An upcoming change in business law may result in UK firms struggling to contain sickness costs, Canada Life Group Insurance has said.
From 6th April 2014, the Percentage Threshold Scheme, which allows employers to reclaim Statutory Sick Pay (SSP) paid to employees over and above the set percentage threshold of their National Insurance contributions, will be abolished.
The insurer said this would put a financial burden on firms with high sickness absence rates - particularly SMEs.
Long-term sickness absence is a growing concern, with Department for Work and Pensions figures suggesting a million employees were off sick for more than a month between October 2010 and September 2013.
The 130 million working days lost through sickness absence costs employers around £9bn and the UK national economy about £100bn every year.
Paul Avis, Marketing Director at Canada Life Group Insurance, said: "Although the government's new Health and Work Service goes some way in addressing occupational health advice and support for employees, the tax exemption is limited to £500 a year for each employee on medical treatments recommended by the service.
"By promoting a 4 week intervention point it is clear that getting support earlier in an absence is the best way to mitigate prolonged periods away from the workplace.
"However, this may prove to be too limited a service."
