In March 2022, the government approved a new bill that grants all workers the right to paid sick leave. Created by The Tánaiste and Minister for Enterprise, Trade and Employment, the Bill will allow Irish employees to enjoy mandatory sick pay, the same as their counterparts in other European countries.
Here at Snow technology, we aim to help companies and small businesses manage all aspects of handling payroll and employee pay. One of the most complex aspects of payroll is keeping up with ever changing laws. To assist you, we have created this guide explaining the details of the new statutory sick pay bill and what your company needs to do to adjust.
Let’s dive in.
What you need to know about the statutory sick pay bill?
Currently, there is no law requiring employers in the private sector to provide paid sick leave. The new bill seeks to change that. Under the bill, all employers are legally obliged to provide a minimum number of days of paid leave to employees who cannot report to work due to illness.
According to the Tánaiste, about half of all Irish employers provide sick pay. However, low wage workers, particularly in the private sector, are often forced to work while ill because they simply can’t afford to forego their daily wage. The aim of the Statutory Sick Pay (SSP) Bill is to provide a basic level of protection to such workers and bring Ireland in line with other European countries, whose employees enjoy mandatory paid sick leave.
How will the sick pay scheme be rolled out and when does it start?
Once the SSP bill is enacted in September 2022, the sick pay scheme will start with three days of paid sick leave per year, increasing to seven days in 2024 and 10 days in 2026.
Why is the SSP being rolled out in phases?
The bill is phased out over four years to give employers, who are under financial stress due to Brexit, the pandemic and other factors, time to plan ahead.
What payment rate does the SSP recommend?
As an employer, you are required to pay 70 per cent of the daily wage on sick leave days. There is a maximum threshold, however, set at €110. The ministry based this amount on the average weekly and yearly earnings of Irish employees; €786.33 and €40,889.16 respectively as of 2019. The ministry can change this rate in the future to adjust to changing wages and inflation, and employers are also welcome to suggest a more suitable rate, in line with the law.
Are the penalties for SSP non-compliance?
Failure to comply with the bill or provide accurate records of compliance may have you convicted and your company fined up to €2,500.
Does the SSP bill provide any exemptions?
There is a provision for employers under such financial difficulties that they are unable to provide paid sick leave. In such a case, the bill allows the employer to file an application with the Labour Court for an exemption lasting between three months to one year.
How do employees apply for sick pay under the new scheme?
For your employees to be entitled to statutory sick pay, they need to have worked at your business for at least 13 weeks and provide a medical certificate. An employee who needs more time off after the provided period ends will need to apply for Illness Benefit from the Department of Social Protection.
Employer and employee protections put in place
The scheme will be phased in over four years to give employers a chance to plan ahead.
To be fair to employers who also have to incur the cost of replacing sick employees on short notice, sick pay is set at 70 per cent of the daily wage and set at a daily cap of €110.
Under the SSP bill, employees who express their intention to take paid sick leave shall not be penalised either by having their duties transferred, being laid off or being dismissed.
Employees can file a complaint to the Workplace Relations Commission if an employer fails to provide a sick pay scheme that meets statutory requirements.
How will the Statutory Sick Pay bill affect employers?
Employers who don’t have a sick leave policy in place will have to incur the cost of setting up and implementing a policy in addition to the cost of keeping records of employee sick leave.
A well set up policy will help in reducing employee burnout, turnover and absenteeism, in addition to protecting other employees and increasing productivity and morale.
What employers need to do to adjust to the SSP law?
If your company’s contract of employment doesn’t provide sick pay, you will need to set up a policy that meets the requirements of the bill.
If you do already have a policy, you will need to review it and check whether it meets the minimum requirements. If your paid sick leave provision is as favourable or more favourable than the statutory provision, then you don’t need to set up a new policy. Company provisions that meet the requirements will be regarded as a substitute for the statutory provision.
On the contrary, if your policy is less favourable than the statutory one, you will need to change it to meet the statutory requirements.
How do you ascertain that your sick leave provision meets the minimum requirements? Check that;
- Your policy pays for the number of days worked before an employee is qualified to apply for sick leave (13 months)
- Under your policy, sick employees are paid for the days they are absent before sick leave is payable.
- Your policy pays for the days during which employees are on paid sick leave.
- Your sick leave rate is 70 percent of the daily wage, and not below €110
You will also need to set up a reliable way to keep records for each employee for four years. Each employee’s record must include;
- How long the employee has been employed,
- The dates which the employee tool statutory sick leave, and
- The payment rate offered to each employee.
What criteria must employees meet before they can apply for statutory sick pay?
Employees must have worked for at least 13 months, and be sick for four days in a row to qualify for sick leave. As an employer, you may ask for a medical certificate from a physician.
Can I refuse an employee’s request for statutory sick pay?
There is an allowance to refuse a sick pay request If an employee has reached the limit of days payable for sick leave.
Is statutory sick pay counted as salary?
The Bill treats statutory sick pay as earned and taxable income.
As an employer can I ask for the details of my employee’s illness?
The bill does not require employees to reveal the details of their illness to get sick pay.