Statutory Sick Pay and why it’s most likely driving Presenteeism in the UK

When I speak to employers of all shapes and sizes about sickness absence and the effect it has on productivity, they hardly ever talk about presenteeism, either in its physical or virtual forms. Maybe they read the article that came out some time ago that said that presenteeism had all but disappeared….. The data we have at SOHAS shows that it’s alive and well in both forms and it could be increasing.

I put together the data below some time ago for a different article that didn’t get published on the blog site. It might be slightly out of date, but it is good at comparing rates of SSP across Europe. Here are the stats:

What does the data show us about SSP?

Statutory Sick Pay in the UK;

• You can get £109.40 a week Statutory Sick Pay (SSP) for up to 28 weeks.
• If you’re eligible, you’ll be paid SSP for all the days you’re off sick that you normally would have worked, except for the first 3 days.
• Average weekly pay in the UK in February 2023 was £638 for full time work or £596 for regular work (ONS).

SSP equates to 18% of the average wage compared to 34% when it was introduced in 1983.

If you compare this rate with other European countries, the UK is ranked 40^th out of 42, as shown in the table below.

European rank	Country	Minimum sick pay	Maximum sick pay	Maximum period
1	Iceland	100%	100%	2 days for each week worked
2	Norway	100%	100%	52 weeks
3	Luxembourg	100%	100%	89 weeks
4	Denmark	100%	100%	30 days + 22 weeks
5	Austria	50%	100%	78 weeks
6	Germany	70%	100%	84 weeks
7	Finland	70%	100%	44 weeks
8	Switzerland	80%	100%	103 weeks
9	Monaco	€146.67 per day / 90% salary	€146.67 per day / 90% salary	Determined by employee contract
10	Montenegro	70%	100%	65 days
11	Lichtenstein	80%	80%	104 weeks
12	Belgium	25.88	100%	52 weeks
13	Bosnia and Herzegovina	80%	80%	52 weeks
14	Belarus	80%	100%	150 days
15	Albania	70%	80%	28 weeks
16	Slovenia	80%	80%	30 days
17	Sweden	77.60%	80%	52 weeks
18	Croatia	70%	100%	Unlimited
19	Netherlands	70%	70%	104 weeks
20	North Macedonia	70%	90%	30 days
21	Bulgaria	70%	80%	78 weeks
22	Latvia	75%	80%	52 weeks
23	Romania	75%	75%	40 weeks
24	Serbia	65%	100%	30 days
25	Hungary	60%	70%	54 weeks
26	Estonia	70%	70%	26 weeks
27	Poland	70%	100%	31 weeks
28	Spain	60%	75%	78 weeks
29	Lithuania	62.06%	100%	13 weeks
30	Czech Republic	60%	72%	56 weeks
31	Cyprus	60%	Varies upon social insurance	46 weeks
32	Portugal	55%	75%	156 weeks
33	Russia	50%	100%	Determined by a doctor
34	Andorra	53%	66%	156 weeks
35	Greece	50%	100%	Length of employment dependent
36	Italy	50%	66%	26 weeks
37	France	50%	50%	26 weeks
38	Slovakia	25%	55%	53 weeks
39	Ukraine	50%	100%	5 days
40	United Kingdom	£109.40 per week	£108.40 per week	28 weeks
41	Ireland	No legal minimum sick pay	100%	Determined by employee contract
42	Malta	€420.30 per month.	€420.30 per month.	22 weeks

Here are some examples of how SSP equivalents work in other countries.

Sweden

Sweden companies usually provide sick pay instead of the usual wage for the first two weeks an employee is ill. After two weeks, workers can apply for Försäkringskassan’s illness benefits. Sweden’s employees can receive between 25% and 100% of their salary for a maximum of a year.

Norway

Norway offers sickness benefits for up to a year. Workers that still cannot work after this time might receive additional assistance. Employers will cover the first 16 days.

The European Commission’s Employment, Social Affairs & Inclusion determines the amount paid to sick employees based on their salary from the previous three months. They might receive up to 100% of their pay for at least 31 days.

Denmark

According to the European Commission, the maximum amount of sickness benefit per week that Danish employees are entitled to, is DKK 4,550 (£512.37). This calculation is based on the employees’ weekly hours and average hourly income over the previous 3 months. As a result, workers receive up to DKK 120.54 (£13.91) hourly compensation. This may extend up to 22 weeks or longer, depending on the situation.

Germany

Germany follows similar rules as other countries connected to the European Commission.

Workers may receive sick pay during the time when a medical expert has confirmed an inability to work. This could occur for about 78 weeks over a three-year period per sickness. An employee might receive additional paid sick leave time under certain conditions, including new illnesses.

