What does sick leave mean for your business?

Theres no denying sick leave is a major cost to your organisation

If you're looking for up-to-date information on COVID-19 and sick pay, please visit our coronavirus factsheet.

The average UK employee takes 6.9 days of absence per year, at a cost of £554 (CIPD 2015). That amount can quickly add up to thousands or tens of thousands, even for a small or mid-sized workforce.

But what’s the alternative? Without sick leave, few people would want to work for you — and heaven help the ones who did, but then fell ill!

That’s why good sick leave management is vital. The most effective HR departments minimise sick leave costs while supporting unwell employees to recover and return at full strength. Good management starts with understanding sick leave regulations.

When must you offer paid sick leave?

Almost all UK employees are entitled to claim statutory sick pay (SSP). To be eligible, the employee must be on a contract lasting at least three months and have average weekly earnings of at least £120. Eligibility begins the first day the employee starts work.

As of 5 April 2014, you can no longer claim current SSP back from the government*.

Consecutive sick day allowance

SSP is currently £95.85 per week. It’s paid only from the fourth consecutive day of sickness*. The maximum period your organisation is required to pay SSP for is 28 weeks.

Days not worked don’t interrupt periods of consecutive sick leave — so if an employee is off sick Friday and Monday, and doesn’t usually work weekends, that would count as two consecutive sick days.

Sick pay and annual leave

Employees still accrue annual leave while off sick. You can’t force an employee to take sick days as annual leave if they’re eligible for SSP.

Opting out of statutory sick pay

Your organisation can opt out of SSP and offer your own scheme, contractual sick pay, instead. Payments must be at least equal to SSP.

The causes of short-term sick leave

Data from a major UK absence survey shows the most common reasons for genuine short-term sick leave include:

  • Minor illness
  • Musculoskeletal injuries, e.g. broken bones, sprains and conditions like RSI
  • Back pain
  • Stress (CIPD 2015)

How common is non-genuine sick leave?

Non-genuine sickness is another top cause of short-term absence for 30% of companies that employ manual workers, and 23% of companies with non-manual workers (CIPD 2015). Absence management policies should target this costly and unnecessary form of leave.

Best practice for managing sick leave

Now you know the costs and the causes of sick leave. How should you manage it?

Recent data shows 94% of companies have a written policy on absence management (CIPD 2015). A written policy makes clear what is expected from employees, and the consequences of excessive and non-genuine sick leave. Your policy should detail contractual sick pay, employee guidelines for notifying their line manager about sick leave, and other rules on absence.

Most companies also collect and use absence data to identify problem areas, so they can take effective action.

Measures for reducing sick leave

Many organisations also set annual targets for reducing absence. The goal is not to stop employees taking time off when they’re genuinely sick. Rather, it’s to cut down excessive absence.

Absence management policies often support these targets by including:

  • Return to work interviews — This practice sends a clear message that sick absence is actively managed. Interviews can reveal deeper insight into the causes of employee sickness and absence so that preventative action can be taken.
  • Triggered attendance review— An employee attendance review is triggered when his or her sick leave reaches unacceptable levels. As with return to work interviews, demonstrates active management and can reveal hidden causes of absence.
  • Line manager development — Line managers who are trained and well informed about absence management procedures can be more effective in reaching targets.

Other common measures include risk assessments to aid return to work, allowing flexible working, and providing special leave for family circumstances.

When an employee is persistently off sick

Your absence management policy should also include a disciplinary procedure for unacceptable absence. Disciplinary procedures provide a deterrent and help prevent non-genuine sick leave. An employee’s absence levels can be considered unacceptable when:

  • investigation shows the reason for sick leave was not genuine, or
  • levels become unsustainable, affecting the employee’s ability to fulfil their role.

Overall, the way you manage sick leave should promote a positive culture of attendance – so that genuine illness is supported and unacceptable absence stamped out.

* Please be aware that this might differ for COVID-19.

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