SSP The Rules Made Simple
Here’s what you need to know about paying Statutory Sick Pay (SSP).
To be eligible the employee must:
• have started work. There is no minimum requirement period -it doesn’t matter how long the employee has worked for the employer.
• notify the employer within 7 days from the 1st day of sickness (or whatever is specified on the company sick pay policy) that they will be out of work due to sickness.
• be sick for at least 4 days in a row, known as the Period in Waiting (PIW). All days count towards a PIW including weekends and non-working days. PIW’s can be linked if there are 2 periods of sickness of 4 or more days in no more than 56 days or 8 weeks.
• earn enough money to qualify. They must have earnings at or above the NIC Lower Earnings Limit (LEL), currently £112 per week. If the earnings vary the employer would need to work out the Average Weekly Earnings , this is done over the “Relevant Period” of 8 weeks prior to the first day of sickness.
SSP will be paid for each qualifying day that the employee is out of work sick. Qualifying Days are the employee’s normal working days. The first 3 qualifying days of sickness will not be paid, these are called the Waiting Days. If PIW is linked, only period of Waiting Days needs to be served – if 2 waiting days are in the first PIW then in the second linked PIW only 1 waiting day needs to be accounted for. The daily rate of SSP is the weekly rate divided by the number of qualifying days; the weekly rate of SSP currently is £88.45.
If an employee is not entitled to SSP, the employer must give them a form SSP1 with the Part B filled in, indicating the reason for them not being entitled.
Records for SSP should be kept for a minimum of 3 years, as and per HMRC guidelines.
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Review to be made on Statutory Sick Pay (SSP)
It has been announced by the Government, new plans to help people with long term conditions avail of the benefits of work and improve their health. Statutory Sick Pay will be reviewed as part of these new plans. The aim is that phased returns to work and supportive conversations will be encouraged.
The plans proposed are as follows:
- a review of Statutory Sick Pay and fit for work notes from GPs to help employees return to work quicker and for longer
- to encourage employers to engage with their employees that have long term health conditions to prevent the employees not returning to work
- a debate about recognising the value of work as a positive health outcome
- to encourage Jobcentre Plus work coaches to signpost claimants to therapy
- the launch of a consultation on Work Capability reform, the scheme that assesses claimants of disability benefits.
The current government believes the system is not working that they inherited in 2010. They believe improvements have been made in the areas of supporting and encouraging employees that can work and for those that cannot, guaranteeing a safety net. Further work in the areas of extending fit notes from doctors to other healthcare professionals to help ensure employees receive more support and help making sure the system works for everyone and no one is disadvantaged.
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Are you up to date with family friendly leave?
Family friendly leave has developed significantly in recent years. Keeping abreast of what’s what can be challenging for employers.
BrightPay’s employment law experts have designed a free webinar for employers, which will give attendees an overview of Maternity, Paternity, Shared Parental Leave and Parental Leave how to process them directly through payroll.
The webinar will highlight frequently asked questions in relation to the leave types mentioned above, such as:
- Who is eligible?
- How employees apply?
- Pay and other benefits during family friendly leave.
- Managing family friendly leave efficiently and legally!
The webinar will give attendees a chance to ask any questions you may have, with an interactive Q&A session at the end of the webinar.
Places are limited for this webinar. Don’t miss out – book your place now!
If you cannot attend the webinar, don't worry – the webinar will be recorded and as long as you have registered you will receive a link to the recording afterwards.
Bright Contracts – Employment Contracts and Handbooks.
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Auto Enrolment Spotlight on SMEs
The auto enrolment spotlight is now very much focused on small to medium businesses. Over 600,000 SMEs are due to enrol in the tax year 2016/2017.
Under automatic enrolment regulation, all employers must have suitable workplace pension arrangements in place to which they must contribute and automatically enrol eligible workers.
Every employer in the country has been given a staging date, by which they must have enrolled by. The advice to small employers is to know your staging date and start planning early. If you don’t already know your staging date it can be found here.
Key aspects of any planning stage will include:
- Review any existing pension scheme: if there is a pension scheme in place, does it meet the statutory requirements for auto enrolment?
- Choose a Pension Provider: as a small employer, will you opt to go with the National Employment Savings Trust (NEST) or will you shop around for a provider who may better suit your needs?
- Decide how to manage auto enrolment: managing auto enrolment does not have to be a nightmare, financially or otherwise. There are low cost options available to employers; for example BrightPay provides all automatic enrolment functionality as standard, simply process AE with your payroll. Further details on BrightPay’s auto enrolment offering can be found here.
Although some policy decisions will be harder than others, small employers do not need to dread auto enrolment. Since the program’s roll out in 2012, many of the teething problems have been ironed out, and a number of rules have been simplified and relaxed. In addition, software solutions and support are now far better established, all of which mean SMEs can manage auto enrolment easily in-house.
