Sick Pay on Zero-Hours Contracts (UK)

Zero-hours contracts are often misunderstood by both managers and workers, particularly when it comes to sickness absence and pay. A common assumption is that the absence of guaranteed hours also removes entitlement to sick pay. Under UK employment law, that assumption is wrong and creates compliance risk for employers.

Sick pay entitlement for zero-hours staff depends on legal status, earnings patterns and how statutory rules are applied in practice. Employers must distinguish clearly between Statutory Sick Pay (SSP), which is a legal minimum, and any contractual or occupational sick pay, which is a matter of contract and policy. Errors frequently arise where employers misunderstand average weekly earnings calculations, qualifying days or the treatment of irregular rotas.

What this article is about

This article provides a comprehensive employer-focused legal overview of whether you get sick pay on a zero-hours contract. It explains how SSP applies to zero-hours arrangements, how eligibility is assessed for workers with variable hours and the practical steps HR and payroll teams must take to remain compliant. It also addresses common risk areas, including disputes, record keeping and fairness considerations.

You can read our extensive guide to the Zero Hour Contract here >>

Section A: The legal position on sick pay for zero-hours staff

Zero-hours contracts do not remove an individual’s entitlement to statutory employment rights. The key legal issue is not the absence of guaranteed hours, but whether the individual is classed as an employee for Statutory Sick Pay purposes and whether the statutory eligibility criteria are met.

1. Statutory Sick Pay is based on status, not hours

Under UK law, entitlement to Statutory Sick Pay does not depend on the number of hours worked or whether those hours are guaranteed. SSP applies to individuals who are classed as employees and who meet the statutory conditions. Many individuals engaged on zero-hours contracts will fall within the employee category, particularly where there is an ongoing obligation to accept work when offered and where the employer exercises control over how and when work is performed.

Misclassification is a common risk area. Employers sometimes assume that zero-hours staff are “casual” or outside SSP altogether. In practice, if payroll operates PAYE and the individual is not genuinely self-employed, SSP entitlement must be considered each time sickness arises.

2. Workers, employees and genuinely self-employed individuals

Most zero-hours arrangements sit within either employee or worker status. SSP is only payable to employees. However, HMRC applies a statutory test for SSP purposes which may classify some zero-hours workers as employees even where their wider employment status is disputed.

Genuinely self-employed individuals are excluded from SSP. This distinction depends on substance, not labels. If the individual is required to perform work personally, cannot substitute freely and is integrated into the business, treating them as self-employed for SSP purposes is likely to be incorrect.

3. SSP as the legal minimum

Statutory Sick Pay represents the minimum legal obligation. Employers may choose to offer contractual or occupational sick pay, but this is separate from SSP and must be clearly defined in contracts and policies. Where enhanced sick pay is offered, employers must ensure it is applied consistently and in line with equality law obligations.

SSP cannot be contracted out of. Any contractual wording suggesting that zero-hours staff are excluded from SSP is unenforceable and exposes the employer to payroll errors, unlawful deduction claims and potential HMRC scrutiny.

4. Employer responsibilities and enforcement

Employers are responsible for assessing SSP eligibility, making correct payments through payroll and keeping appropriate records. Where SSP is wrongly refused or miscalculated, individuals can seek a formal decision through HMRC and employers may be required to correct payments retrospectively.

From a compliance perspective, treating SSP correctly for zero-hours staff is not optional. It is a core payroll and HR obligation that must be applied consistently across the workforce.

Section A summary

Zero-hours contracts do not remove statutory sick pay rights. SSP entitlement turns on employment status and statutory criteria, not guaranteed hours. Employers must assess eligibility properly, avoid misclassification and understand that SSP is a legal minimum which cannot be excluded by contract.

Section B: SSP eligibility and how it works with variable hours

Applying Statutory Sick Pay to zero-hours arrangements is often where employers encounter difficulty. Variable hours, fluctuating earnings and irregular rotas require careful application of the SSP rules. Errors typically arise not because SSP does not apply, but because the eligibility tests are misunderstood or applied inconsistently.

1. The core eligibility requirements

To qualify for SSP, a zero-hours employee must meet the standard statutory conditions. They must be classed as an employee, have done some work under their contract, be sick for at least four consecutive qualifying days and earn at least the lower earnings limit on average.

A qualifying sickness period only arises once the employee has been incapable of work for four or more consecutive days, including non-working days. For zero-hours staff, this often causes confusion, particularly where no shifts were scheduled during part of the sickness absence. The absence may still count as a qualifying period even if no work was planned.

2. Average weekly earnings and irregular pay

Average weekly earnings are a key eligibility test for zero-hours staff. Employers must calculate earnings over the relevant period, typically the eight weeks prior to the sickness, to determine whether the lower earnings limit is met.

