Small and medium-sized employers can reclaim money from the Treasury to cover statutory sick pay (SSP) paid to employees with COVID-19.
Chancellor Rishi Sunak reintroduced the SSP rebate scheme last month, after it initially closed on 30 September 2021.
It forms part of a series of measures announced to support businesses affected by the new wave of COVID-19 infections caused by the Omicron variant.
The scheme means employers with fewer than 250 employees can get SSP reimbursed for COVID-related absences, for up to two weeks per worker.
Most employers have to pay SSP of £96.35 a week to employees who are off sick or isolating for more than four consecutive days, including non-working days.
The cost of providing SSP is one of employers' main concerns, with reports claiming they face the prospect of up to a million absences in the first months of 2022.
Mike Cherry, chairman at the Federation of Small Businesses, said:
“This will reduce stress for small employers up and down the country, helping those who are struggling most with depleted cashflow.
“It’s vital that small firms – once again up against a massively disrupted festive season – can reclaim the costs of supporting staff.”
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