What are the rates of sickness absence in the UK and how does that compare to other European countries?

• In 2022 there were 185.6 million working days lost to sickness absence in the UK. This is an average of 5.7 days off sick per employee per year.
• By comparison in Germany (a country, that is on average 16% more productive than the UK) lost 18 days off sick per employee per year.

The UK has the 4^th lowest average number of employee sick days in Europe.

What does having such a low rate of SSP mean in the UK?

If you look at the figures above, then it seems that having a much lower rate of SSP isn’t a problem, if the average UK worker only takes a few days off sick a year. However, the issue in the UK appears to be that workers are coming into work whilst they are ill and are also using their holiday entitlement when they are unwell. This masks the real level of sickness absence, some of which will be work-related.

Presenteeism and Leaveism are not on the radar of most employers, where the only metric they record is the time employees are off sick. These issues are contributing to lower productivity and efficiency rates in the UK compared to other countries. This may be the reason why German employees take nearly three times as many days off sick but are still more productive than UK employees. Cary Cooper suggests that Presenteeism costs employers twice as much as sickness absence. CIPD (2018) also suggest that a third of UK employees have used annual leave instead of taking time off sick (Leaveism).

However, a survey conducted by the CIPD in 2021, does suggest that employers (including SMEs) are concerned about SSP, with 62% agreeing that the rate is too low.

In their report ‘Too ill to work, too broke not to’ Bond and Braverman (2018) argue that being on SSP creates an ‘income shock’, which can have a three fold impact of, exacerbating mental health conditions and prolonging recovery, encouraging employees to return to work from sickness absence too quickly or to not take the time off at all and finally, people can get stuck in a destructive cycle of sickness absence, worsening health and debt, where they lose their employment and some fall out of the labour market all together. I think that if the same report were to be run today, I suspect that there would be more people in the destructive cycle talked about above.

It could be argued that having a low rate of SSP, along with the 3-day qualifying period is one of the reasons why UK employees are coming into work when they are sick; they just cannot afford to be off sick from work. Those employees who do take time off sick from work are significantly financially impacted, which contributes to poorer health outcomes and impacts on the job market. 43% of workers would go into debt or be unable to pay their bills within two weeks of claiming SSP. 3 in 5 employees said that the reduction in impact from SSP had a negative effect on their mental health. Again, I suspect that this will now be higher than when I originally wrote the article.  

The rate of SSP in the UK drives further economic inequalities and marginalises disadvantaged groups further. 17% of workers (who are the lowest paid and most vulnerable) do not quality for SSP at all. In turn, 70% of employees who do not qualify for SSP are women. In the UK occupational sick pay schemes concentrate mostly on higher paying sectors, so those in low income or insecure roles are only eligible for SSP (if eligible at all, due to their working hours). Women, ethnic minorities, and disabled people are the biggest victims of the SSP crisis.

So, while this isn’t an academic paper, I think it’s reasonable to say that presenteeism is being driven in part by the low rate of SSP in the UK. The cost of living crisis has also had an impact, but it looks like there are employees who are unwell, who a few years ago would have been signed off sick by their GP, are coming into work. I don’t think that this is helpful for the employee or for the employer.

So, what we could to improve the issues around SSP? Here are some suggestions:

• Bring back the Percentage Threshold Scheme (PTS) This was abolished in 2014 to pay for the failed Fit for Work pilot and then never reinstated. This allowed employers to reclaim part of the cost of paying SSP. It wasn’t perfect, but it meant for small organisations, they could afford to partially backfill posts for staff who were off sick. It did have a sort of a comeback during the pandemic and then disappeared again. The cost of PTS was around £40m per year before it was abolished. Change it and bring it up to date to make it responsive to the needs of employers. 

• Pay SSP from day one and scrap much of the qualifying requirements; it makes no sense for someone on the minimum wage not to claim it from day one. It discriminates against and disadvantages the most vulnerable employees. 

• Increase the rate of SSP……£437.60 a month does not pay the bills for anyone.

• Redesign SSP to reduce the equality disparity for women, people with disabilities and certain ethnic communities, when they are off sick from work

• Look at the role of the insurance industry can play in bringing effective products to the market that are affordable for small businesses. I’ve looked and spoken to insurance brokers and the products on offer are not aimed at small businesses.  

• Support employers (especially micro or small employers) to think about health. At SOHAS, we are seeing a growing disconnect between employees and employers, around the support employees need maintain their health at work, and what employers are prepared to do to give them the right kind of support. For the majority of employees we give advice to, the adjustments they need to improve their workplace health are quite simple and often don’t cost a lot of money to implement. If more employers engaged with their employees about health and tried to adjust, then the issues about SSP are going to be reduced.