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Sickness absence guidance for employers

Find out how to deal with short and long-term sickness absence.

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Managing sickness absence

The success of a business depends on the health and well-being of its employees. Sickness absence is one of the most serious obstacles to productivity, profitability and competitiveness. The first step you should take in controlling absence is to maintain records of all employees' absences and lateness. The records should be kept in a form which makes analysis of the data relatively simple. This will help you observe and monitor each individual's absence levels.

The absence of staff from work causes obvious problems of productivity, especially when such absences are unplanned. The smaller the company, the greater the effect. Workplace absence costs the UK's economy in excess of £11.6 billion per year. £1.7 billion of that cost is due to employees 'pulling sickies' rather than absences resulting from genuine ill health.

There are three types of sickness absence:

  • Short-term absence
  • Long-term absence
  • Unauthorised absence and lateness

Poor attendance can be a legitimate reason for dismissing an employee, but only after you have investigated the situation thoroughly and taken into account the employee's circumstances, as well as the effect that the absence has on the company's business, including on the other employees.

Short-term absence

Short-term sickness absence amounts to the occasional day(s) off here and there with minor ailments. This can be frequent days of absence or, alternatively, irregular sickness absence.

Long-term absence

Long-term sickness absence occurs where an employee is absent from work for an extended period of time with a prolonged illness or disability. An employee is required to provide a medical certificate from his or her general practitioner should he or she be absent from work for more than seven days.

In 2015, the government is launching an independent sickness advice service intended to support employers and employees in getting those on long term sick back to work. Employers can access this service after four weeks' absence.

Unauthorised absence

Unauthorised sickness absence is short periods of absence – an occasional day off here and there with a minor ailment – where the employee has failed to notify the company.

Pay during absence

An employee is not legally entitled to receive payment for periods of unauthorised absence or lateness. However, for sickness absence, an employee is entitled by law to receive Statutory Sick Pay (SSP) or, alternatively, company sick pay, if you provide this contractual benefit. It is entirely at your discretion whether you provide anything above SSP.

An employee is entitled to SSP once he or she has been absent from work due to sickness for a period of four continuous days or more. This is called a Period of Incapacity to Work (PIW) and all days count towards this, including weekends and bank holidays if these are days that he or she would normally work. No payment is due for the first three days, which are known as 'waiting days'.

All days of absence count as qualifying days for the payment of SSP. A qualifying day is a day on which the employee would normally have been expected to work if he or she had not been sick.

Periods of sickness absence which are fewer than eight weeks apart are linked as one PIW for payment of SSP. This means that, if an employee is sick for a second time during an eight-week period, and the total absence is four days or more, SSP should be paid from the first day of the second absence.

Note: the maximum number of weeks for which an employee is entitled to receive SSP is 28 weeks in any PIW. SSP is payable at the current statutory rate and is to be treated as part of an employee's normal earnings. It is, therefore, subject to tax and National Insurance deductions. You can check the current rate here.

There are exemptions to those who are entitled to receive SSP. These include employees who:

  • Earn below the lower earnings limit for National Insurance
  • Are on fixed-term contracts of less than three months' duration
  • Have received certain state benefits within the preceding 57 days
  • Are in legal custody
  • Are sick during the maternity pay period
  • Are outside the European Economic Area (EEA).

Note: you are legally required to maintain records of SSP payments for a period of at least three years after the end of the tax year to which they relate.

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Last updated 28th June 2016.