Chancellor’s Budget commits to sick pay refund for small business, but many still need better contingency plans

The Chancellor’s has announced that statutory sick pay (SSP) will be refunded to employers to help with the costs and disruption of coronavirus.

This is welcome news for many employers, according to London legal firm iLaw, but it warns that employers still must consider their staff contingencies for delivering continuity of business to customers.

During his speech, Rishi Sunak announced the cost incurred by businesses, who have someone off work for up to 14 days, will be refunded and that £2 billion will be allocated to help firms that lose income due to statutory sick pay.

This funding will be available to all firms that employ fewer than 250 staff members, meaning that the majority of the UK’s small and medium-sized businesses will be eligible.

Julian Cox, Head of Employment at iLaw, said: “Many employers may be breathing a sigh of relief following the Chancellor’s Budget today and it is good to see that the Government is taking a pragmatic approach by refunding the costs of SSP for staff for up to 14 days.

“This will hopefully allow most businesses to shoulder the cost better while relieving the pressure on employees to come to work when they may need to self-isolate.”

The latest move comes after the Government extended the period of SSP from the first day that a person reports an illness last week. SSP is to be paid by employers to all workers, including those working through an agency.

To be eligible for SSP a person has to be earning at least £118 a week and will be paid a minimum of £94.25 a week.

“While this measure should be welcomed it is worth noting that many large businesses will not benefit from this refund,” added Julian.

“Even those that do receive a refund are likely to see their business affected if they can’t offer continuity of service or supply to their customers.

“This is why they must have contingencies in place to ensure that their business can remain open and operational.”

Julian explained that this could include helping staff to work remotely from home or speaking with customers to make them aware of delays and focussing on essential work.