ECH21009 - Penalties: Employer's and Contractor's Liability - Statutory Payments Penalties

Statutory Payment penalties can be applied to all Statutory Payments,

• Statutory Sick Pay (SSP),
• Statutory Maternity Pay (SMP),
• Statutory Adoption Pay (SAP) and
• Statutory Paternity Pay (SPP).

Guidance to be used for all Statutory Payment penalty offences occurring after 1 April 2008 can be found in the Statutory Payments Disputes (SPD) manual. This manual also provides guidance on investigating and resolving disputes. You should

• familiarise yourself with the contents of this manual.

The relevant legislation can be found at SPD19010.

Offences

For types of offences see SPD19015.

For a list of offences see SPD19020.

Identifying an Offence

The majority of SP penalties will be identified and pursued by the Statutory Payments Disputes Team based in NICO, Longbenton. However there may be occasions when you identify an offence during an employer compliance check.

For example if you discover that an employer

• has not paid the correct amount of Statutory Payment to their employee, see SPM90310
• has recovered too much from the National Insurance fund, see SPM90370
• failed to include Statutory Payment information on their end of year return(s), see ECH21040
• refuses access to their Statutory Payments records, see SPM90240
• fails to keep Statutory Payment records, see SPM90250
• fraudulently or negligently produces incorrect Statutory Payment records, see SPM90340.

When you consider that you have enough evidence to seek a penalty, you should

• discuss and confirm this with your manager (SO) or above
• discuss the matter with the employer
• where possible include any penalty in a Class 6 contract settlement, or
• follow SPD19035 onwards where a formal determination is necessary.

Once you have recovered the penalty or issued a penalty determination (and the penalty has been subsequently determined) you should

• notify the SP Disputes team

using the stencil available on SEES (Forms and Letters>Compliance>EC Referral Stencil).