Sick leave costs small businesses £1500 a year

Small businesses are paying an average of £1500 a year in sick leave.

The latest figures from the Federation of Small Businesses (FSB) show that the average cost of sickness absence in the last 12 months was £1500, but for nine per cent it was more than £5000.

The numbers show that the Government must introduce a small employer's relief for the recovery of statutory sick pay (SSP), according to the FSB. Fortunately, long-term sick leave does not affect smaller businesses that frequently, and the average small business experiences 2.4 days sickness absence per employee each year - much lower than the national average of 7.7 days per employee.

As it stands, the current system used to calculate how much SSP an employer can claim back is causing confusion. The Percentage Threshold Scheme means that small businesses are spending a long time doing difficult calculations, according to the FSB.

Holiday entitlement and sickness absence are the most difficult aspects of employment law according to 40 per cent of small businesses. As a result, the FSB is calling for recovery rules to be simplified so that micro firms can reclaim all SSP costs more easily.

The FSB wants the Government to introduce a small employer's relief for all firms with an annual National Insurance Contributions bill of less than £45,000 to recover SSP.

Commenting, John Walker, National Chairman at the Federation of Small Businesses, said:
"Small firms act like a tight knit family and value the contribution their staff bring to the business. And research shows that staff in smaller firms are more often committed and loyal. But sickness absence is one of the most complex pieces of employment law they have to deal with. It can also be costly with small businesses paying around £1,500 over the past 12months. The Government must provide a small employers relief for statutory sick pay in the same way they do for statutory maternity pay so those small businesses that experience a member of staff on long-term sickness absence, are not hampered and are given the support they need."