Your legal baseline is statutory sick pay — currently around £118.75 a week for up to 28 weeks — plus fair process and reasonable adjustments where disability applies. Good practice adds agreed keeping-in-touch contact, early occupational health input and a planned return. Insurance changes the picture: group income protection funds long absences and brings rehab support, while PMI often prevents them — the NHS median wait is 12.4 weeks.
- ✓SSP is ~£118.75/week for up to 28 weeks — under a quarter of average pay, then nothing.
- ✓Mental ill health drives 41% of long-term absence; early support beats late process.
- ✓One person off six months costs a 10-person firm far more than a year of group cover.
The legal baseline: SSP and not much else
When an employee goes off long-term sick, the statutory position is leaner than many owners expect. You must pay statutory sick pay — currently around £118.75 a week (the rate is reviewed each April, so check the current figure) — for up to 28 weeks, provided the employee meets the qualifying conditions. Employees self-certify for the first seven days; beyond that you can ask for a fit note from a GP or other healthcare professional. After 28 weeks, SSP simply stops.
Two other legal threads run through every long absence. First, the employee's contract continues: holiday accrues, and any contractual sick pay you've promised applies on top of SSP. Second, if the underlying condition amounts to a disability under the Equality Act — and many long-term conditions do — you have a duty to make reasonable adjustments and to avoid discrimination in how you manage the absence. When in doubt, assume the duty applies and take advice.
Keeping in touch: the good-practice core
The difference between long absences that end in a return and those that end in a dispute is usually contact. Silence from the employer reads as indifference or as pressure gathering; over-contact reads as harassment. The good-practice middle:
- Agree the pattern early. In the first week or two, agree frequency (fortnightly is common), channel and who calls — then keep to it.
- Keep work out of the foreground. Ask how they are, share team news if wanted, mention practical things like pay and fit-note dates. Don't chase deadlines.
- Signpost every support they have. EAP counselling, virtual GP, insurer rehab services, physio pathways — people forget what exists precisely when they need it.
- Write brief notes of each contact. Date, tone, anything agreed. If the absence later becomes a capability matter, this record protects everyone.
- Watch for the drift point. If there's no prognosis and no direction by about week four to six, that's the cue for an occupational health referral, not more waiting.
Mental ill health drives 41% of long-term absence, and contact is more delicate there — but more important. Ask the employee what contact they want, and honour it. The wider system this sits in — triggers, records, return-to-work conversations — is covered in our absence management guide.
The capability process, light-touch
Sometimes an absence has no foreseeable end, and a small employer genuinely cannot hold the role open indefinitely. Employment law recognises this — long-term ill health can ultimately be a fair reason for dismissal on capability grounds — but only after a fair process. In outline, the expected shape is:
- Get medical evidence. An occupational health assessment (typically a few hundred pounds pay-as-you-go) covering prognosis, what the employee could do, and what adjustments would help. Don't act on assumptions.
- Meet the employee formally. Share the evidence, discuss options — adjustments, redeployment, part-time or phased return — and genuinely consider them.
- Make reasonable adjustments where they'd work. Changed duties, hours, equipment or location; where disability applies, this is a legal duty.
- Warn before deciding. If nothing viable emerges, tell the employee clearly that continued absence puts their employment at risk, and allow time and further review.
- Decide with a right of appeal. Dismissal on capability grounds is the last step, with notice, only after the steps above are documented.
Insure against the absence that hurts most
How GIP and PMI change the picture
Insurance doesn't remove the process above, but it transforms the pressure around it. Group income protection replaces a portion of salary — commonly half to three-quarters — after a waiting period, for long periods. That dissolves the SSP income cliff, takes the "we can't afford to keep paying" pressure off the employer, and adds the insurer's rehabilitation team, who plan phased returns because early returns save them money. PMI works earlier in the chain: with an NHS median wait of 12.4 weeks — and 1 in 12 waiting over 38 weeks — private treatment in days-to-weeks often stops a medium absence becoming a long one at all.