In addition to the above planning stages, there are other concerns that the small employer may want to start considering:
- Data Quality: are your employee records up-to-date and correct? Incorrect information could result in an employee being enrolled or not enrolled incorrectly, putting your business at risk of breaching statutory obligations.
- Communication: regulations set specific communications which employees must receive from their employer. Are you familiar with these? Can your payroll provider assist you?
- New Employees: there is no qualifying period for auto enrolment, if a new employee meets the age and earnings limits they will need to be enrolled from their first day, even if they are on probation. If you have a probation policy stating the employees must have successfully completed their probation period before they are entitled to join a pension scheme, this will need to be reviewed. Some employers choose to postpone enrolment, this can be done for a period of 3 months, allowing employers the opportunity to assess a new employee.
AE can also pose questions in relation to your contracts of employment, and how different types of workers should be dealt with. Answers to these questions and more can be found here.
Bright Contracts – Employment Contracts and Handbooks.
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Dress Code - To heel or not to heel
A recent case has brought the issue of dress code into the headlines. A temporary secretary started on her first day as a receptionist in the large Accountancy Firm Price Waterhouse Cooper, only to be told she had to go and buy herself a pair or heeled shoes as the flat shoes she wore were not deemed to be appropriate as they were not part of the dress code that the recruitment agency stipulated. She refused, stating that male employees did not have to wear heels so why should she. She was sent home without pay.
So this brings us to the question, how important is a dress code in the workplace?
The employer is fully within his rights to include a policy in the company handbook stating that employees must wear a particular dress code, i.e. smart, business-like attire or a uniform if there is one. If the employees are dealing with customers on a face to face level or representing the company in any way then it is especially important that the employees are seen to be dressed appropriately in neat and smart attire.
But can an employer make requests from one group of employees and not from another? Can an employer request that female staff wear heels over flat shoes? In this day and age and with all the advancements made for equality across all I would have to say no. But obviously there are some archaic ideologies still in practice out there.
Commenting on the situation, Rebecca Hilsenrath, chief executive of the Equality and Human Rights Commission in the UK, said: "Forty-one years on since the introduction of the Sex Discrimination Act, it's baffling that there are still some companies that are practicing this sort of outdated sexism."
"In our view, unless equally stringent requirements are applied to male workers, it is likely that a requirement to wear two inch heels would constitute unlawful discrimination, and we will look into whether action needs to be taken."
The employee in question has now set up a petition asking for it to be made illegal for companies to require women to wear the footwear for their jobs.
Bright Contracts – Employment Contracts and Handbooks.
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New National Living Wage from 1 April 2016
From 1 April 16, a new National Living Wage will come into effect. The new Living Wage, set at £7.20 per hour, will be compulsory to all workers aged 25 years and above. This increase is part of an overall plan by the Chancellor that a compulsory national living wage of £9.00 per hour will be in existence by 2020.
In addition, the financial penalty payable by employers who underpay minimum wage rates will increase from 100% to 200% of the underpayment due to each worker. However, this will be halved to 100% if the fine is paid within 14 days.
Research shows that the higher wage rate will have the greatest impact in the retail and hospitality sector.
The question on many employers’ lips now is how to fund this increase. Reports suggest that there are three common coping mechanisms:
- Accept lower profits
- Reduce overtime and bonuses
- Reduce employee numbers through redundancy and/or slower recruitment
Other facts employers need to know include:
- Living Wage does not apply to self-employed
- Tips cannot be counted towards the Living Wage
- Living wage will apply regardless of geographical location, it is not just a London initiative.
So regardless of how you will fund the new wage bill it is important that you make the changes come 1 April. Failure to do so could see your company facing hefty fines and being named and shamed. In October 2015 HMRC named 113 employers that hadn’t been paying workers fairly. As well as many small businesses they included fashion chain Monsoon Accessorize and outlets of sandwich chain Subway.
Bright Contracts – Employment Contracts and Handbooks.
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EU court rules travelling to work 'is work' for employees with no fixed office
Large numbers of workers could be entitled to more pay or a reduction in hours due to a ruling by the European Court of Justice. The ECJ has ruled that time spent travelling to the first and from the last appointments by workers without a fixed office should be regarded as working time.
The adjudication comes in a case brought by the Spanish trade union workers at the security firm Tyco. However, because the ruling covers the European Union working time directive, it is expected to affect workers across the bloc. The court said its judgement was about protecting the "health and safety" of workers as set out in the European Union's working time directive. One of its main goals is to ensure that no employee in the EU is obliged to work more than an average of 48 hours a week.
The British government tried to intervene in the case, arguing that allowing travelling time to be counted as working time would lead to substantially higher business costs. However the European court dismissed this argument and sided with the Spanish employees. This means time spent by tradesmen, sales representatives and carers driving to their first job of the day and home from the last job of the day will count as time spent in work. The ruling has angered some business groups such as Business for Britain who argue European courts are too powerful and have too much influence over British affairs.
