What is Occupational Sick Pay (OSP)?

121 HR Solutions was approached by a client who was reviewing their benefits package and wanted to consider occupational sick pay as part of an overall benefits package for employees.

Occupational Sick Pay (OSP) is provided by employers who want to provide more than statutory sick pay to employees. If the entitlement is stipulated in the contract of employment it becomes a contractual entitlement; however some employers create an occupational sick pay scheme which is discretionary – and based on particular circumstances. 

OSP is usually inclusive of SSP, which is the minimum statutory entitlement for an employee during sick leave.  An employee’s entitlement to OSP sick pay will depend on the policy the company creates and is also usually dependent on eligibility requirements such as:

  • Length of service
  • Exclusions such as an employee losing entitlement following elective surgery or if they are absent due to injury sustained while engaged in professional sports.

An employer will often provide full pay for a set number of weeks which may then be followed by a period of half pay before going onto unpaid leave. For example, for the first year of service, and following a probationary period, an employee may be entitled to one month’s full pay with one month’s half pay, increasing to 6 months full pay and 6 months’ half pay after 5 years of service. The choice of entitlement is entirely dependent upon the employer and varies based on the size of the employer and its industry. 

It is also worth remembering that in the context of long-term sick leave, an employee is likely to have unused annual leave entitlement as this still accrues during any period of sickness absence.

Where the employee is no longer eligible for any form of paid leave, they may become eligible to claim benefits from the government, such as Universal Credit or Employment and Support Allowance (ESA).

It is essential to treat all employees fairly when creating the rules relating to sick pay. It is therefore advisable to have in place a clear policy, clarifying your employee’s entitlements in relation to both OSP and SSP. It should also include the process for requesting sick pay. 121 HR Solutions was able to assist their client in developing a fair and affordable policy which ensured that they remained competitive in their market. 

If you are thinking of introducing or updating your policy in relation to OSP please contact us at enquiries@121hrsolutions.co.uk and we can discuss.

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