What is Occupational Sick Pay?

Occupational sick pay is a payment from employers that provides their employees with financial support during periods of illness or injury. It often offers more generous compensation than statutory sick pay, covering a percentage of their salary for a set amount of time.

Croner are experts when it comes to HR, employment law and Health and Safety, contact our team now on 01455 858 132.

When running your business, we understand that sickness amongst your employees is inevitable at some point. Occasionally, one or more of your employees may need to take a longer absence due to being unable to work, such as illness or injury. When this happens, they are entitled to some form of sick pay.

Depending on the employee's contractual terms, they may be eligible for either (or both) of the two types of pay available: Statutory sick pay (SSP) and Occupational sick pay (OSP).

• What is occupational sick pay?
• What is occupational health?
• What happens after SSP runs out?
• Is statutory sick pay taxable?
• Occupational sick pay policy
• Expert HR support from Croner

What is occupational sick pay?

Occupational sick pay can also be referred to as OSP payment or company sick pay. In other words, it’s payment for absence by the company the employee works for. It’s a contractual payment you can choose to provide your employees. If you decide to go ahead with OCP payment for your employees, the payment should be equal to or greater than the SSP they’d normally receive.

What is occupational health?

Occupational health is a term used to describe health in the workplace, and occupational ill health is used to describe various forms of health issues relating to work. This can be because of exposure to work hazards or prolonged work activities.

Occupational ill health can also relate to injuries or illnesses not caused by the workplace but made worse because of it. For example, asthma triggers brought on by exposure to dust.

According to the HSE, the leading cause of occupational ill health includes:

• Back injuries.
• Mental health issues.
• Upper limb disorders.
• Occupational asthma or asthma attacks.
• Occupational dermatitis.
• Hearing loss.

What happens after SSP runs out?

In situations where an employee isn’t eligible for SSP but require continued absence from work, they may be able to apply for Universal Credit or Employment and Support Allowance (ESA).

These options provide employees with financial support while they’re off work due to ill health or disability. Ultimately, as the employer you are responsible for the health and wellbeing of your workforce.

If one of your employee’s SSP is coming to an end, you must then fill in and send the SSP1 form to them. You're required to do this either within seven days of the SSP ending or on or before the beginning of the 23rd week.

It’s important to remember, if an employee doesn’t qualify for SSP, you’re required to send the SSP1 form within seven working days of the employee going on sick leave.

Returning to work after OSP payment

An employer must ensure that employees’ return to work after either a short or long-term absence is managed correctly.

Long-term absence

Regardless of whether the employee has received OSP/CSP, it’s important to meet with the employee if they have been off on long term sick.

The meeting can discuss reasonable adjustments,  company updates, occupational health referrals and EAP if it’s available.

Is statutory sick pay taxable?

Yes. It’s (statutory and occupational) ‘work-related earned income’, so it forms part of an employee’s taxable income. In some instances, occupational sick pay can be equivalent to full pay for a set period.

Your company determines the rules for claiming OSP payment. Although a common practice is to allow employees to claim for occupational sick pay upon successful completion of their probation period (usually three to six months).

Other rules to consider include:

• Requirements to qualify for OSP.
• Process for reporting and documenting sickness.
• Duration of sickness absence.
• Submission of a doctor’s note/fit note.
• Occupational health assessments.

To avoid claims of discrimination, it’s essential to treat all employees fairly when creating the rules relating to sick pay.

Occupational sick pay policy

It’s important to have a policy in place that clarifies your employees’ entitlements in relation to sick pay.

The policy should highlight the conditions under which entitles your staff to occupational sick pay and SSP and should also include the process for requesting it.

If you decide to provide your staff with occupational sick pay, it’s strongly advised to have a company sick pay policy in place. A consistent sick pay policy reduces the potential for discrimination claims and an employment tribunal.

Expert HR support from Croner

Croner are experts when it comes to people management, occupational sick pay, and employment law. We have over 80 years of experience within the industry, so you can put your trust in us. Need advice on SSP or sick leave? Contact our team today on 01455 858 132.