Statutory sick pay: What employers in Ireland need to know and do now

Following the government's announcement in June 2021 of plans to establish a statutory sick pay (SSP) scheme, it published a draft Sick Leave Bill on 5 November 2021.

The statutory sick pay scheme will be rolled out over four years.

The new statutory sick pay scheme

On 13 July 2022, the Bill was passed by the Oireachtas. And on 20 July 2022, the Sick Leave Act 2022 became law and the scheme came into force from 1 January 2023.

The new scheme aims to bring Ireland in line with other European countries that have mandatory paid sick leave for workers in place. Under the legislation, employers are obliged to provide a minimum number of paid sick days annually from 2023.

Previously, an employee whose employer didn't provide paid sick leave could apply for Illness Benefit. However, the payment was a flat €203 per week and the worker had to satisfy a minimum level of Pay Related Social Insurance (PRSI) contributions.

The applicant didn't get paid for the first three days they were absent – called "waiting days". This was reduced from six days in March 2021.

Different conditions and payment amounts apply to absences related to COVID-19.

What is statutory sick pay?

Statutory sick pay is money employers pay to employees who are ill and unable to work.

The new legislation gives employees the right to a minimum period of paid leave if they become sick or sustain an injury that makes them unfit for work.

Both full-time and part-time employees can take paid leave under the scheme, which will be rolled out in four phases.

• Now: 70% of usual daily earnings up to €110 a day for three days' paid leave

• In 2024: Five days of paid leave

• In 2025: Seven days of paid leave

• 2026: 10 days of paid leave

The eventual 10 days, or two working weeks, of sick pay per year will be in addition to other leave entitlements like annual leave or maternity leave.

How will it affect employers?

If your business doesn't already have a sick leave scheme in place, the new legislation will bring added costs. Also, indirect costs may include administrative costs in setting up and implementing the scheme and maintaining proper records for each employee.

You must maintain the records for four years, and they must include the following information:

• The employee's period of employment

• The dates of statutory sick leave in respect of each employee

• The rate of statutory sick leave payment in relation to each employee

An employer who fails to maintain accurate records may be convicted and fined up to €2,500.

In certain circumstances, an employer whose business is experiencing severe financial difficulties may apply to the Labour Court for an exemption to pay sick leave. If an exemption is granted, it will be for a minimum of three months and up to one year.

What employee protections are included?

The scheme is being enforced through the Workplace Relations Commission and the courts system.

As an employer, you're obliged to make sure that employees who express their intention to take, or do take, statutory sick leave aren't treated differently or penalised for their absence. Being penalised includes being dismissed or laid off, coerced, demoted, or have duties transferred.

Any absence in relation to SSP should not affect any other employment rights – whether statutory or as part of a contract.

The Sick Leave Act protects an employee if they lodge a complaint to the Workplace Relations Commission because they believe their employer has failed to comply with the provisions of the SSP legislation.

What do employers need to do now?

If you already provide for paid sick leave through employment contracts or collective sector or union agreements, you should make sure the contracts meet the new requirements.

Look at the Sick Leave Act and understand how it relates to your company. And there will be additional costs to cover too, so it's advisable to conduct a review.

If you currently have no provision for paid sick leave, it's worth taking the time now to get your processes in line so they meet the new legislation.

If you provide a sick leave scheme to employees that is more favourable than the terms of the statutory scheme, you won't have any extra obligations under the Act.

Get started with Sage Payroll

You may also want to review your business payroll software to make sure it can handle the additional changes.

Sage Payroll can help you efficiently process your pay run and help you manage everything from a single platform.