An Introduction of Statutory Sickness Pay Scheme from 2022 by Ireland

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The Irish government has given its approval to plans for a statutory sickness pay scheme (SSP) for employees, subsequent consultation last year.

It was announced by Leo Varadkar, the Tanaiste and Minister of Enterprise, Trade and Employment, the details of a new legislation which opens for the first time to the employees the right to a paid sick leave. This announcement follows a public consultation launched by the Ministry of Enterprise, Trade and Employment, which ended in December 2020.

The SSP is to become an employment law in 2022 and will be implemented gradually over a period of four years. It will begin with three payable days per year in 2022, increasing to five payable days in 2023 and seven payable days in 2024. Ultimately, employers will cover the cost of ten sick days per year by 2025. The phased introduction is intended to permit employers to prepare for and adjust to the plan and its related costs.

It is understood that the SSP will be rewarded by employers at a rate of seventy percent of the salary of any employee, subject to a day-to-day threshold of € 110. This figure is based on the 2019 average weekly salary of € 786.33. The threshold can be modified by ministerial decree depending on inflation and changes in income. The threshold makes certain that employers will not have to bear exorbitant costs compared to employees with inflated wages. It is also understood that in order to qualify for the SSP, employees will need to acquire a medical certificate and have been in the service of an employer for a minimum duration of six months. As soon as an employee’s entitlement to SSP finishes, those who require to get more time off can claim sickness benefit from the Ministry of Social Protection, subject to Pay Related Social Insurance (PRSI) contributions.

The introduction of the SSP in Ireland is the latest in a series of actions that have improved employee protections in recent years, such as extending employee parental leave entitlements to twenty six weeks in September 2020. Ireland has also introduced paternity benefits, improved maternity benefits, and the extension of social insurance benefits to the self-employed.

Although the legislation introducing sickness benefits has not yet been published, it is likely to have a big impact for all employers who do not currently pay sickness benefits. Employers are advised to closely monitor these developments and keep their recent policies and contracts under review.