Ireland to establish statutory sick pay scheme from 2022

Out-Law News | 11 Jun 2021 | 3:02 pm | 1 min. read

The Irish government has approved plans to establish a statutory sick pay (SSP) scheme for employees, following consultation last year.

The Tánaiste and minister for enterprise, trade and employment, Leo Varadkar, announced further details of new legislation which will entitle employees the right to paid sick leave for the first time. The announcement follows a public consultation launched by the Department of Enterprise, Trade and Employment, which closed in December 2020.

The SSP is set to become an employment right in 2022 and will be phased in over a four-year period. It will start with three days payable per year in 2022, rising to five days payable in 2023 and seven days payable in 2024. Employers will eventually cover the cost of 10 sick days per year by 2025. The phased introduction is intended to allow employers to prepare and adjust for the scheme and its associated costs.

It is understood that SSP will be paid by employers at a rate of 70% of the employee’s wage, subject to a daily threshold of €110. This figure is based on the 2019 average weekly earnings of €786.33. The threshold can be revised by ministerial order in accordance with inflation and changing incomes. The threshold ensures that employers will not face excessive costs in relation to employees with high salaries.

It is understood that to qualify for SSP, employees will have to obtain a medical certificate and must have worked for the employer for a minimum period of six months. Once an employee's entitlement to SSP ends, those who need to take more time off may qualify for the Illness Benefit from the Department of Social Protection, subject to PRSI contributions. 

The introduction of SSP in Ireland is the latest of a series of actions which have improved protections for employees in recent years such as the extension of employees’ parental leave entitlements to 26 weeks in September 2020. Ireland has also introduced paternity benefit, enhanced maternity benefits, and extended social insurance benefits to the self-employed.

Employment law expert Jason McMenamin of Pinsent Masons, the law firm behind Out-Law, said: “While the legislation introducing statutory sick pay has yet to be published, it is likely to have a big impact for any employers who currently do not pay sick pay. We would advise employers to monitor this development carefully and to keep their current contracts and policies under review.”