Empowering the Freelance Economy

PINGDEMIC: A guide for contractors, freelancers and sole traders

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4.2 million self-employed workers do not qualify for SSP

The NHS Track & Trace “pingdemic” has dominated the UK news headlines over the past two weeks. The Freelance Informer reports on the latest statutory sick pay entitlements of contractors, freelancers and sole traders and the latest list of industries that are exempt from self-isolation.

  • The Labour Party has cited that ONS figures suggest 4.2 million self-employed workers, including gig economy workers, do not currently qualify for Statutory Sick Pay, alongside 1.9 million people who are currently employed but cannot claim it

😷 Workers, including contractors that are considered employees of an umbrella company, must be paid at least Statutory Sick Pay (SSP) if they cannot work because they’re self-isolating for any of the following reasons:

  • they have tested positive or have coronavirus (COVID-19) symptoms
  • someone in their household has symptoms or has tested positive for COVID-19
  • they have been advised by their doctor to stay at home before going into hospital for surgery
  • they have been told to self-isolate by an NHS test and trace service, because they have been in close contact with someone who tested positive

To be eligible for SSP, they must be off work for at least 4 days in a row, including any of their usual non-working days, according to Acas, the Advisory, Conciliation and Arbitration Service.

They’re entitled to be paid at least SSP for every day they’re off work. This is different to the usual rules for SSP where the first 3 days are unpaid. SSP is £96.35 per week and it is paid by your employer for up to 28 weeks.

Employers might offer more than SSP – ‘contractual’ sick pay. Check your employment contract or workplace’s policy to see if your organisation pays more than SSP.

However, not all contractors are eligible for sick pay if, for example, if they have already been receiving sick pay for 28 weeks. Others not eligible include those who have had a baby in the past 14 weeks, members of the armed forces and agricultural workers.

🤒 Do I get sick pay when I’m a limited company director/owner ?

As an employee of your own Limited Company, you’re entitled to Statutory Sick Pay (SSP). Currently, this stands at £96.35 per week for up to 28 weeks, once you have been off sick for four or more days in a row.

“The idea is that you pay yourself SSP and then reclaim it from payroll liabilities or HMRC directly as an employer. However, because most contractors opt for a low salary, high dividends model when it comes to paying themselves, this can result in little or maybe even no payroll liability. If this is the case for you, you may need to discuss your options with your accountant or HMRC,” according to Kingsbridge Contractor Insurance.

👷 Can I get sick pay as a sole trader?

As a sole trader (which will apply to freelancers more than contractors) you are not entitled to SSP, according to Kingsbridge Contractor Insurance You may be entitled to Employment and Support Allowance (ESA) for longer-term health conditions that affect how much you can work. You can find out more about ESA from GOV.UK.

It is then advisable to prepare for such occasions by putting away a certain amount of cash each month for a sick pay fund for yourself. However, if you employ anyone you should start thinking about running payrollemployer’s National Insurance, and employee benefits like holiday, maternity and sick pay.

One of the first things to do is register as an employer with HMRC, and getting set up on PAYE. This is so that you can deduct income tax and National Insurance from the wages of eligible employees, and pay it to HMRC on their behalf, according to The Accountancy Partnership.

🛬 No pay for self-isolating or quarantine after travel

Employees or workers are not entitled to Statutory Sick Pay (SSP) if they’re in self-isolation or quarantine after travel abroad and they cannot work from home. But an employer can choose to pay them sick pay – at the same rate as SSP or a higher rate – if they want to.

⚠️ Note that new laws do not cover a claim for SSP if you are asked to quarantine for 10-14 days after arriving in the UK from abroad.

Find out more about self-isolating after returning to the UK

🐱‍💻 Can I get sick pay if I have been pinged and work from home?

If you are contacted by the NHS test and trace service or another public body, you will be told to begin self-isolation either for between 10 and 14 days or until a specific date from your last contact with the person who has tested positive.

If you have been working from home and are still in work (that is, you are not furloughed), you should speak to your employer to discuss if it is practical for you to continue work from home during your period of isolation (assuming you remain well enough to do this). You should receive full pay, as normal, if you do this.

Low Incomes Tax Reform Group

SSP covers you both if you’re ill and if you need to self-isolate because you have been in direct contact with the virus. You may still need to provide a sick note or fit note if you start to show symptoms and you work from home. You can get one by calling NHS 111. You no longer have to go to a doctor to get a sick note or fit note, however, if you show no symptoms.

