Employers facing increase in sick pay costs!!

From 6 April 2014, employers will no longer be able to recover payments made for Statutory Sick Pay (SSP). HMRC has made the decision to abolish the Percentage Threshold Scheme (PTS), which is the scheme in place to provide SSP compensation for employers.

Currently an employer is entitled to recover some of the SSP paid to their employees if the total SSP paid in a tax month is greater than a set percentage of their gross Class 1 NICs (employers’ and employees’) liability for that month

Although PTS is being abolished from April 2014, employers will still be able to make claims for reimbursement of SSP under PTS (paid for sickness periods up to 5 April 14) until the end of the 2015/16 tax year.

In addition, the associated SSP record-keeping requirements will also be abolished at the end of 2013/2014. However, employers will still be required to maintain records for PAYE purposes and to demonstrate they are meeting their SSP obligations.

The decision to abolish PTS was made as a result of an independent review which found that the current scheme does not support the proper management of sickness absence in the workplace.

The Government has therefore decided to reinvest the money in a new Health and Work Service (HWS), due to be introduced by the end of 2014. The aim of this service will be to:

• help employees who have been on sickness absence for four weeks or more to return to work,
• support employers to better manage sickness absence among their workforce,
• give GPs access to work-related health support for the patients.

Employers, who want to avoid being faced with increasing costs, need to look carefully at how they manage sickness absence in their workforce. The first point of action will be to implement, or review, the company sickness policy.

Posted byLaura MurphyinCompany HandbookContract of employmentNICPayroll Software