Welcome, Furlough Part II – what took you so long?
Sarah O’Conner’s recent article in the Financial Times emphasised SSP’s role in enabling workers to quarantine and prevent the spread of coronavirus, although the low rate of SSP means that time off work is a luxury many cannot afford. The UK has the lowest mandatory sick pay for COVID-19 sufferers amongst OECD countries as a proportion of the average worker’s earnings. In the UK, SSP is just £95.85 per week, and workers earning less than £120 per week do not receive anything. The government has introduced self-isolation payments to poorer households and changed the SSP rules so that it applies from the first day of absence from work as opposed to the fourth day; nonetheless Frances O’Grady of the TUC said that this does not go far enough, “Two million workers still don’t earn enough to qualify for statutory sick pay. They can’t afford not to work. And statutory sick pay still isn’t enough to live on.”
The issue of SSP is more important than ever given the current context of COVID-19 in the UK, where there has been a shortage of tests combined with a lengthy turnaround time for results, meaning that more people are off work and reliant on SSP for longer periods of time. Other nations have enhanced their sick leave provisions in order to tackle the pandemic. Canada and New Zealand are two countries which have introduced COVID-19 sick leave policies that are more generous than their pre-existing sick pay benefits. The US introduced the first mandatory sick leave policy in its history for employees with symptoms of COVID-19. Qualifying employees will receive their full pay up to $511 per day. This applies to employers with under 500 staff and will be fully reimbursed by the federal government.
In the UK there is a clear tension between “blue collar” and “white collar” professions. Department of Health & Social Care data from 2019 found that only 26% of UK employees rely on SSP, due to the fact many people rely on their more generous company sick pay schemes. Those in “white collar” professions are more likely to be covered by a company or occupational sick pay scheme, coupled with the fact that they are more likely to be able to work from home. In contrast, those in “blue collar” service industries are less likely to have the benefit of a generous company pay scheme and the very nature of their jobs means that in order to earn a living they will need to interact with others, thereby risking contracting or spreading the virus. Many employees in these sectors will be unable to afford to stay at home and isolate due to the low level of SSP in the UK.
An alternative to a universal increase in SSP could be to have an industry specific policy applied by the government which requires customer-facing roles to have the protection of increased SSP. One key industry which would benefit from such intervention would be the care home sector. The Office for National Statistics published a study, referenced in the FT article, which found that care homes which offered their staff generous sick pay policies were less likely to have cases of coronavirus, protecting employees and the elderly alike. Australia introduced a “paid pandemic leave” for workers in elderly care to ensure that casual care home workers are able to isolate for two weeks if they have symptoms or have encountered someone with the virus.
In the absence of a governmental increase in SSP, some employers may decide to take on the mantle of providing more generous sick pay to protect their workforce. In the US, large employers (who do not fall within the new legislation outlined above) such as McDonalds and Walmart have introduced temporary coronavirus sick pay policies for their staff. Employers must decide at the outset if they would like these measures to be temporary or permanent. There is a risk that if an employer later tries to unwind its improved company sick pay scheme that employees will claim that they have deprived them of their contractual entitlements. The way in which such measures are introduced will require careful wording and communication. We would encourage employers to seek legal advice as early on as possible. Indeed, the experience of the pandemic may well result in a culture shift with employees demanding more favourable sick pay benefits.
Employers can currently reclaim up to two weeks’ SSP from the government if their employee is off work because they had coronavirus, were self-isolating or shielding, if they have fewer than 250 employees and their PAYE payroll started on or before 28 February 2020. Aside from this exception, employers cannot ordinarily reclaim SSP and there is of course a financial burden in introducing more generous occupational schemes during a time of economic uncertainty. In addition, mounting evidence relating to “long COVID” suggests that workers may be rendered unable to work for periods of time far in excess of two weeks.
Some employers may fear that there is a tension between aiming to prevent the spread of COVID-19 by financially enabling people to stay at home and the risk that if SSP or company sick pay is extended on more generous terms this will encourage people to take sick leave when they may not have done so in the past. The OECD argue that “the financial cost of providing paid sick leave to quarantined workers is small in comparison to the cost of them not isolating and spreading the virus further”. The onus is on the government to decide whether a potential increase in sick leave is outweighed by a reduction in the transmission of COVID-19.
Despite the fact that England will enter a second lockdown this week, the issue of SSP will need to be dealt with when we come out of lockdown and will continue to be relevant for those who cannot work from home. When we do eventually find our way through this pandemic, either through a better testing regime or a vaccine, employees may remain nervous about their health going forwards and the risk that future viruses may arise. Therefore it is imperative that companies consider their sick pay schemes and ensure that staff feel secure and able to take sick leave where necessary.
If you would like any further information or advice about the issues explored in this blog, please contact a member of our Employment team.
Natasha acts for both employers and senior executives in a wide variety of sectors including (but not limited to) financial services, law firms and other professional services firms and retail and luxury brands. Natasha is a tenacious litigator and an astute negotiator. She acts in relation to the full range of employment-related issues. She particularly enjoys handling whistleblowing and discrimination cases and helping clients achieve success.
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