Where hours vary week to week, employers must use actual earnings rather than assumed hours. If the individual’s average weekly earnings fall below the statutory threshold, SSP is not payable, even if the individual would otherwise qualify. This assessment must be done each time a new period of sickness arises, as earnings patterns may change.

Incorrect earnings calculations are one of the most common causes of SSP disputes involving zero-hours contracts.

3. Qualifying days and rotas

SSP is only payable for qualifying days. These are the days an employee normally works or would normally be required to work under their contract. For zero-hours staff, identifying qualifying days requires a clear understanding of the working pattern in practice.

If an employee is regularly scheduled for certain days, those days will usually be treated as qualifying days. Where working patterns are genuinely ad hoc, employers must take a reasonable and consistent approach, often by looking at recent rotas or established working arrangements.

Failure to identify qualifying days properly can lead to underpayment or overpayment of SSP.

4. Waiting days and linked periods of sickness

The first three qualifying days of a sickness absence are normally unpaid waiting days. SSP becomes payable from the fourth qualifying day onwards. This rule applies equally to zero-hours staff.

Where periods of sickness are linked, meaning they are separated by eight weeks or less, waiting days do not apply again. Employers must track sickness records carefully to ensure waiting days are not incorrectly reapplied to repeat absences.

5. SSP rates and payroll processing

SSP is paid at a fixed weekly rate set by law and processed through payroll in the same way as wages. For zero-hours employees, SSP is usually converted into a daily rate based on the number of qualifying days in the week.

Payroll teams must ensure SSP is recorded correctly, payslips are accurate and payments are made on time. SSP errors can result in unlawful deduction claims and retrospective correction obligations.

Section B summary

Zero-hours employees can qualify for SSP, but eligibility depends on average weekly earnings, qualifying days and correct identification of a qualifying sickness period. Variable hours do not prevent SSP, but they require careful and consistent application of the rules to avoid compliance errors.

Section C: Contractual sick pay, policies and fairness considerations

While Statutory Sick Pay sets the legal baseline, many employers operate contractual or occupational sick pay schemes. Zero-hours arrangements require particular care to ensure contractual terms are clear, applied consistently and do not create unintended legal or employee relations issues.

1. Contractual sick pay and zero-hours contracts

There is no legal obligation to provide contractual sick pay to zero-hours staff beyond SSP. However, where an employer chooses to do so, the terms must be clearly set out in the contract or sickness absence policy.

Ambiguity creates risk. If contracts are silent or unclear, zero-hours staff may argue that enhanced sick pay applies by custom and practice. Employers should state expressly whether contractual sick pay applies, how eligibility is assessed and whether it is discretionary.

2. Interaction between contractual sick pay and SSP

Where contractual sick pay is offered, it will usually incorporate SSP, rather than sit alongside it. Employers typically offset SSP against contractual payments so that total pay does not exceed the contractual entitlement.

Payroll processes must reflect this clearly. SSP should still be recorded even where contractual sick pay is paid, as it remains a statutory payment. Failure to do so can create record-keeping issues and complicate future SSP entitlement assessments.

3. Fairness, consistency and discrimination risk

Zero-hours staff must not be treated less favourably without objective justification. While different sick pay arrangements for different categories of staff can be lawful, they must be capable of justification and applied consistently.

Particular care is required where sickness absence relates to disability. Employers must consider reasonable adjustments and avoid rigid application of policies that could disadvantage disabled workers. Inconsistent treatment of zero-hours staff can give rise to discrimination claims, even where SSP obligations have technically been met.

4. Managing expectations and communication

Many disputes around sick pay arise from misunderstanding rather than legal entitlement. Clear communication at the outset of the engagement is critical. Zero-hours staff should understand what happens if they are sick, how SSP is assessed and what evidence is required.

Well-drafted policies and consistent manager training significantly reduce the risk of grievances and payroll disputes.

Section C summary

Contractual sick pay for zero-hours staff is optional, but if offered it must be clearly defined and consistently applied. Employers must manage the interaction with SSP carefully and remain alert to equality and discrimination risks, particularly in relation to disability-related absence.

Section D: Compliance controls and handling SSP disputes

For employers, the main risk around sick pay on zero-hours contracts is not the law itself, but weak systems and inconsistent decision-making. Robust compliance controls and clear dispute handling processes are essential to reduce legal exposure and maintain trust.

1. Record keeping and audit requirements

Employers must keep adequate records to demonstrate SSP compliance. This includes sickness dates, qualifying days, average weekly earnings calculations, SSP payments made and any medical evidence received.

For zero-hours staff, records of rotas, shifts offered and shifts accepted are particularly important. These documents are often relied upon to determine qualifying days and to justify SSP calculations if challenged by the individual or reviewed by HMRC.

