Government risks leaving key workers behind over sick pay rules

Thousands of key workers could be disadvantaged because of the risk of falling ill or self-isolation and its impact on the provision for Statutory Sick Pay (SSP), the Recruitment and Employment Confederation has warned.

Small and medium enterprises (SMEs) with less than 250 staff can be reimbursed for SSP if their staff cannot work due to Covid-19. However, this means most SME recruitment businesses supplying temporary workers are ineligible for the rebate because, while they are SMEs, they are responsible for placing many more temporary staff in other businesses. These include sectors that are vital to the economy right now such as logistics, education and care, where staff may not simply be able to work from home.

Creating opportunities for temporary workers in a pandemic is a big financial risk for small recruiters who could face a huge SSP bill if their temps are required to self-isolate. This means potentially fewer work opportunities being created for temps just as businesses need them.  As part of a six-step plan for recovery published today the REC is calling on government to ensure no one is left behind by funding SSP support for every worker.

Neil Carberry, Chief Executive of the REC said:

"The fight against the virus is being compromised by the failure to fund Statutory Sick Pay for every worker if they need to self-isolate. That's why extending it so that people on temporary contracts are not left behind is so important.

"Flexible work opportunities will help speed up the recovery - and covering SSP will help REC members provide more of them. For the client business, flexibility helps them navigate through - by creating temporary work opportunities to fill fluctuating demand when permanent positions would not be possible. Temporary work also helps individuals find earning opportunities quickly and gain new skills.

"This support is needed now to get businesses and workers through the pandemic. Our six-step plan outlines exactly what needs to happen next to lay the foundations of the recovery, including incentivising job creation and retention by reviewing the tax system including IR35, reducing employers National Insurance Contributions and working with the recruitment industry to support people who have lost jobs to transition into new, growing Industries."

One REC member (available for interview) which places temporary staff in healthcare, education and other sectors is ineligible for SSP support despite having just 13 members of staff. On any given week the company pays approximately 190 temporary staff, but because not all temps work every week, they are deemed by HMRC to have more than 250 staff on their payroll.

The REC has published a plan to help create jobs and promote business recovery. We are calling on government to work with us on the following six measures:

1. Reduce employer national insurance contributions to incentivise job creation
2. Fund SSP for every worker so no one is disadvantaged or left behind by this crisis
3. Open up the apprenticeship levy so people who need to retrain to find a job can be supported
4. Remove unnecessary red tape when finding work with the use of technology
5. Ensure key sectors to our economy can access the people they need, including through the new immigration system
6. Make recruitment experts central to all job finding support services.

ENDS

Notes to editors:

For more information, contact the REC Press Office on 020 7009 2157, 020 7009 2192 or pressoffice@rec.uk.com. Outside of regular office hours, please call 07702 568 829.