Preparing for New Sick Pay Rules
Until now, Irish employers have not been obliged to pay employees during sick leave. The new legislation changes that.
The new statutory sick pay rules are due to come into effect imminently in Ireland. Irish employment contracts may provide for a limited period of sick pay, but this has always been at the discretion of the employer. If employers chose not to provide this, affected employees must apply for state-sponsored illness benefits subject to PRSI contributions.
This is now going to change. The obligation to pay an employee sick leave will now be on the employer.
What are the changes?
Under the new regime employees will have an entitlement to three days of paid sick leave this year. This is then due to go up to five next year, seven in 2024 and ten in 2025. The increases will be made by way of ministerial order each year. Factors including the state of the economy generally must be considered by the minister when making their decision.
The draft bill does not specify the amount of statutory sick pay. It simply states that an employer must pay a prescribed daily rate for a statutory sick leave payment. The intention of the government is to place a cap on the amount of statutory sick leave. It has been suggested that an employer will only be obliged to pay up to 70% of wages subject to a cap of €110 a day.
Employees will need to have at least 13 weeks of continuous service before they are eligible for statutory sick pay. It’s important to note that employees will be obliged to furnish a medical certificate in respect of each day of statutory sick leave.
If an employer already provides more favourable sick leave benefits to an employee, they will not be obliged to comply with the statutory sick pay rules. However, the employer will have to demonstrate that any discretionary or pre-existing scheme is more favourable than the one provided in the legislation.
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