Softworks Blog

Did You Know You Might Be Paying Your Employees Twice?

Posted by Eimear McCarthy on Thu, Nov 19, 2015

The financial impact of employee absence is significant, yet managing it is increasingly complicated, time consuming and expensive. Many employers worry about a member of staff being absent from work due to illness and are concerned about how to properly manage employees’ absences. Employees may be eligible to apply for Illness Benefit, which is a short-term payment for insured people who are not able to work due to illness.

From January 6, 2014 no Illness Benefit payment will be made for the first 6 days of illness (increased from 3 days.) This means that the employee will not be entitled to receive Illness Benefit for the first 6 days of any period of incapacity for work. This is more than one full working-week.

Each time an employee is absent from work there is a cost involved due to lost productivity on the day, having to cover the missed shift and the impact of not being able to accurately track various absence and leave types. The more employees the organisation has, the higher the costs. The employer continues to pay the employee as usual. Therefore, the employee is in profit as they are receiving their salary plus their Illness Benefit. The disadvantage of this however is that the employer is at a loss as they have lost man hours through illness and they have not retrieved the social welfare benefit.   

So how can organisations overcome this?

  • Employer deducts the amount of social welfare benefit from the employee’s salary for the period of illness, which leaves the onus with the employee to make up the difference by claiming social welfare.
  • The employer continues to pay the employee their full salary but puts a progress in place where the manager will request the refund of social welfare sum from the employee.
  • Companies can look in to minimising the cost of sick leave by reducing sick leave levels in the workplace by putting more effective policies and procedures in place.
  • Implement certain procedures such as having to speak to a manager to report an absence, or back to work interviews, which may reduce unnecessary sick leave absences.
  • The use of a system such as Softworks Time & Attendance, Labour Scheduling and Absence Management Solutions can assist employers to achieve greater visibility and help incorporate workflow reminders to managers to follow up regarding the social welfare payments.

The best way to reduce the incidence of absenteeism in your organisation would be using an automated absence management system. There are several reasons why organisations should use automated absence management;

  1. Reduced Manual Processes
An automated system provides a clear documented channel for handling requests. It recognises patterns in absences, alerting the correct people at the right time when occasional absences become more frequent than usual.

  1. Greater Accuracy

With automated systems, the chances of error are reduced which prevents instances where employees continue to be paid despite using all their allocated leave.

  1. Reduced Labour Costs

If absence tracking is not monitored correctly or accurate, employees may take off more time than they have earned, costing the organisation money. With automation, comes greater transparency in how many leave requests are made and granted, and how that information is communicated to the payroll department.

  1. Improved Employee Satisfaction

When employees have clear communication, immediate receipt confirmations and clarity around processes, confusion in the workforce is largely reduced. Therefore, employees are more likely to feel that leave policies are fair, making them more loyal to the organisation.

Absence management systems enable employers to record and monitor incidences of staff absence and identify what action needs to be taken in each case. The overall purpose of these systems is to help line managers tackle absence more consistently and effectively, and therefore work to reduce it.

By reducing the level of unnecessary sickness absence, employers will be better placed to support those employees who are genuinely ill and who cannot and should not attend work, whether Illness Benefit applies or not.

Download our free white paper on how to reduce absenteeism in your organisation.

To find out more about Softworks products and what we do, visit www.softworks.com and request a free demo today!

Topics: Time & Attendance, Absenteeism, Illness Benefit