Reducing sick pay to SSP for self-isolating unvaccinated employees

Where an unvaccinated staff member has been exposed to coronavirus, the period of self-isolation required by government guidance seem to be proving costly to businesses, as is the cost of absence when a coronavirus infection occurs.

Many employers are also grappling with the issue of mandating the vaccination of their workforce. The government regulations that mandate coronavirus vaccinations in the healthcare sector are now in place and require vaccination by 31 March 2022. This imposes the requirement for a first vaccination by 3 February 2022 to allow for the eight-week gap between doses, and is subject to medical exemption.

Other employers are mandating coronavirus vaccination of their workforce, but there are many challenges and risks to doing so other than for those who are working in high-risk settings such as healthcare. Therefore, other employers are resorting to strong nudge tactics to get their workforce fully vaccinated.

Some employers are reducing sick pay for self-isolating unvaccinated employees without a medical exemption, mitigating circumstances or a confirmed vaccination appointment to the SSP level. From 10 January 2022, Wessex Water employees are being paid only SSP if they must self-isolate after being identified as a close contact of someone with coronavirus. Self-isolation is currently only a requirement for close contacts who have not had two coronavirus vaccinations. Full company sick pay will still be paid to unvaccinated employees who have a positive coronavirus test result.

Ikea implemented a similar policy in September 2021, with full company sick pay available to all employees who test positive for coronavirus but only SSP available to those self-isolating after being identified as a close contact (unless their reason for being unvaccinated falls under the company's mitigating circumstances exemption). However, even these lighter touch approaches to encouraging coronavirus vaccination are not without risk of claims for breach of contract or discrimination.

Conclusion

As we edge towards living with coronavirus but coping with the higher ill health prevalent in winter months, it is important for employers to keep up to date both with the ill-health cost support that the government is offering to business, and with the ever-changing regulatory environment as to the management of their workforce costs during the pandemic.

RSM’s employment legal team supports employers with managing their contractual sick pay and statutory sick pay legal obligations, and risk assessing action taken on sick pay to meet the business challenges of the pandemic.

To discuss how our employment legal team can help you to navigate the latest changes, and help you to manage the commercial impact on your organisation, please contact Charlie Barnes.