FCSA has submitted its response to the government’s consultation on strengthening Statutory Sick Pay (SSP). While FCSA supports the intent to provide better financial security for workers, the response highlights significant concerns about the unintended consequences these changes may have on employers, particularly umbrella companies and temporary workforce providers.
FCSA acknowledges the need to improve worker protections but stresses that the proposals, including removing the SSP waiting period and Lower Earnings Limit, could disproportionately impact businesses that support the UK’s flexible workforce. Umbrella companies, which employ many temporary workers, already operate on extremely tight margins and would face substantial financial pressure to meet these new requirements.
Key concerns include:
- Financial Burden on Employers: Umbrella companies cannot offset the additional SSP costs against revenue during non-assignment periods.
- Employer National Insurance Contributions: Umbrellas would bear additional liabilities as Employer NICs apply to SSP payments.
- Gaps in Assignments: Clarification is needed on who bears responsibility for SSP when a worker is not actively on assignment.
To mitigate the risks posed by these changes, FCSA recommends:
- Employer Cost Mitigations: Introduce rebates or subsidies for smaller businesses and umbrella companies to offset SSP costs.
- Clarification on Responsibilities: Clearly define SSP eligibility during assignment gaps and for workers with multiple employers.
- Sector-Specific Impact Assessment: Conduct a detailed review of how the reforms would impact umbrella companies and sectors reliant on temporary workers.
- Support for Employers: Provide guidance on managing sick leave policies to minimise potential abuse or administrative challenges.
FCSA also warns that the reforms could incentivise employers to move away from traditional employment models, relying more heavily on contracts for services. This shift could reduce worker protections and flexibility, ultimately undermining the goals of the reforms. Additionally, there is a risk of abuse with the removal of the waiting period, particularly in low-paid roles, as well as complex issues around workers holding multiple jobs claiming concurrent SSP.
FCSA continues to work closely with the government to ensure policies balance worker protection with practical implementation for businesses. Chris Bryce, Chief Executive of FCSA, stated: “While we welcome efforts to improve SSP, it’s essential to recognise the realities faced by employers in the temporary workforce market. The government must engage with the industry to refine these proposals and avoid unintended consequences that could harm both businesses and workers.”
Read the full consultation response below:
