New legislation introducing sick pay and sick leave for employees

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Last week, it was announced that the Government will be introducing sick pay and sick leave rights for employees next year. Currently, there is no legal obligation on employers to pay an employee who is absent due to illness.

The Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD, announced the details regarding a new bill, the General Scheme of the Sick Leave Bill 2021, providing for sick leave and pay. The new rules will be phased in from January 2022.

The new legislation will mean that employers must provide a minimum number of paid sick days annually from 2022. Prior to this announcement, Ireland had been out of line with almost all other European countries as well as the UK in terms of paying employees when unable to work due to illness. And, the Government had estimated that up to half of workers did not have sick pay coverage.

Research carried out earlier this year for the Adare Human Resource Management HR Barometer Report found that six in ten employers had a sick pay policy in place.

Sick leave coverage

The Government’s new statutory sick pay scheme will be phased in over a four-year period, starting with three days per year in 2022, rising to five days payable in 2023 and, seven days payable in 2024.

Employers will eventually cover the cost of 10 sick days per year in 2025. It is being phased in to help employers, particularly small businesses, to plan ahead and manage the additional cost, which has been capped.

Phasing of Paid Sick Leave:

  • 2022 – 3 days covered by employer
  • 2023 – 5 days covered by employer
  • 2024 – 7 days covered by employer
  • 2025 – 10 days covered by employer

Amount of sick pay

Sick pay will be paid by employers at a rate of 70% of an employee’s wage, subject to a daily threshold of €110. It can be revised over time by ministerial order in line with inflation and changing incomes.

Employees must have a minimum of six month’s service with the employer to be eligible to receive statutory sick pay and it is also a condition of the scheme that the employee is medically certified as unfit to work. The employer will deduct taxes in the normal manner.

As currently drafted, the bill does not provide for any further top up of salary for the employee and nor will any compensation scheme will be provided for employers to assist them with the costs of sick pay.

What next for employers?

Given this will be an additional cost burden on employers, organisations will need to plan for the potential impact of the scheme and also consider where changes to existing policies are required, once the new scheme is introduced next year. If your business does not currently have a sick pay policy in place and would like to talk to one of the team at Shannon Chamber HR about implementing such a policy, please contact us at (061) 360 611.

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For further information on the HR and Employment Law support services provided, to arrange a meeting or to receive a quote, contact the team at Shannon Chamber – / 061 360 611