Sick Pay Legislation

Posted in Employment, Good Advice, Our Blog

A new law to give all workers the right to paid sick leave will be phased in over a four-year period. It is primarily intended to provide a minimum level of protection to low paid employees who may have no entitlement to sick pay schemes.

The initial plan is as follows:

  • 2022 – 3 days covered
  • 2023 – 5 days covered
  • 2024 – 7 days covered
  • 2025 – 10 days covered

It is being phased in to help employers, particularly small businesses, to plan ahead and manage the additional cost which has been capped.

Sick pay will be paid by employers at a rate of 70% of an employee’s wage, subject to a daily threshold of €110.

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 Q4 2019 CSO quarterly earnings data will be used as the reference point. The daily earnings threshold figure of €110 is based on 2019 mean weekly earnings of €786.33 and equates to an annual salary of €40,889.16. Imposing the cap at this level ensures that €110 is the maximum cost for any employer per day (weekly salary of €786.33 divided by 5 days multiplied by 70% = €110.08).

The Regulatory Impact Analysis estimates this law to be equivalent to a 2.6% pay increase in terms of value to the average employee who currently receives no sick pay from their employer.

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.

An employee will have to obtain a medical certificate to avail of statutory sick pay, and the entitlement is subject to the employee having worked for their employer for a minimum of six months. Once entitlement to sick pay from their employer ends, employees who need to take more time off may qualify for illness benefit from the Department of Social Protection subject to PRSI contributions.

It can be revised over time by ministerial order in line with inflation and changing incomes.

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