The Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar today elicited government approval for new laws to give all workers the right to paid sick leave for the first time in Ireland.
The Sick Leave Bill 2022 was approved by the Cabinet and will legislate for a statutory sick pay scheme for all employees, being phased in over a 4 year period.
The main reasoning behind the new Sick Leave Bill 2022 is down to the pandemic. It highlighted how those who fall ill will lose out on pay, particularly those in more precarious working arrangements.
It builds on free GP care for the under sixes and over seventies which he brought in as Minister for Health and paternity benefit and social protections for the self-employed which he brought in as Minister for Social Protection.
The Scheme is being phased in to help employers to plan ahead and manage the additional cost, which has been capped.
Sick Pay plan is as follows:
- 2022 – 3 days covered
- 2024 – 5 days covered
- 2025 – 7 days covered
- 2026 – 10 days covered
Sick pay will be paid by employers at a rate of 70% of an employee’s wage, subject to a daily maximum threshold of €110. The daily earnings threshold of €110 is based on 2019 mean weekly earnings of €786.33 and equates to an annual salary of €40,889.16. It can be revised by ministerial order in line with inflation and changing incomes.
The rate of 70% and the daily cap are set to ensure excessive costs are not placed solely on employers, who in certain sectors may also have to deal with the cost of replacing staff who are out sick at short notice. The Bill is primarily intended to provide a minimum level of protection to low paid employees, who may have no entitlement to a company sick pay scheme.
The legislation expressly states that this does not prevent employers offering better terms or unions negotiating for more through a collective agreement.
In Summary, what you need to know:
The government today approved the publication of the General Scheme of the Sick Leave Bill 2022. It will be the latest in a series of actions that have improved social protections for workers and the self-employed over the last five years, including:
- paternity benefit
- parental leave benefit
- enhanced maternity benefit
- treatment benefit
- the extension of social insurance benefits to the self-employed
Statutory entitlement to sick pay will be phased in as part of a 4-year plan and will initially be for 3 days per year once the Bill is enacted. This will effectively fill the gap in coverage caused by Illness Benefit waiting days. Closing the gap of current waiting days before being able to access Illness Benefit will minimise the numbers of sick employees presenting for work.
This four-year plan takes account of the current economic climate and the existing financial pressures on businesses. The number of days will increase incrementally with the goal that employers will eventually cover the cost of 10 sick days per year in year four.
The legislation is primarily intended to provide a level of sick pay coverage to many private sector workers and those on low pay, that currently receive no sick pay/or are not entitled to illness benefit.
The initial plan is as follows:
- 2022 – 3 days covered
- 2024 – 5 days covered
- 2025 – 7 days covered
- 2026 – 10 days covered
Statutory sick pay will be paid by employers at a rate of 70% of an employee’s wage, subject to a daily threshold of €110. Setting a percentage of the gross wage is in line with the calculation method used in the majority of EU Member States that have statutory sick pay schemes, where the percentage used varies from 25% to 100% of the employee’s gross wage. The rate of 70% is set to ensure excessive costs are not placed on employers, who in certain sectors may also have to deal with the cost of replacing staff who are out sick at short notice.
This Scheme compares favourably with the Sick Pay Scheme in Northern Ireland which pays only £96.35 per week.
The daily earnings threshold cut-off point will also ensure that employers do not face excessive costs in relation to employees who are on high salaries.
