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Building on his work to date to make work pay and improve terms and conditions for workers, the Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar, today announced that all workers will have the right to paid sick leave, as the Sick Leave Bill 2022 completed its passage through both Houses of the Oireachtas.
The Tánaiste said:
"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. We’ve also been behind our European counterparts on this, with Ireland being one of the few advanced countries without such a scheme.
"No worker should feel pressurised to come into work when they are unwell. It’s not good for their own health obviously, but it’s also bad for their colleagues, any customers they deal with and their employer. From later this year, all workers will have the safety net of knowing they will not lose out on payment if they are unwell and can’t come into work.
"This is a brand-new employment right, 1 of 5 new workers’ rights we’re bringing in this year and is building on our work to date to make work pay and improve terms and conditions for workers.
"Throughout this process, I’ve been really conscious of the impact this new law will have on employers. The most important workers’ right is the right to work and I know how difficult and disruptive the past couple of years have been on business owners and employers and appreciate fully how hard they’ve had to work to protect jobs and hold onto their staff. That’s why we’re phasing it in as we are and I think we’ve designed it in such a way that is fair and affordable for enterprise."
The new scheme will start with 3 days' paid sick leave per year, rising to 5 days in year two, 7 days in year three, and employers will eventually cover the cost of 10 days in year four.
Sick pay will be paid by employers at a rate of 70% of an employee’s wage, subject to a daily maximum of €110. It can be revised over time by ministerial order in line with inflation and changing incomes.
An employee must 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 13 weeks. 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.
The Sick Pay Bill is the latest in a series of actions that have improved social protections for workers and the self-employed over the last 5 years, including:
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 4-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:
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.