Call for sick pay rebate as UK loses 149 million working days to sickness

With official figures showing that the sickness absence rate in the UK rose to the highest in over a decade last year, the Federation of Small Businesses (FSB) has reiterated its demand for a small business sick pay rebate.

According to the figures published Friday (April 29) by the Office for National Statistics (ONS), the sickness absence rate in the UK in 2021 rose to 2.2 per cent, from a record low of 1.8 per cent in 2020; this is the highest it has been since 2010, when it was also 2.2 per cent.

An estimated 149.3 million working days were lost because of sickness or injury last year, equivalent to 4.6 days per worker, with Covid-19 accounting for nearly one in four of all absences.

Responding, FSB policy and advocacy chair Tina McKenzie noted that the average cost of sickness absence, including finding cover, stands at more than £3,000 a year for small employers, equating to £5 billion across the small business community as a whole.

“With operating costs surging in the round, small firms need more financial assistance to go on doing right by their staff when they’re unwell,” McKenzie added.

“On the day that the government has announced yet more help for big energy-intensive companies, we’re asking policymakers to take forward our joint proposal with the TUC for a small business sick pay rebate which will support those who have received no assistance whatsoever with utility bills.”

In February, FSB and the Trades Union Congress (TUC) have called on the chancellor to deliver sick pay for all and to support employers with the associated costs by making the employer rebate permanent.

The lower earnings limit means that statutory sick pay is only available to employees earning £120 per week or more – leaving two million low-paid workers, mostly women, without any sick pay at all.

“Allowing small community businesses to recover sick pay costs will give them that much more space to invest, recruit and retain staff, spurring our economic recovery from the grass roots up,” McKenzie said.

At the end of last year, the chancellor announced a rebate for small employers on sick pay. FSB is calling for this rebate to be both made permanent and adjusted to cover all sickness absence, alongside the removal of the lower earnings limit.