Occupational sick pay a common benefit for employees

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A new benchmark report from EEF on sick pay entitlement points to the majority of companies providing Occupational Sick Pay schemes for their employees, with only 13% of companies purely providing Statutory Sick Pay.

Seventy-nine percent of companies give Occupational Sick Pay (OSP) to some or all of their manual workers and even more (87%) give to some or all of their non-manual employees.  In general, those employees in receipt of OSP are receiving it from their first day of absence.  Of those that have ‘waiting days’ this tends to range from one to five days, but the most common length is three days.

Occupational-pay-graphic-CTA 

Data for this benchmark report has been taken from EEF’s 2017 Sickness Absence survey and is based on responses from 232 organisations, employing in excess of 49,000 people.

The level of entitlement to OSP tends to increase with length of service, however 23% of companies provide OSP to their manual employees from the start of their employment, rising to 26% for non-manual employees.  The majority of organisations provide OSP at one proportion of pay, but some companies have two or more rates, starting with a number of weeks on the highest percentage, followed by further weeks on one or more lower proportions of pay.

Sick-pay-stats

Both manual and non-manual employees get an overall average of 9 weeks OSP at the start of employment.  This rises to 17 weeks at 5 years service for Manual workers, with non-manual employees fairing slightly better, getting an overall average of 19 weeks OSP.

Jacqui Tutin, Senior HR Consultant: Why pay enhanced company sick pay?

The majority of organisations are continually looking at ways in which they can recruit and retain talent within their organisation.  One aspect of this is to consider the benefits package that your organisation offers.  A good sick pay scheme will deliver support when it is needed and remains one of the most important workplace benefits. Which is one of the reasons why our report shows that only 13% of organisations do not pay above SSP when employees are absent from work due to ill health. 

The concerns raised by those organisations not paying enhanced company sick pay is that it may encourage increased levels of absence and the cost of funding sick pay if absence levels are high.  However in reality it is not the scheme but its management that impacts on absence levels.  Paying only SSP is often a case of letting the pay vs no pay manage the absence levels rather than ensuring managers actively managing absence.

The McGregor Theory, tells us that every organisation has a starting-point of either X - where management inherently distrusts staff to be able to operate autonomously and therefore enforces a range of processes and rules - or Y, where you trust your staff and build engagement.

Good managers know who's contributing well and who isn't, managers should hold return-to-work meetings to understand reasons for absence, identify problem areas, resolve underlying issues and offer support. Where an employee exceeds an absence trigger point, the company should implement a formal absence-management procedure that involves an attendance review meeting.

It is often helpful for employers to maintain some discretion over the payment of occupational sick pay, thus allowing management to decline to pay, or withdraw payment from, a particular employee if there is good reason to do so. Consistency and fairness in the application of the policy will be paramount.

A policy could, for example, state that payment of company sick pay may be withheld where:

  • the employee has less than six months'/one year's service with the organisation;
  • the employee has had more than a defined number of absences in the previous 12 months;
  • the employee has failed to comply with the company's notification and/or certification requirements (see Rules on notifying sickness absence and Self-certification and doctors' certificates);
  • the employee has unreasonably refused to attend a medical examination with an occupational doctor;
  • there is some evidence to suggest that the employee's absence was not for a genuine reason, although this would need to be investigated and discussed with the employee first;
  • the employee's incapacity has been caused by participation in dangerous sports or activities;
  • the employee has given false or misleading information concerning the reason for his or her absence;
  • the employee has, in the previous 12 months, been subjected to the employer's disciplinary procedure; or
  • the employee has gone off sick while under investigation for a disciplinary offence or immediately after being invited to attend a disciplinary hearing.

Need more help with absence management?

Our team of HR consultants are on-hand to offer advice guidance and practical support. For an informal discussion on how we can help you achieve the outcome you need, get in touch with our team of experts at 0808 168 5874.

 

Download the new report here.

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Head of Information & Research

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