What is Occupational Sick Pay?
Although optional for employers, having occupational sick pay (OSP) in place means you can give eligible employees pay during sickness absence beyond statutory sick pay (SSP). You decide who qualifies, how many OSP days are available, and how OSP interacts with SSP.
There are a number of variables to consider when setting up occupational sick pay for your workplace:
Qualifying period - the amount of time an employee has to have been working in the company before becoming eligible for occupational sick pay.
OSP calculation method - It can be set up as an addition or a top-up amount
The entitlement - the number of sick leave days on which qualified employees are paid at the set rate
Allowance reset method - how OSP entitlement is granted. Choose from fixed periods like annual leave year, employee start date or a rolling period
The rate at which OSP days are paid to each employee - choose a percentage of the base salary that OSP days will be paid
Allowance Progression - The number of OSP days can increase in line with the length of service, or it can be fixed.
As OSP is an optional benefit, there's no legislation or duty to provide a specific minimum qualifying period or maximum number of paid sick leave days per year. It should be based on the contract of employment.
Feature Overview
✅ You can set up your OSP scheme at a company level and this will automatically apply to any employee who is away on sickness leave and eligible for your occupational scheme.
✅ Admins can enable a qualifying period so that OSP only applies to employees who have been working at the company for a certain length of time.
✅ Occupational Sick Pay can be chosen to reset every year based on your annual leave year, employee's date or on a defined rolling period.
✅ The rate at which OSP is paid can be fully customised within PayFit. Choose up to 3 pay rates for the given entitlement of OSP.
✅ OSP entitlement can be increased automatically for each employee based on tenure. Choose up to 3 levels of OSP entitlement that will update depending on how long an employee has worked at the company.
✅ The OSP calculation method can be set up as an additional amount calculated as a percentage on top of SSP or a top-up amount on top of SPP.
✅ Three pay rate structures can be set up based on a percentage of the employee pay as employees use more sick days throughout the year.
✅ Changes in the company’s OSP policy won't affect customs policies set up at the employee level.
❌ You can only set up one OSP policy at the company level. If you offer multiple schemes, you'll need to adjust this in the employee's record.
❌ Any updates to your OSP settings apply from the current month onward. If you're adding sick leave for a previous month and want to backdate the employee's OSP entitlement, please raise a ticket via our Contact Us form and a member of our team can update this for you.
Enabling OSP for your company
From the left, choose Company Settings, then Leaves settings.
Under the Sickness leave policy section, click Edit policy.
Under the OSP section, choose Yes.
Follow steps 1-3 (Eligibility, Allowance, Pay rates) by confirming your preferences.
Click Save.
Once company OSP settings are changed, then these will only apply to employees that are currently on the company settings policy. If customs employee policies need to be amended, this will need to be done at the employee level.
Setting up custom OSP policies
You can disable OSP or set a custom policy for specific employees.
Go to the employee’s profile > Leaves section > Under the Sick Leave section, click Customise OSP policy.
Choose to disable OSP or create a custom OSP policy (eligibility wait period, entitlement period, days, tiers, and rate bands as needed).