The court ruling said: "The fact that the workers begin and finish the journeys at their homes stems directly from the decision of their employer to abolish the regional offices and not from the desire of the workers themselves.
"Requiring them to bear the burden of their employer's choice would be contrary to the objective of protecting the safety and health of workers pursued by the directive, which includes the necessity of guaranteeing workers a minimum rest period."
Bright Contracts – Employment Contracts and Handbooks.
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Zero-hours Contracts up by 19%
According to the Office of National Statistics (ONS), the number of workers on zero-hours contracts has increased by 19% from 624,000 to 744,000, a fifth in the last year alone,
A zero-hour contract is an employment contract that an employee has that has no set minimum hours or definite schedule of work. It allows employers to hire employees with no guarantee of work. Employees under these contracts tend to have to be very flexible and are expected to be "on call" and are only compensated for actual hours worked.
The main types of people on zero- hours contracts are single parents, students, people under 25 and over 65 and women compared to other employed staff. The main sectors offering zero-hours contracts are:
- Tourism and hospitality sector
- Health sector
- Education sector
Zero-hours contracts are often considered controversial as these types of contracts do not offer enough financial stability or security. Employers could also abuse these type of contracts by offering more hours to favoured employees and fewer hours to those less valued employees. A refusal to work at any one time may result in a prolonged period of lack of work. Employees under zero-hours contracts also do not have the same employment rights as employees on traditional contracts. They only have basic social security rights such as maternity/paternity benefit, holiday pay and health insurance. Should an employee earn less than £5,772 in the tax year, they will not receive any credits for the state pension.
Research shows that workers on zero-hours contracts earn less per hour than employees in similar positions. A study by the TUC in December 2014 showed the average weekly earnings for such employees were £188 in comparison with permanent employees earning £479. The average person on a zero-hours contract typically works on average 25 hours per week. The ONS found that 40% of those on zero-hours contracts wanted to work more hours than they are offered.
Zero-hours contracts do offer flexibility for certain employees. Mark Littlewood, the Institute of Economic Affairs' director general has said "Not everyone is able to work at fixed and regular times and adaptable contracts such as these offer the opportunity of employment to students, single parents and many more".
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Increase in penalties for failure to pay the UK National Minimum Wage... IS NOW IN FORCE
The maximum financial penalty for a failure to pay the National Minimum Wage increased this week. Previously, the maximum penalty was £20,000 per notice of underpayment, irrespective of the number of employees who have been underpaid by the employer. From 26 May 2015, the maximum penalty of £20,000 can now be calculated on a per worker basis rather than on a per employer notice basis.
Bright Contracts – Employment Contracts and Handbooks
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What is Vicarious Liability?
Vicarious liability is a form of strict, secondary liability that arises under the tort law doctrine of agency – respondeat superior – the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the "right, ability or duty to control" the activities of a violator.
What does this mean for Employers?
Employers are vicariously liable for the negligent acts or omissions by their employees in the course of employment (sometimes referred to as 'scope of employment').
The employer is charged with legal responsibility for the negligence of the employee because the employee is held to be an agent of the employer. If a negligent act is committed by an employee acting within the general scope of her or his employment, the employer will be held liable for damages.
One such area that employers need to watch out for with regard to the principle of vicarious liability is the area governing driving company vehicles
Some examples of cases heard where vicarious liability was upheld;
Smith v Stages (1989), an employee was involved in a road accident whilst travelling back to his normal place of employment. He had been working elsewhere. This was held to be within the course of his employment. Lord Lowry considered a decisive factor being that he was paid a normal working day pay for his day of travel.
Rose v Plenty 1976 which involved a milkman who, against company orders, took a 13 year old boy with him on his round. The boy was injured due to the milkman's negligent driving. The boy, who sued both the milkman and the dairy, initially lost his case but the matter came before the Court of Appeal when Lord Scarman found a crucial factor to be that the boy was actually helping in an unauthorised way by helping deliver milk.
The compensation explanation of vicarious liability holds that the logic for the doctrine is to ensure that innocent plaintiffs have a solvent employer against whom to sue and if we are to look at both the employee and employer it is more likely to be the employer who is wealthier and/or carries insurance.
The courts have held that vicarious liability does not arise in situations where the wrongful acts are not within the course of employment. Activities which are clearly outside the scope of the employment cannot give rise to vicarious liability such as driving the company vehicle to the shops or cinema in the evenings.
If you have no Company Vehicle Policy in place then just click here and get it sorted today! It is important to set up parameters that clearly outline what is acceptable and what is not when driving company vehicles.
Area covering points on your licence, speeding, accurate disclosure of any traffic violations, eye sight issues, parking in unauthorised areas, picking up unauthorised personnel etc can be included.
Bright Contracts – Employment Contracts and Handbooks.
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