⚠️What if my employer does not have a company sick pay scheme?

If your company does not have a sick pay scheme in place or one that includes work-from-home status, then under new laws from 28 May 2020, you may be entitled to receive Statutory Sick Pay (SSP) for every day you are required to be in test and trace isolation (so from day 1), as long as you meet the eligibility conditions. This is the case whether or not you go on to develop symptoms.

Even if you have no contractual sick pay, if you’re an employee and earn at least £120 a week, you will be able to get £96.35 per week statutory sick pay (SSP) for up to 28 weeks. The government has announced SSP will be paid from the first day you are off sick if it is related to coronavirus.

💪 Support for employers

Some employers can claim back up to 2 weeks’ SSP they’ve paid to anyone because of COVID-19.

Find out more about claiming back SSP due to COVID-19 on GOV.UK

📲 Pingdemic: which industries are contractors exempt from self-isolation rules if they test negative for COVID?

Unless the government does a U-turn, from August 16 no one will have to self-isolate if they’ve come into contact with someone who tests positive for COVID and they’ve been double jabbed and show no symptoms of the virus.

However, as supermarket shelves became bare last week due to thousands of workers having to self-isolate after being pinged by the NHS Track and Trace app, the government has loosened its self-isolation rules for workers in critical sectors prior to August 16.

If you work in these industries and your company gets permission to not adhere to the 10-day quarantine rule of Track and Trace, you don’t have to self-isolate:

  • energy
  • civil nuclear
  • digital infrastructure
  • food production and supply
  • waste
  • water
  • veterinary medicines
  • essential chemicals
  • essential transport
  • medicine
  • medical devices
  • clinical consumable supplies
  • emergency services
  • border control
  • essential defence outputs
  • local government
  • prisons
  • defence staff such as soldiers
  • refuse collectors
  • some veterinary staff and telecoms organisations

📑It is advisable to verify your company’s eligibility and yours as an individual worker or contractor to not have to self-isolate if you work in any of the above-listed industries.

⚖️ SSP reform: is it happening to cover lower earners?

The government is not considering making any changes to statutory sick pay (SSP) despite the majority of businesses being in favour of reform, arguing now is “not the right time” – a decision experts have described as “very disappointing”, according to a report by People Management.

In its response to its consultation on health in the workplace, the report cited that the government said 75% of respondents agreed that SSP should be extended to employees currently earning below the current minimum earnings limit of £120.

The government report said this measure was supported by “small and large employer respondents alike”, with respondents believing a lower limit would better incentivise firms to take steps to reduce sickness absences.

Mike Brewer, chief economist and deputy chief executive of the Resolution Foundation, criticised the decision not to lower the earnings threshold, calling it “very disappointing and surprising”.

“The most concerning point about SSP is that two million earning less than £120 [per week] are entitled to no support when sick or self-isolating. This includes one in six workers in customer-facing sectors,” he said in a series of posts on Twitter, adding that inadequate sick pay had been linked to low compliance with self-isolation.

“During the first wave of Covid-19, care homes paying sick pay were less likely to have seen Covid-19 cases among residents,” he said.

🚚 Gig workers: do they have a right to sick pay?

The Labour Party has pledged to give gig economy workers the right to sick pay in its new employment rights charter.

The party said its “new deal for working people”, would mean an additional 6.1 million workers were eligible for statutory sick pay, many of whom are workers in the gig economy and are currently classed as self-employed, as well as the “genuinely” self-employed. This is likely putting them in the sole trader category.

Andy McDonald MP, Labour’s shadow employment rights and protections secretary, said: “Millions of workers are in insecure employment with low pay and few rights and protections, particularly key workers whose efforts got the country through the pandemic.”

Under Labour’s plans, three separate legal statuses of employment, each of which has different rights under the law, would be rolled into one status of “worker” and given the same rights, The Independent reported.

The party cited ONS figures, which suggest 4.2 million self-employed workers, including gig economy workers, do not currently qualify for Statutory Sick Pay, alongside 1.9 million people who are currently employed but cannot claim it.

🗯️Do you have something to say about SSP and how it impacts contractors and freelancers? Is your agency, end client or umbrella company adhering to SSP entitlements?

🤔Share your thoughts in our comments section or share your story by contacting editor@freelanceinformer.com. Anonymity will be respected.

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