Statutory Sick Pay in Ireland

What is the new Statutory Sick Pay scheme?

From 1 January 2023, new rules around statutory sick pay entered into force for all workers in Ireland under the Sick Leave Act 2022. Prior to the introduction of this legislation, workers in Ireland had no legal right to compensation while on leave from work for illness or injury.

The scheme was introduced in response to the Covid-19 pandemic in recognition of the need for greater security for lower-income workers. It had been previously estimated that only half of employers in Ireland offered paid sick leave to employees. The new legislation will bring Ireland in line with European counterparts.

From 2023, employees are entitled to a legally defined minimum number of days paid sick leave. Employers may have a more generous sick pay policy in place, but they cannot offer a less beneficial policy than under the Sick Leave Scheme. Any issues with regards to compliance are dealt with by the Workplace Relations Commission and the Labour Court.

How is sick pay calculated?

Sick pay is calculated at a rate of 70% of an employee’s normal daily rate, up to a maximum cap of €110 per day. Normal daily rate pay includes any regular bonuses or allowances but excludes overtime and commission. For employees whose pay changes from week-to-week, sick pay is calculated with reference to the average pay of the 13 weeks prior to the leave.

Sick leave is in addition to other entitlements such as annual leave, maternity leave or public holidays.

How many sick days are employees entitled to?

With regards to the number of days employees are entitled to each year, this is being phased in over four years as outlined below. The sick pay year runs from 1 January to 31 December and days can be taken consecutively or as non-consecutive days.

Who qualifies for the scheme?

Both full and part time employees are entitled to sick leave, so long as they satisfy all of the following conditions:

• Have completed 13 weeks’ continuous employment with the employer;

• Can provide a medical certificate from a registered medical practitioner stating they are unable to work; and

• The leave must be in relation to a day/days they would typically work.

What else should employers be aware of?

In addition to increased payroll costs, employers should be conscious of the administrative obligations under the sick pay scheme. For example, employers are required to keep records for each employee availing of sick leave, including the period of employment, dates of leave, and rate of payments made. These records must be maintained for up to four years, with financial penalties for non-compliance.

For further information please contact Henry Barrett.