One of the many benefits of working through an umbrella company for contractors is that it entitles them to receive statutory benefits.
This means that umbrella contractors qualify for holiday, maternity or paternity, and sick pay.
This means that should you fall ill or be unwell, you will still receive payment even if you can't work on the contract. So how does contractor sick pay work, and who is entitled to it? In this guide, Umbrella Search outlines everything contractors need to know about statutory sick pay, so if you can benefit from it.
Statutory sick pay – who's entitled?
It's worth noting that not all contractors are entitled to statutory sick pay.
Contractors working through an umbrella company become employees of their chosen provider. They are entitled to statutory sick pay should they be too ill to work.
Limited company contractors, on the other hand, are not employees. For this reason, these contractors will not get paid if they fall sick and can't work.
How much sick pay do umbrella contractors receive?
Statutory sick pay currently stands at £99.35 per week. If your umbrella company has a sick pay scheme, you will be entitled to more – you must check this with your umbrella company.
How long does statutory sick pay last?
It's worth noting that statutory sick pay only lasts for a while. The employer will cover statutory sick pay for up to 28 weeks annually.
How to qualify for statutory sick pay
To qualify for statutory sick pay, umbrella contractors must fulfill the following criteria:
They must be an employee.
They must earn at least £123 weekly before tax and National Insurance deductions. For contractors that work varying hours on different projects, this is worked out over an 8-week time frame leading up to the illness.
They must have been ill for the past 4 days in a row, which includes the weekend. However, it is worth noting that you will only receive sick pay for the days you would have been working. This means that if you are ill from Friday to Monday and don't work weekends, you will only receive statutory sick pay for Friday and Monday. These are otherwise known as qualifying days.
They must not be receiving maternity or paternity leave. They must not exceed the maximum of 28 weeks' pay.
How to claim sick pay
The contractor must inform the umbrella company of their illness within 7 days. If the illness lasts longer than a week, you must provide a doctor's note to your employer as proof of the sickness. You can obtain this from your GP, doctor, registered nurse, or pharmacist.
Other statutory benefits umbrella contractors can claim
As well as statutory sick pay, umbrella company contractors can claim various other statutory benefits.
Umbrella contractor holiday pay
Another benefit to operating through an umbrella company is that umbrella contractors get paid when they take leave.
This is great news for contractors who deserve a well-earned break but want to avoid falling out of their own pocket.
In line with other UK employees, full-time umbrella contractors as entitled to 5.6 weeks of paid holiday a year.
Part-time contractors are entitled to the following:
22.4 days for those working 4 days per week
16.8 days for those working 3 days per week
Contractor holiday pay is set at your basic pay level. This is the amount paid by the umbrella company, not the amount you charge for your time to the client.
For contractors that work varying hours or days, holiday pay will be calculated using the average time worked in the 12 weeks before your holiday.
Umbrella company maternity and paternity leave
Another statutory benefit that contractors can receive is maternity leave.
Umbrella contractors will be entitled to 90% of their average weekly pay for the first 6 weeks of maternity leave. After that, contractors will receive either 90% of their average weekly income or £156.66, depending on which is lowest, for the next 33 weeks.
If, like other contractors, your pay varies from contract to contract, maternity leave will be worked on using your average income from the previous 8 weeks.
Statutory maternity leave is paid the same way as your monthly or weekly salary, and tax and National Insurance are deducted accordingly.
Contractors must wait until they are within 11 weeks of their due date to start their maternity leave and will only qualify for paid leave during this period.
Umbrella contractors can also take paid paternity leave.
Statutory paternity leave is available to contractors after the child has been born. Contractors are entitled to take 1-2 weeks paid leave which is again worked out as 90% of your pay, or £156.66, depending on which is lower.
Ready to find an umbrella company? See how Umbrella Search can help
Now you know the range of benefits open to umbrella company contractors, including paid sick leave, holiday leave, and maternity and paternity leave, you may consider joining the thousands of other contractors that use an umbrella company.
Thankfully it couldn't be easier with the help of Umbrella Search.
Whether you have previous contracting experience or are brand new to contracting, our friendly and professional team will do their utmost to know your circumstances to provide you with the best recommendations to suit your contracting needs.
To see how we can help you take the next step in your contracting career and to take the stress and hassle out of finding an umbrella company, get in touch with the Umbrella Search team today and see how we can help you.