Poor records make it difficult to defend SSP decisions and increase the risk of retrospective correction.

2. Handling disagreements about SSP entitlement

Disputes commonly arise where zero-hours staff believe SSP has been wrongly refused or underpaid. Employers should have a clear internal review process, allowing payroll or HR to reassess eligibility, earnings calculations and qualifying days promptly.

Where SSP is refused, the decision and reasons should be confirmed in writing. Employees have the right to ask HMRC to make a formal decision on SSP entitlement and employers must cooperate with any such review.

Early, well-reasoned internal reviews often prevent escalation.

3. Common employer errors

Recurring compliance failures include applying assumed hours instead of actual earnings, misidentifying qualifying days, reapplying waiting days incorrectly and treating zero-hours status as a reason to refuse SSP.

Another frequent error is failing to reassess eligibility for each new sickness period. Zero-hours staff may fall above or below the earnings threshold at different times and entitlement must be reviewed each time.

4. Preparing for change and future developments

Sick pay reform has been a consistent policy focus, with proposals and policy commitments aimed at widening SSP coverage and removing the lower earnings limit. While changes are not yet in force, employers should monitor developments and review payroll systems to ensure they can adapt quickly.

For HR teams, this means building flexible SSP processes that rely on accurate data rather than assumptions about contract type.

Section D summary

Effective SSP compliance for zero-hours staff depends on strong records, consistent decision-making and clear dispute handling processes. Most legal risk arises from administrative failure rather than misunderstanding of the law itself.

FAQs

1. Do you get sick pay on a zero-hours contract?

Yes, individuals on zero-hours contracts can be entitled to Statutory Sick Pay. Entitlement does not depend on having guaranteed hours. It depends on whether the individual is classed as an employee for SSP purposes and whether the statutory eligibility criteria are met.

2. Is Statutory Sick Pay only available to employees?

SSP is payable to employees, not genuinely self-employed individuals. Many people engaged on zero-hours contracts are treated as employees for SSP purposes, even where their wider employment status may be disputed. HMRC applies a statutory test when assessing SSP entitlement.

3. What if the zero-hours worker had no shifts scheduled?

A sickness absence can still count as a qualifying period even if no shifts were scheduled during part of the absence. The test is whether the individual was incapable of work for four consecutive qualifying days, not whether work was planned on each of those days.

4. How are qualifying days decided for zero-hours staff?

Qualifying days are the days the individual normally works or would normally be required to work. For zero-hours staff, employers should look at recent rotas or established working patterns and apply a reasonable and consistent approach.

5. Do zero-hours workers get paid for the first three days off sick?

Normally no. The first three qualifying days of a sickness absence are unpaid waiting days. SSP becomes payable from the fourth qualifying day onwards, unless the sickness absence is linked to a previous period of incapacity.

6. How long can SSP be paid for?

SSP can be paid for a maximum of 28 weeks in any one period of incapacity for work. This applies equally to zero-hours employees who meet the eligibility requirements.

7. Can an employer refuse SSP because shifts were not accepted?

Refusing SSP solely because a zero-hours employee did not accept shifts is high risk. If the individual is an employee for SSP purposes and meets the eligibility criteria, entitlement must still be assessed correctly regardless of recent shift acceptance.

8. When can an employer ask for medical evidence?

Employers can usually ask for a fit note after seven consecutive days of sickness. For shorter absences, self-certification is sufficient. These rules apply equally to zero-hours staff.

9. What happens if there is a dispute about SSP?

An employee can ask HMRC to make a formal decision on SSP entitlement. Employers must provide relevant records and may be required to correct payments if SSP has been wrongly refused or underpaid.

10. Can employers offer enhanced sick pay to zero-hours staff?

Yes. Enhanced or contractual sick pay may be offered, but it is optional. Any such arrangements must be clearly defined, applied consistently and aligned with equality law obligations.

Conclusion

Zero-hours contracts do not remove entitlement to Statutory Sick Pay. For employers, the legal position is clear: SSP depends on employment status and statutory eligibility, not on guaranteed hours or the label attached to the contract.

The main compliance risks arise from misunderstanding how SSP operates with variable hours. Employers must assess average weekly earnings correctly, identify qualifying days consistently and ensure waiting days and linked periods of sickness are applied properly. Treating zero-hours status as a reason to refuse SSP is likely to result in payroll errors and legal challenge.

From an HR and governance perspective, clear contracts, well-drafted sickness absence policies and robust payroll processes are essential. Employers who apply SSP consistently, communicate clearly with zero-hours staff and maintain accurate records significantly reduce the risk of disputes, HMRC intervention and unlawful deduction claims.

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