| Scenario | Without insurance | With GIP + PMI |
|---|---|---|
| Income after week 6 | SSP: ~£118.75/wk | GIP: typically 50–75% of salary after the waiting period |
| Wait for treatment | NHS median 12.4 wks; 1 in 12 over 38 wks | Consultation in days, routine surgery 2–6 wks |
| Return-to-work support | Employer alone (+ paid OH referrals) | Insurer rehab team and phased-return planning included |
| Employer cost exposure | SSP + cover + open-ended uncertainty | Premiums: GIP ~0.25–1% of payroll; PMI avg ~£57/head/month |
The one-person-out maths
Run the numbers for a ten-person firm with someone on £35,000 off for six months. SSP costs around £3,100 over 26 weeks. Cover costs more: a temp at even modest day rates runs £15,000–£20,000 for the period, or colleagues absorb the work at the price of overtime, errors and their own rising absence risk. Add management time, possible recruitment (agency fees commonly 15–25% of salary if they don't return), and lost output — a realistic all-in figure is £25,000–£40,000, borne by a firm that has lost 10% of its capacity.
Against that, insuring the whole ten costs roughly £6,800–£9,000 a year for PMI and a four-figure sum for GIP — generally allowable against corporation tax. One prevented or shortened long absence can repay several years of premiums. That's the cold case; the warm one is that how you treat your sickest employee is watched closely by the other nine. For prevention and the day-to-day system, see the absence management guide and return-to-work programmes.
Frequently asked questions
What sick pay does a small employer legally have to pay for long-term sickness?
Statutory sick pay — currently around £118.75 a week, reviewed each April — for up to 28 weeks for qualifying employees, plus any contractual sick pay you've promised on top. After 28 weeks SSP ends, and the employee moves to state benefits unless the employer offers or insures something better.
How often should I contact an employee on long-term sick leave?
Agree it with them early — a fortnightly call is a common baseline. Keep the tone human rather than operational, signpost support like EAP counselling and insurer rehab services, and keep brief notes. Both silence and over-contact cause harm; an agreed, predictable pattern avoids each.
Can a small employer dismiss someone on long-term sick leave?
Ultimately yes — long-term ill health can be a fair capability reason — but only after a fair process: medical evidence, consultation meetings, genuine consideration of adjustments and redeployment, clear warning, then decision with appeal. Where disability applies the risk is high, so take HR or legal advice at each formal step. This isn't legal advice.
When should a small employer get occupational health involved in long-term sickness?
Around week four to six if there's no clear prognosis, and always before any formal capability step. A pay-as-you-go assessment — typically a few hundred pounds — gives you an independent view of prognosis, what the employee could do, and which adjustments would genuinely help.
How does group income protection help with long-term sickness absence?
It replaces a portion of the employee's salary — commonly 50–75% — after a waiting period, solving the cliff-edge from SSP's ~£118.75 a week. It also brings the insurer's rehabilitation team into the case, planning phased returns, because every early return shortens a claim the insurer is funding.
Does private medical insurance prevent long-term sickness absence?
Often, for treatable conditions — because much long absence is waiting. Against an NHS median of 12.4 weeks (and 1 in 12 waiting over 38), PMI gets a consultation in days and routine surgery in two to six weeks, so a knee, hernia or gallbladder absence measured in months becomes one measured in weeks.
What does one employee's long-term sickness cost a small business?
Far more than the sick pay. For a £35,000 employee off six months, SSP is only ~£3,100 — but temp cover, management time, lost output and possible recruitment push the realistic all-in cost to £25,000–£40,000. That's the figure to weigh against insuring the whole team for a few thousand a year.
What are reasonable adjustments for an employee returning from long-term sickness?
Whatever reasonably removes the disadvantage their condition creates: phased hours, amended duties, remote or hybrid working, equipment, extra breaks, or redeployment to a suitable role. Where the condition amounts to a disability, considering adjustments is a legal duty — refuse a fit note's recommendation only after taking advice.
Do employees accrue holiday while on long-term sick leave?
Yes — statutory holiday keeps accruing throughout sickness absence, and employees can usually carry untaken leave into the next year if sickness prevented them taking it. Factor accrued holiday into return planning; some employees use it to top up pay or ease the transition back.
What happens after 28 weeks when SSP runs out?
Employer obligations to pay SSP end, and without contractual sick pay or insurance the employee moves to state benefits — while their employment, holiday accrual and your duty to manage the absence fairly all continue. Group income protection exists precisely to bridge this gap, typically paying a salary percentage for as long as the claim qualifies.