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Coronavirus – the cost of “doing the right thing”

In a sneak preview of the Government’s proposed emergency legislation to deal with Coronavirus, Boris Johnson used today’s Prime Minister’s Questions to announce his intention to relax the rules on Statutory Sick Pay (SSP).

With the prospect of widespread absence from work, there has been a great deal of comment on whether the current rules on SSP go far enough to protect workers who are unavoidably unable to come to work.  The weekly rate of SSP is currently £94.25, rising to £95.85 from April.  SSP is payable from the fourth day of absence, with the first three days termed ‘waiting days’.  Crucially, not all absent workers are eligible to receive SSP – in line with many employment-related payments, it is subject to the Lower Earnings Limit, which is currently £118 per week.  Frances O’Grady, General Secretary of the TUC, and Jeremy Corbyn have pointed out that there are, by their estimation, two million workers who fall below this limit and who will receive no SSP. 

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The Government’s proposal is to remove waiting days and therefore to make SSP payable from day one.  In the announcement, the Prime Minister appeared to tie this move to the expected need for a period of self-isolation – a step which he underlined that the Government has not requested from the workforce to date.  Jeremy Corbyn has sought to describe the situation facing workers as a “terrible choice between health and hardship.”   In response to questioning, the Prime Minister suggested that nothing will be done to remove the Lower Earnings Limit from the eligibility criteria; rather, the application process for Universal Credit may be amended.

The Government has a difficult job in balancing the need to respond to a potentially damaging virus with the need to protect employers – since 2014, companies have no longer been able to reclaim SSP from HMRC and therefore foot the bill themselves.  While removing the Lower Earnings Limit would extend SSP to those low-paid workers who will miss out, the Government has consulted on ways of reforming SSP on various occasions over the past few years and these consultations have not suggested such a move. 

With the potential scenario of a large number of workers taking time off due to Coronavirus itself and the potential of two weeks of self-isolation thereafter, the cost to employers could conceivably be huge.  The Government’s proposal appears to take a middle ground somewhere between maintaining the status quo and relaxing the SSP rules fully.  In terms of the financial impact on employers and employees, this approach is better news for both and strikes a much-needed balance.

The rhetoric of the Prime Minister has perhaps belies the fear that employers will have.  His continued repetition of self-isolation being an example of workers “doing the right thing” carries a certain implication.  Where self-isolation is necessary, clearly it is the ‘right thing’ in dealing with a potential medical crisis.  However, self-isolation for the sake of it (or where this might be an abuse of the current situation) is not to be rewarded.  Employers have ways of ensuring that absence is genuine and also the power to make sure that those workers who are “doing the right thing” do not suffer as a result of this.  Although the development of the virus is hard to predict, a common sense approach from all parties will hopefully prevail to allow businesses and workers to respond to any threat in a measured way. Ensuring you have a clear policy and procedure that will enable you to implement and manage the new rules is vital. Contact us if a free consultation will help your plan to get ready for the change.

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