Statutory sick pay in Ireland: A guide for payroll and HR 

Irish employees finally gained the legal right to statutory sick pay this year, bringing them into line with colleagues in most other European countries. 

The Sick Leave Act 2022 became law on 20 July, following recognition by the government during the pandemic that low-income workers required more financial security. Both full- and part-time employees are getting the right to a minimum period of paid leave, should they become ill or sustain an injury that makes them unfit for work. 

“This is a really important new employment right that all workers will now have, no matter what their illness or job. Many employers pay sick pay, but the pandemic really highlighted the vulnerability of some workers, especially in the private sector and those on low pay.” 

Leo Varadkar, Tánaiste and Minister for Enterprise, Trade, and Employment

The legislation will come into force as of 1 January 2023. It will be rolled out in a staggered way over the next four years. The aim here is to make the financial burden more manageable for employers by giving them time to plan and budget for the additional costs.

What’s in the new scheme for statutory sick pay in Ireland? 

Under the new legislation, Irish workers will have a right to: 

• Paid sick leave of up to three working days per year in 2023. This will rise to five working days in 2024, seven days in 2025 and 10 in 2026. It will be possible to take leave either on consecutive or non-consecutive working days.
• Have 70% of their usual wages paid by employers, up to a maximum of €110 per day.
• Lodge a complaint with the Workplace Relations Commission if sick pay is not made available to them, or they feel their employer has not complied with the legislation in some other way.

Who is eligible for statutory sick leave in Ireland? 

To be eligible under the scheme, staff must have worked for their employer for at least 13 weeks. They will also need to obtain a medical certificate from their GP to say they are unfit to work and stating when they are likely to return.  

All eligible employees are protected from being discriminated against and penalised by their employer for taking up their paid statutory sick leave rights. Such discriminatory action includes coercion, demotion, transfer of duties, or dismissal. Taking up statutory sick pay will also not affect any other employment rights, whether statutory or contract-based. 

How does statutory sick pay work with the existing Illness Benefit? 

Once their entitlement to statutory sick pay ends, employees will be able to apply for Illness Benefit. But payment of the two benefits could overlap. Employers who already offer occupational sick pay can ask staff to sign over their Illness Benefit for the duration that sick leave has to be paid.

The personal rate of Illness Benefit for people earning less than €150 per week is €93.30. That rises to €208 for those bringing in €300 per week or more. Because Illness Benefit does not cover their first three days of sickness absence, this period will in future be covered by statutory sick pay. 

To qualify for Illness Benefit, employees must: 

• Be under 66 years of age
• Be medically certified as unfit for work by their GP 
• Have accrued enough social insurance (PRSI) contributions 
• Apply within six weeks of becoming ill

Some staff may not have accrued sufficient PRSI contributions to qualify for Illness Benefit. Employers should signpost these employees for assessment by the Community Welfare Officer at their local health centre.

What should employers know about implementing statutory sick pay in Ireland?

Organisations who don’t already offer paid occupational sick leave will need to make an investment. This includes the administration costs of setting up the new scheme. It also involves changes to payroll processes.  

Companies must keep employee paid sickness absence records. These must be retained for four years and include each employee’s: 

• Period of employment 
• Dates for claiming statutory sick leave 
• Statutory sick leave payment rates

Failure to maintain such records will lead to a fine of up to €2,500.  

Should employers experience severe financial difficulties, they can apply to the Labour Court to be exempted from paying sick leave for a minimum of three months and maximum of a year. 

Another requirement for employers already providing paid sick leave via employment contracts or union agreements will be to review their existing arrangements.  

The Sick Leave Act states that if an existing provision is as or more favourable than that of statutory sick pay, employers will already have met their obligations. It is possible to determine if this is the case by evaluating the: 

• Period of service required of employees before sick pay becomes payable 
• Number of days employees have to be absent before sick pay is payable 
• Period of time when sick leave is payable 
• Amount of sick leave that is payable 
• Reference period of the sick leave scheme. 

Who will enforce the legislation?

The scheme for statutory sick pay in Ireland will be enforced by the Workplace Relations Commission and the courts. 

Act now to prepare for statutory sick leave in Ireland

If you currently do not provide your employees with occupational sick leave, the time is now ripe to start preparing for the new legislation when it comes into effect in January 2023.

Such preparation should include introducing new processes to tackle the change and providing clear two-way communication with staff as to their rights and obligations.

Zellis offers leading Irish payroll software that helps with HR absence management. Learn more here.