A period of sickness can quickly become a financial concern, particularly where an employer says that no pay is due. Sick pay eligibility depends on more than whether someone is genuinely unwell. Employment status, the dates of absence, average earnings, the terms of the contract and the type of work arrangement can all affect the answer.
For employees and workers, the priority is to establish what should be paid and when. For employers, it is to apply the rules consistently, record absence properly and avoid making assumptions that create wage, discrimination or employee relations risks.
What does sick pay eligibility mean?
Sick pay eligibility refers to whether a person is entitled to payment while they are absent from work because they are incapable of doing their job due to illness, injury or a medical condition. In practice, there are two possible sources of entitlement.
The first is Statutory Sick Pay (SSP), which is the legal minimum paid by an employer to qualifying staff. The second is contractual sick pay, sometimes called company sick pay or occupational sick pay. This is any enhanced payment promised in an employment contract, staff handbook, workplace policy or collective agreement.
An employer cannot use a contractual scheme to provide less than the statutory minimum where SSP is due. However, a contractual scheme may be more generous, for example by paying normal salary for a defined period or by allowing staff to receive pay from the first day of absence.
The precise position can depend on when the sickness absence began. SSP rules changed from 6 April 2026, so it is particularly important to identify the relevant dates before reaching a view.
Statutory Sick Pay: the current starting point
For absences beginning on or after 6 April 2026, eligible employees can receive SSP from the first full day of sickness absence. The previous three waiting days no longer apply.
The earnings threshold has also been removed. This means lower-paid employees who were previously excluded because they did not earn enough can now qualify. SSP is paid at the statutory weekly rate, or at 80% of normal weekly earnings where that amount is lower. The weekly statutory rate is reviewed each April, so employers should check the rate that applies for the relevant tax year rather than relying on an old policy or payroll setting.
SSP can normally be paid for up to 28 weeks in a period of incapacity for work. Linked periods of sickness may be treated together where the gaps between absences are short enough under the statutory rules. This can matter where an employee returns briefly before becoming unwell again.
SSP is subject to tax and National Insurance in the usual way. It is paid through payroll on the employee’s normal payday, not as a separate benefit claim.
Who can qualify?
The label given to a role is not decisive. A person may be eligible where they are an employee for SSP purposes, including some agency workers, workers on fixed-term contracts and people on irregular hours. Agency workers may qualify after they have started an assignment, with the agency commonly responsible for payment, although the arrangement should be checked carefully.
A person who is genuinely self-employed will not receive SSP from a client. Nor will a worker necessarily be excluded simply because they work part-time, have variable hours or are on a temporary contract. The key issue is the legal working relationship and whether the statutory conditions are met.
Employees who are already receiving certain benefits, are on maternity leave, or have exhausted their 28-week SSP entitlement may not be entitled to further SSP. There are also particular rules for those working abroad, people with more than one job and employees returning from a period of family leave. These cases need a closer assessment rather than a broad assumption that sick pay is unavailable.
Contractual sick pay can change the outcome
Many disputes arise because an employee looks only at SSP while the contract promises something better, or because an employer treats a discretionary scheme as though it permits arbitrary decisions.
A contractual sick pay clause should set out the rate of payment, the length of entitlement, any qualifying service, notification requirements and whether SSP is included within the enhanced amount. For example, a contract may provide four weeks at full pay and four weeks at half pay, inclusive of SSP. It may also make enhanced pay conditional on compliance with the absence reporting procedure.
Employers can usually set reasonable conditions for enhanced contractual pay. They should apply them fairly, clearly and consistently. Withholding enhanced pay from one employee but not another in materially similar circumstances can create allegations of breach of contract, unlawful deduction from wages or discrimination, depending on the facts.
Discretionary wording does not give an employer unrestricted freedom. If a policy says payment is discretionary, decision-makers should still take account of the stated purpose of the scheme, previous practice, medical evidence and the individual circumstances. A decision that is irrational, inconsistent or connected to a protected characteristic may be open to challenge.
Notification, fit notes and medical evidence
Employees should follow the employer’s sickness reporting process, usually by contacting a manager as soon as reasonably possible on the first day of absence. A text to a colleague may not meet the requirement if the policy says that a manager or designated absence line must be contacted.
For the first seven calendar days of sickness, an employer can ask an employee to self-certify. If the absence lasts more than seven days, a fit note can be requested. A fit note may say that the employee is not fit for work, or that they may be fit for work if adjustments are made.
The second option should prompt a genuine discussion. Possible measures could include altered hours, temporary homeworking, lighter duties or amended tasks. An employer is not obliged to create work that does not exist, but should consider reasonable adjustments where the employee is disabled under the Equality Act 2010.
Employers should not routinely demand medical evidence beyond what is necessary, particularly where this causes delay or expense. Employees, meanwhile, should provide fit notes and information required by a reasonable policy promptly. Failure to follow a clear reporting procedure can affect contractual sick pay and may lead to an absence management discussion, but it does not automatically settle the question of statutory entitlement.
Sick pay, annual leave and long-term absence
Sickness absence does not stop statutory annual leave from building up. An employee can choose to take annual leave while off sick, which may allow them to receive holiday pay instead of SSP or reduced contractual sick pay for that period. This can be useful where contractual sick pay has ended, but it should be a genuine choice and properly recorded.
Long-term sickness requires careful management. Employers may need medical evidence, occupational health input and regular welfare contact, but should avoid pressuring an employee to return before they are well enough. Where a condition has a substantial and long-term effect on day-to-day activities, disability discrimination duties may apply. Reasonable adjustments may include a phased return, amended targets, additional equipment or a revised absence trigger.
There is no single absence length at which dismissal becomes safe. A capability dismissal can be fair in some circumstances, but only after a reasonable process, up-to-date evidence, meaningful consultation and consideration of adjustments and alternatives. Sick pay entitlement and the fairness of a dismissal are separate questions, although they often arise together.
Practical steps where pay is missing or disputed
An employee should first check the contract, sick pay policy, payslips and the dates of every absence. Ask payroll or HR in writing whether payment has been treated as SSP, contractual sick pay, annual leave or unpaid absence, and request the reason for any refusal. Keeping the question factual and dated can be valuable if the matter later becomes a formal grievance or wages claim.
Employers should review the individual’s employment status, payroll records, policy wording and medical documentation before responding. A prompt written explanation is usually better than a vague assurance that the matter is being investigated. If SSP is not payable, the employer should provide the appropriate written notice so the individual can consider whether they may be able to claim relevant state support.
Where the dispute involves pregnancy-related sickness, disability, mental health, inconsistent treatment or a threat of disciplinary action, early advice can protect both legal rights and working relationships. The financial amount may appear modest, but the wider implications for trust, absence management and potential tribunal claims are often not.
If you are unsure whether sick pay has been calculated correctly, obtain clear advice before accepting an explanation that does not match your contract or circumstances. Arcos Employment can help employees and employers assess the position, address immediate pay concerns and take proportionate next steps with confidence.