Statutory Sick Pay Scheme to be introduced in Ireland

An employee in Ireland currently has no legal right under employment law to be paid whilst on sick leave. 

It is at the discretion of employers to decide whether they pay their employees who are out of work due to illness. Employees can claim Illness Benefit from the Department of Social Protection from the 4th day of Illness, and some employers choose to top this up to the employee’s full wage for a specified period of time. 

The Government’s new statutory sick pay scheme will be phased in over a four-year period as follows: 

  • Three (3) days per year in 2022 
  • Five (5) days payable in 2023 
  • Seven (7) days payable in 2024
  • Ten (10) days payable in 2025 

This four (4) year plan takes account of the current economic climate and the existing financial pressures on businesses. It is being phased-in to help employers, particularly small businesses, to plan ahead and manage the additional cost:

  • Sick pay will be paid by employers at a rate of 70% of an employee’s wage, subject to a daily threshold of €110
  • 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, meaning anyone earning over this will get the maximum sick pay of €110 per day 

This may be revised in time by ministerial order in line with inflation and changing incomes. The State is not contributing to the sick pay scheme and the cost will be borne by employers. 

The rate of 70% and the daily cap are set to ensure excessive costs are not placed solely on employers, who in certain sectors may also have to deal with the cost of replacing employees who are out sick at short notice. The Bill is primarily intended to provide a minimum level of protection to low paid employees, who may have no entitlement to company sick pay schemes. The scheme will not interfere with any existing, more favorable, sick pay schemes that are in place and employers can decide to pay more than the statutory sick pay if they wish. 

Other features of the scheme are:

  • An employee will have to obtain a medical certificate to avail of statutory sick pay
  • The entitlement is subject to the employee having worked for their employer for a minimum of six (6) months
  • Once entitlement to sick pay from their employer ends, employees who need to take more time off may qualify for Illness Benefit from the Department of Social Protection subject to PRSI contributions 

This will be the latest in a series of measures already introduced to enhance employment rights over the last five (5) years, including:

  • Paternity Benefit 
  • Parental Leave Benefit 
  • Enhanced Maternity Benefit 
  • Treatment Benefit
  • Extension of Social Insurance benefits for the self-employed 

For more advice and support please contact a member of our HR Clients Solutions team:

  • Yvonne Clarke – HR Solutions Manager
  • Áine Dunne - HR Consultant

Yvonne Clarke

HR Solutions Manager

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