By Niall Pelly - 24 June 2021
The Irish government has recently announced plans to give employees the right to statutory sick pay (SSP) for the first time. Up to this point, employers have had full discretion to decide whether or not to provide sick pay.
The new entitlement will be phased in as part of a 4-year plan, starting with 3 days SSP per year in 2022, increasing to a maximum of 10 days paid SSP in 2025, as follows:
2022: 3 days,
2023: 5 days,
2024: 7 days,
2025: 10 days.
Employers will be required to pay 70% of an employee’s gross wage, subject to a daily cap of €110. This daily cap is based on the 2019 average weekly earnings and equates to an annual salary of €40,889.16. It may be revised in the future in line with inflation and changing incomes.
As explained in the Government’s consultation, this change will bring Ireland in line with the majority of EU member states. As explained in the consultation, while the schemes and rates of pay vary across the EU (ranging from 25-100% of pay), almost all EU member states do already have SSP in place and Ireland is currently one of only three member states without it.
Once it is in force (likely next year) employers that do not currently offer sick pay entitlements will need to offer mandatory SSP to qualifying employees. They will also need to update their employment contracts and sickness polices to reflect the introduction of SSP as and when it comes into force.
Employers that already offer sick pay are unlikely to be impacted but should update their contracts and sick pay policies to make it clear that any sick pay offered is inclusive of SSP.
To qualify for SSP, in addition to having worked for their employer for more than 6 months, an employee must provide a medical certificate in respect of each absence. What this means in practice is a visit to a GP for every sickness absence (even if the employee is only absent for one day due to a common cold!).
It is also not clear whether employees will need to pay to obtain their medical certificates.
The need to provide a medical certificate from day one is notable as in some other jurisdictions, employees can qualify for SSP by self-certifying their sickness. For example, in the UK, an employee who is claiming SSP can self-certify their sickness for the first 7 days and are only required to provide a medical certificate if they are off work for longer than this.
From a practical perspective, because of the current requirement to obtain a medical certificate from day one of their sickness, employees may well decide that the hassle involved in securing a GP appointment outweighs the benefit– particularly if they are also required to pay a GP to obtain it. This may limit the number of employees who take it up.
This is particularly the case for those who are low paid or only absent for one or two days. For example, employees in urban areas can expect to pay up to €65 to visit a GP, which is more than 50% of the SSP daily limit.
Even if the cost is borne by the State, given the sheer volume of medical certification requests likely to arise, it may prove difficult for GP services to meet the new demand (and so for employees to qualify for the payments).
The government has said that SSP will not come into force until 2022. Employers should watch this space to see if any changes are made to the plans in the meantime.
If you require further information or assistance with SSP in Ireland please contact Niall Pelly.