Zero Hour Contract Sick Pay – How to Calculate Entitlements

According to a report published in 2020, almost a million people across the UK worked under zero hours contracts in 2019. But what if you get sick? Are you entitled to zero hour contract sick pay?

equipment to help with sickness. medicines and thermometers.
Many employees believe or are told that zero hours contracts do not give the right to sick pay. However, in many cases, this is incorrect.

While these contracts provide both the employer and the employee with increased flexibility in theory – in practice, they can place a disproportionate burden on employees. Given the unpredictability of their work, many workers on zero hours contracts are unsure of their contractual rights regarding sick pay.

If you’re working on a flexible contract with no fixed hours, it’s important to understand what you’re entitled to, so you know what your employer should be providing.


Are Zero Hour Contract Workers Entitled To Statutory Sick Pay (SSP)?

There’s a misconception that people on zero hours contracts aren’t entitled to sick pay or other employee benefits. Although a zero hours contract looks different from one with fixed hours, employers still have the same responsibilities for workers’ statutory rights.

Zero hours workers are legally entitled to a National Minimum Wage, holiday pay, on call pay and compensation for travel while at work. In addition, a worker on a zero hours contract is legally eligible for statutory sick pay of £94.25 per week, provided that certain conditions are met.


Sick Pay Criteria for Zero Hours Workers

To receive SSP, zero hours contract workers must meet certain criteria. These are as follows:

  • They’ve started their employment. The employee has to have performed some contracted work for their employer before their leave of absence.
  • They’re ill for four days in a row. To qualify for statutory sick pay, a worker has to have been unwell for at least four days in a row. This is known as the PIW (period of incapacity for work) and includes non working days.
  • They’ve followed company regulations around reporting sickness. An employee’s contract will specify their employer’s rules for reporting illness. This usually means notifying the employer within seven days of sickness, though it can vary.
  • They earned more than £120 per week on average for the previous eight weeks. To qualify for statutory sick pay, a worker must earn a weekly average of £120 or more before tax.

When Is A Zero Hours Contract Worker Not Entitled To Sick Pay?

There are a few situations in which a worker on a zero hours contract is not entitled to SSP.

These include:-

  • If they’ve already received the maximum SSP from you. SSP can be paid for up to 28 weeks in total. This means that if someone has already received sick pay for this time, they’ll be unable to claim further SSP with the same employer.
  • If they’re receiving SMP (Statutory Maternity Pay). Should an employee already be receiving Statutory Maternity Pay or Maternity Allowance, they won’t be eligible for sick pay under their zero hours contract.
  • If they’re self employed. If a worker is classed as self employed, they cannot claim contractual sick pay.

How To Calculate Zero Hours Contract Sick Pay

You might be wondering how to calculate Statutory Sick Pay. Luckily, the process isn’t as confusing as it might seem. All you have to do is work out the average weekly earnings using the relevant period.

1. Check that the earnings exceed the minimum amount

If you earn less than £120 a week on average, you won’t reach the Lower Earnings Limit and won’t be eligible for SSP. So before you calculate your average weekly earnings in more detail, it’s necessary to determine whether you meet this minimum amount.

2. Work out the relevant period

After determining that you meet the minimum threshold, the next step relates to the relevant period. This is the period that will be used to determine your average pay.

Because hours on a zero hour contract generally vary, using a relevant period helps represent your weekly earnings as accurately as possible. The end of the relevant period is ordinarily your last payday before the first day of sickness. The relevant period is the eight weeks preceding this.

3. Calculate average weekly earnings

Employers can calculate their employee’s average weekly pay by adding up the total amount paid over these eight weeks and dividing it by eight.

If a worker’s average weekly earnings exceed £120, they are entitled to SSP.

For zero hours workers with less than eight weeks of earnings

If an employee has worked for their employer for less than eight weeks, they won’t be able to work out the relevant period in the way outlined above. They may still be eligible for SSP, however.

Rather than eight weeks, the average weekly earnings can be calculated using the entirety of the employment term so far.


Calculating Sick Pay – Example

Consider this example to help work out how sick pay should be calculated:

Sarah has worked for her employer for exactly five weeks and is paid weekly on a Friday. She fell ill and informed her employer immediately. As she lacks eight weeks of contractual work  her relevant period will necessarily be shorter. In this case, the relevant period begins with the start of contracted work.

To determine the relevant period, Sarah’s employer can simply divide her total earnings by the number of days she has worked in total (35 days), and multiply this number by seven, to determine her average weekly earnings.

The average is always calculated based on the calendar week, regardless of the actual number of days worked.


Penalties For Not Giving Zero Hours Contract Workers Sick Pay

Provided a worker meets the criteria outlined above, their employer is legally obliged to pay SSP. Employees are entitled to £94.25 per week for up to 28 weeks continuously. While employers can pay an amount that exceeds this, it is illegal to pay anything less than this.

If employers fail to pay SSP to their employees, they can be charged civil penalties by HM Revenue & Customs (HMRC). Here are just some of the charges that can be levied if an employer is found to be violating SSP:

  • £3,000 for refusal or failure to pay an employee SSP.
  • £300 if an employer fails to give their employee required information regarding their rights. An additional £60 can be charged for each daythat this failure continues.
  • £3,000 for the payment of an incorrect amount due to fraud or negligence.
  • £3,000 for a failure to keep necessary records, plus a further £300 for denying access to records.

You can read the complete list of employer penalties here.


FAQs

How much sick pay are workers on zero hours contracts entitled to?

Provided they meet the statutory sick pay criteria outlined above, a worker on a zero hours contract can receive £95.85 weekly for 28 weeks in total. This excludes the first three days of sickness, which is known as the waiting period.

Can I request sick pay from more than one job?

Provided you earn more than £120 per week from each job individually, you can claim SSP from two or more jobs at once. If you earn £120 with multiple incomes combined, you cannot take these two income sources as one to claim sick pay.

Should I receive sick pay for non working days?

You can only receive sick pay for days that you ordinarily would have worked these are known as your qualifying days. If your working pattern is irregular  so there are no contracted working days, per se you’ll agree on qualifying days with your employer. These are the days that you’ll receive SSP.

Further reading

Leave a Reply

Your email address will not be published. Required fields are marked *