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Statutory Company Sick Pay

By June 14, 2021No Comments

The Government has just approved the drafting of the Sick Leave Bill 2021 which will provide for all workers to get up to 10 days paid sick leave phased in between now and 2025.  The scheme announced by the Tanaiste this week will provide for a scheme starting with 3 days paid sick pay in 2022, 5 days sick pay in 2023 and eventually employers will have to cover the cost of 10 days by 2025. The gradual phasing in is to aid employers to plan ahead and budget for additional staff costs.

Currently employees in many businesses are not entitled to company paid sick pay and claim statutory sick benefit after a period of 6 days absence from the Department of Social Protection. The new scheme will require employers to pay 70% of an employees wage rate subject to a maximum daily threshold of €110. This 70% daily cap and gradual phasing is to ensure that excessive costs are not placed solely on employers while providing a minimum level of protection to employees who do not currently have company sick pay schemes. Employers can choose to top up the payment to the employees normal wages/salary as a company benefit but there is no obligation to do so.

Employees will have to obtain a medical certificate to avail of the payment from day one and must have at least 6 months service with the employer. Once the company sick pay period ends, employees who are still on certified leave may qualify for illness benefit from the Department of Social Protection subject to PRSI contributions.

There is no doubt that this is an unwelcome added cost for many employers who are already challenged with wages and employment related costs and it is now essential to budget for this eventuality going forward. However this initiative is important in recognising the health and well being supports needed for employees who are unable to work due to ill health and excessive costs can be managed with a robust Absence Management policy and good HR practices.