Extend sick pay rebate to larger firms, recruitment bodies urge

Treasury financial secretary Jesse Norman
Ollie Millington / Rmv/Zuma Press/PA Images

Bodies representing the recruitment sector have urged the Treasury to extend the 14-day statutory sick pay rebate to businesses with large numbers of staff on their payroll, or make special dispensation for recruitment firms.

In a letter to financial secretary to the Treasury Jesse Norman, recruitment bodies called for the Covid-19 SSP rebate to be offered to all organisations, because many were having to cover the cost of self-isolation related sickness absence for the agency staff they provided.

Employers with fewer than 250 staff have been able to claim back the SSP paid to staff for coronavirus-related reasons since March.

The bodies – the Recruitment and Employment Confederation (REC), Association of Labour Providers (ALP), the Association of Professional Staffing Companies (APSCo) and recruitment network TEAM – say that if extending the scheme is not possible, the recruitment sector should be recognised as requiring specific government support for SSP payments for coronavirus-related absence.

The letter says: “Our members are in a unique position; they may have few members of their own staff but a sizeable payroll of agency workers. Our largest members have agency worker payrolls running into the tens of thousands, dwarfing their direct employee numbers.

“This particularly exposes them to the financial impact of SSP, an employer cost they are unable commercially to claim back from end-user clients in most cases.

“Our members are particularly concerned about the impact of self-isolation, in particular ‘test and trace’ absences, in the coming months into winter and beyond. Furlough support will end, meaning no ongoing financial support for payrolls, people will return to their normal workplaces and children to school. This will result in far greater number of SSP claims than members are currently experiencing during lockdown.”

It says some organisations “simply do not have the cashflow to finance high numbers of SSP payments and this could become a solvency issue”.

A HM Treasury spokesperson said: “We recognised that firms of all sizes would face significant financial pressure due to the pandemic. That is why we have introduced a raft of business support measures including the job retention scheme, billions paid in grants and loans, tax deferrals and business rates relief.

“The design of the Statutory Sick Pay Rebate scheme recognises that small and medium sized firms would be placed under more financial pressure if Covid-19 led to significant staff absences. However, since its introduction, a full range of business support measures have been made available to UK businesses, including larger firms, who may be facing disruption as a result of Covid-19.”

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