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Do you have to pay sick pay during notice?

Did you know that if an employee is off sick during their notice period you may be running the risk of having to pay full salary? Make sure your contracts are up to date, if you need to, so you don’t get caught out.

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All employers should be aware that if an employee’s contract entitles them to receive only a week’s notice for every year’s service up to 12 years (i.e. the minimum statutory requirement) and no salary during sickness absence, then the employer is obliged to pay full salary while the employee is off sick during the notice period.

So what can you do about it? 

If the employee’s contractual notice exceeds the statutory minimum by at least a week the employer is only required to pay Statutory Sick Pay (you can find the current rate here), assuming the employee is on sick leave for the period of his notice. Please note: You can no longer reclaim SSP for sick leave after 5 April 2014.

Minimum statutory notice periods can be found below: 

  • Less than 1 month - Nil
  • Between 1 month and 2 years’ continuous service - 1 week’s notice
  • Between 2 years and 12 years’ continuous service - 1 week for each complete year of service
  • Over 12 years’ service - 12 weeks’ notice maximum.

This could be a dilemma for businesses, as you may choose to pay an employee’s notice in lieu of termination of contract, by increasing notice periods this would obviously mean extra costs. 

It’s an area the Forum feels we need to make you aware of, to enable you to make a business choice on how to implement this. 

Amending your contracts

If you did wish to implement the change outlined above, you will need to amend the terms and conditions in your contracts of employment or employee handbook. You should never undertake this without taking advice from an employment law specialist.

Members of the Forum should ring our helpline for further advice on 0845 130 1722 to ensure your business is protected.