Statutory Sick Pay Scheme

Statutory Sick Pay Scheme

Statutory Sick Pay Scheme

Cabinet’s recent approval of the Sick Leave Bill 2022 will legislate for a statutory sick pay scheme in Ireland for the first time.

The statutory sick pay scheme, as approved by the cabinet will be phased in over a five-year period with:

  • initial statutory entitlement to sick pay for three days per year, rising to five days in 2024, seven days in 2025, and 10 days in 2026.
  • A rate of payment for statutory sick leave of 70% of normal wages to be paid by employers (Capped at €110 per day).
  • A right for workers to take a complaint to the WRC where they are not provided with a company sick pay scheme.

Statutory Sick Pay Scheme

Whereas in the past Irish employees have had no statutory right to be paid while on sick leave, soon employers will be required to pay 70% of an employee’s wage on a sick day up to a maximum €110 per day. The daily earnings threshold of €110 is based on 2019 mean weekly earnings of €786.33 and equates to an annual salary of €40,889.16.

Employees will be entitled to 10 days of paid sick leave every year from 2026 under new legislation. The Sick Leave Bill follows up on Tánaiste Leo Varadkar’s announcement in June last year (2021) of his plan to give all workers (full time and part time) the right to paid sick leave.

The timelines have changed since the government first announced details of the proposed scheme with many of the rates coming into effect one year later. By way of an explanation for these changes, Tánaiste Leo Varadkar said in a statement “I fully understand that many businesses are struggling at the moment with additional costs because of the Russian invasion of Ukraine, as well as the aftermath of Covid-19 and Brexit and the disruption both have brought. That is why we have chosen to phase this in, in this way. We have made a big effort to design the scheme so that it’s easy to use, fair and affordable for employers,”

The scheme is intended to support employees would do not have access to paid sick leave from their employer at present. Speaking about this Varadkar said “Ireland is one of the few advanced countries in Europe not to have a mandatory sick pay scheme and although many, we think approximately half, of employers do provide sick pay, we need to make sure that security, that safety net, is there for all workers, regardless of their job,” Varadkar said.

Employers who provide for paid sick leave should review their current policy to ensure it meets the minimum conditions of the Bill and amend accordingly.

The rate of 70% is set to ensure excessive costs are not placed on employers, who in certain sectors may also have to deal with the cost of replacing staff who are out sick at short notice.

This Scheme compares favourably with the Sick Pay Scheme in Northern Ireland which currently pays only £96.35 per week.

It may also be worth noting that an employee must obtain a medical certificate to avail of statutory sick pay, and the entitlement is subject to the employee having worked for their employer for a minimum of 13 weeks.

 

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