Benefit that kills
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GOVERNMENT proposals to make employers pay an employee's first eight weeks sickness benefit could bankrupt small hauliers, warns the Road Haulage Association.
RHA industrial relations officer Chris Dixon has told the Department of Health and Social Security that he sees dangers in the scheme which would make employers pay all sick employees £30 a week for their first eight weeks of illness, in return for an 0.5 per cent reduction in the employer's DHSS contributions.
He says it is possible that a large firm could make a profit on such a deal, but says that small employers, like hauliers, would be faced with an intolerable financial burden.
It could represent the difference between viability and bankruptcy for some hauliers, he says, and adds that the 0.5 per cent reduction in contributions will serve only to cover the extra administrative work required of employers.
Mr Dixon has suggested that, if the new arrangements are introduced, an input and output system similar to that for vat is introduced, so that employers' sickness payments could be deducted from a monthly account. This would relieve the cash-flow problems.