If every worker relying on statutory sick pay (SSP) received a higher rate of employer sick pay from day one, the UK would benefit from a boost of up to £4.1 billion, according to a WPI Economics report for the Centre for Progressive Change.
The report, titled Making Statutory Sick Pay Work: The business, governmental and societal benefits of sick pay reform, addresses the direct business costs related to three possible reforms to SSP.
These reforms include the implementation of day-one sick pay to eliminate waiting days and enable immediate SSP claims during sickness absence, the elimination of the lower earnings threshold to allow SSP claims regardless of earnings level, and the increase in the rate of SSP.
The report revealed that more than half (52%) of people who rely on Statutory Sick Pay (SSP) are living in poverty, with workers on SSP receiving £1.10 an hour in the first week and less than £3 an hour thereafter.
It also found that workers who have access to paid sick leave are 28% less likely to be injured compared to those without it, leading to reduced costs for the NHS.
The report suggests that implementing the sick pay reform would specifically improve the benefits for those who are managing long-term health concerns. This change would aid in preventing a significant number of workers from quitting their jobs entirely.
It also indicates that the benefits of increasing sick pay outweigh the associated direct costs. These advantages include increased output, a decline in extended absences brought on by deteriorating pre-existing ailments, and better public health outcomes due to the reduction of illness-related employee absences.
Unum head of product proposition Clare Lusted said: “It is very welcome to see that many of the recommendations in this new report align with and build upon, the conclusions Unum reached last year in its own report on SSP. This highlights how universal the evidence base is for sick pay reform, as well as the evidence for how beneficial these changes could be.
“Designing a system that delivers proactive and effective employee support from day one will help improve the health and productivity of Britain’s workforce. The report concludes that, if every employee relying on SSP received a higher rate of employer sick pay from day one, the UK could see a boost of up to £4.1bn boost to UK business, government and the wider economy.
“While Unum also advocated for an increase in SSP and payment from day one, we also modelled the impact of changing the system to one of Statutory Sickness Support: an environment where workers who are off sick receive the health and wellbeing support, they need to improve their chances of a successful return to work. We found that this had the potential for a similar economic benefit of £3.9bn annually, plus savings for the Treasury of a further £1.3bn.
“As it currently stands today, 52% of people relying on SSP are living in poverty. This statistic alone should propel sick pay reform up the political agenda. We will continue to advocate for these changes for the good of the economy, employees and wider society.”
