SSP Costs to Small Businesses

HMRC Changes

As we move through another year of employment the effects of the HMRC reforms on SSP that came into force on 6th April 2014 are still trickling through to small businesses.

Originally under the Percentage Threshold Scheme (PTS), employers were able to recover the cost of SSP via the HMRC.

Post these reforms employers are now in a position of having to bear the full cost of absenteeism.

The Effect on Small Businesses

When businesses find out about the changes they are tempted to look at the viability of an employee on long term sick in a much shorter time frame. The problem with this outlook is that employers can be exposing themselves to a much wider risk and higher cost claims at an Employment Tribunal.

We have found that many members calling the ChamberHR advice line believe the employee has no right to unfair dismissal if they have under 2 years service and this will protect them from Employment Tribunals. This is an incorrect assumption because if the person on long term sick has a disability then this can then result in a protection under the Equalities Act 2010 from day one of employment. The claim for discrimination can then lead to an unlimited award at a tribunal.

Knee jerk reaction to the prospective cost of a long term absence is not advised. The burden of £88.45 for 28 weeks (total cost £2476.60) should be considered against a claim that can be unlimited and will almost certainly be greater than the total SSP paid.

This does not mean that a business can never lose a member of staff who has long term sickness issues, but it makes it important to take advice to ensure things are done in a correct and lawful way.

What to do

For the correct guidance and to reduce risk call the ChamberHR advice line on

01455 852037.