Statutory Sick Pay 2022
Currently, there is no legal obligation for employers in Ireland to pay workers during time off due to illness.
However, following an announcement by the government in June 2021 of plans to establish a statutory sick pay (SSP) scheme. In July 2022, the Bill was passed by the Oireachtas.
Once it’s been enacted, the statutory sick pay scheme will be rolled out over four years.
This article will explain the new scheme to employers of small businesses and medium businesses and how they can prepare for the scheme coming into effect in 2022.
The new statutory sick pay scheme
The new scheme aims to bring Ireland in line with other European countries that have mandatory paid sick leave for workers in place.
The move by the government is in response to the recognition during the pandemic for the need for greater security for lower-income workers.
Under the legislation, employers will be obliged to provide a minimum number of paid sick days annually from 2022.
Currently, an employee whose employer does not provide paid sick leave can apply for Illness Benefit.
However, the payment is a flat €203 per week and the worker must satisfy a minimum level of PRSI contributions.
What is statutory sick pay?
Statutory sick pay is money paid by employers 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.
Full Time and part-time employees can avail of paid leave under the scheme. This will be rolled out in phases.
Employees will be entitled to a rate of 70% of usual daily earnings up to €110 a day for three days.
In 2024, this rises to five days of paid leave, before increasing again in 2025 (seven days) and 2026 (10 days).
The eventual 10 days, or two working weeks, of sick pay per year will be in addition to other leave entitlements including annual leave, parental and maternity leave as well as public holidays.
When will the scheme start?
The Sick Leave bill was passed by the Oireachtas in July 2022. Once the Bill has been enacted, the scheme is due to come into force later in 2022.
The scheme provides employees who have 13 weeks’ continuous service with sick pay for up to three days of certified sick leave per year. However, this entitlement will increase over a period of four years, with the number of days being covered by the scheme going from three in 2022 to five days in 2024, seven days in 2025, and a maximum of 10 days in 2026.
How will it affect employers?
If your business doesn’t already have a sick leave scheme in place, the new legislation will impose costs on your company.
As an employer, you must keep proper records for each employee. The records must be maintained for four years and include information in relation to each employee who availed of sick leave.
The following information must be included in the records:
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 subject to a fine of 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.
As an employer, you’re obliged to ensure that employees who express their intention to take or do take statutory sick leave aren’t treated differently.
What employers need to do now
If you already provide for paid sick leave through your employment contract or through collective sector or union agreements, you’ll need to review the contracts in light of the upcoming legislation.
If you have a dedicated HR manager or team, you’ll need to look at the Bill and how it relates to your company.
The Sick Leave Bill states that if an existing provision for paid sick leave in an employment contract is as favourable or more favourable than the statutory provision, then the employer’s obligation under the legislation is met.
The Bill further states any such provision shall be a “substitution for, and not in addition to” the entitlement.
However, if a provision for sick leave in your standard employment contract is less favourable than the entitlement provided under the legislation, it will be “deemed to be so modified so as to be not less favourable”.
In summary, an employer who provides a sick leave scheme to employees more favourable than the terms of the statutory scheme will not have additional obligations under the Bill.
The Bill sets out the criteria for employers to determine whether their existing sick pay scheme is more favourable than the proposed statutory provisions provided in the Bill:
The period of service of an employee required before sick leave is payable
The number of days an employee is absent before sick leave is payable
The period for which sick leave is payable
The amount of sick leave that is payable
The reference period of the sick leave scheme.
What your employees might ask about the scheme
The Bill sets out the conditions under which employees can take statutory sick leave:
Employees must have completed 13 weeks’ continuous service before availing of statutory sick leave.The employee must provide their employer with a certificate from a registered medical practitioner and the certificate must state that the employee named is unfit to work due to their illness or injury.
The leave must be in relation to a day or days when an employee would ordinarily work but is incapable of working due to illness or injury.
The leave can be taken on consecutive days or non-consecutive days.
Additionally, once the entitlement to statutory sick pay from the employer ends, employees who haven’t recovered and are still unfit to return to work may qualify for Illness Benefit.
Final thoughts on statutory sick pay
While statutory sick pay will be beneficial for your employees, you may need to make changes to your payroll processes to adapt to the new rules.
And there will be additional costs to cover, too.
If you currently operate an occupational sick pay scheme, it’s advisable to conduct a review and keep up to date with any further government announcements around statutory sick pay.
If you currently have no provision for paid sick leave, it’s worth taking the time now to prepare for the legislation to come into effect, later in 2022.