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Statutory Sick Pay

Statutory Sick Pay 2022 – What We Know So Far

One of the surprise omissions from Budget 2022 was the Statutory Sick Pay Scheme. Tánaiste, Leo Varadkar TD, had announced details of a new law to give all workers the right to be paid sick leave back in June 2021 and while some details had already been made available more was expected to follow during the Budget.

Ireland has not have previously had a mandatory sick pay scheme and whether employees receive pay during periods of sick leave is at the discretion of their employer. The new Statutory Sick Pay Scheme seeks to redress this by mandating employers pay 70% of the employee’s daily rate (up to a maximum €110 per day).

Employers will have the option of topping this up to the full wage where desired. Expectations are that this is unlikely to be prevailing scenario, at least in the near term, as a recent CIPD HR practices in Ireland survey found that only 44% of private sector employers had a sick pay top up scheme.

The scheme will be introduced on a phased basis commencing in Sep 2022 with paid sick leave covering up to 3 sick days. This is planned to increase to 5 days in 2023, 7 days in 2024 and 10 days in 2025. It has also been suggested that Revenue will not require Statutory Sick Pay to be reported to them via Payroll Submission to Revenue (PSR).

In order to be eligible for the scheme employees must be working for their employer for at least 13 weeks and will also need to be certified by a GP as unfit to work. Workers who are not provided with a company sick pay scheme can take a complaint to the Workplace Relations Commission

The definition of what constitutes an employee’s daily rate has not yet been formalised by the Department of Enterprise, Trade and Employment and made available to Revenue to create the necessary legislation and this was expected to be clarified during the budget. Unfortunately, no more information is known at this point. However, one possibility is that an employee’s daily rate could consist of contractual pay as opposed to non-contractual pay.

It is worth noting that once statutory sick pay from an employer ends, employees who haven’t recovered may qualify for illness benefit.

For more information on Budget 2022 you can watch our Post Budget Webinar, where our payroll experts discuss how the proposed changes will impact employers.

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