IDS HR Study 852, August 2007

Sick pay

• Analyses key features of company sick pay schemes

• Summarises the statutory sick pay (SSP) framework

• Provides details of the better-than-statutory sick pay arrangements in 29 organisations

Sickness absence continues to present a substantial cost to employers – one current estimate puts the cost at more than £650 per employee per year .While employers are seeking to limit these costs with a range of absence control measures, most remain committed to supporting employees who are off sick, with many providing better-than-statutory sick pay arrangements.

The Study shows that most companies have a single sick pay scheme covering all staff. A minority operate more than one scheme, usually distinguishing between white-collar and manual staff; or where a new scheme has been introduced, between existing and new members of staff. Company sick pay is normally based around basic pay, inclusive of SSP, with entitlement increasing with length of service. Employees are typically admitted to schemes on entry, but in some cases a qualification period is required.

The detailed entries for each organisation across a range of sectors provide information on:

• scheme coverage and eligibility

• the level of benefit and its link to service

• notification and certification procedures

• situations where employers may withhold sickness benefit

• how companies deal with illness during annual leave

• options available for dealing with long-term sickness

• absence control methods.