Umbrella Company Sick Pay
Navigating the intricate landscape of UK tax legislation is no easy feat, especially for contractors. Amidst the myriad of regulations, one term stands out prominently: Umbrella Companies. But how does umbrella company sick pay work?
In this comprehensive guide, we delve deep into the heart of umbrella companies. Whether you’re an aspiring contractor or a seasoned veteran seeking clarity, this guide aims to empower you with the knowledge to make informed decisions and remain compliant.
What is Sick Pay?
Sick pay refers to the financial support provided to employees who cannot work due to illness or injury. In traditional employment settings, sick pay is a standard benefit employers offer as part of the employment contract. However, the landscape is different for contractors and freelancers operating through umbrella companies.
Sick pay entitlements through umbrella companies are limited compared to traditional employment arrangements. Employees in permanent roles may receive enhanced sick pay benefits as part of their contract, providing a higher level of financial protection during illness.
Umbrella Company Sick Pay
Sick pay is a crucial element of UK employment law. As an umbrella company worker, you are an employee of your umbrella company, so statutory sick pay is available to you. Unlike traditional employer-employee relationships, no enhanced sick pay is available.
If you fall ill and cannot work, your only avenue is to claim the statutory sick pay allowance of £109.40 per week, payable by your employer for up to 28 weeks. To be eligible for statutory sick pay:
- You must have a contract with the umbrella company as proof of employment;
- You must have spent some time working under the contract with the umbrella company;
- You must have been sick for four or more consecutive days, including weekends;
- Your average weekly earnings must be at least £123;
- You must inform your umbrella company about the illness within seven days, and the information provided must be error-free.
If you have been ill for longer than seven days, you must provide solid proof of your illness.
Once 56 days pass since the initial sickness period ends, employees become eligible for another 28-week maximum sickness period.
Sick Pay Insurance
Contractor Sickness Cover is an accident and sickness insurance for limited company contractors. It means you aren’t left out of pocket if you suffer a disease, sickness, or bodily injury preventing you from working.
Qdos have a policy starting from £27 per month.