Statutory Sick Pay to come into effect on 1 January 2023

On 20 July 2022, the Sick Leave Act 2022 was signed into law by the President.

The Act will introduce a statutory right to sick pay from 1 January 2023, as announced by Tánaiste, Leo Varadkar on 14 September:

“Given the current challenging business environment and inflation in particular, I have concluded that the fairest and most appropriate approach is to introduce the entitlement on 1 January 2023.”

Under the new regime, employees will have an entitlement to three days of paid sick leave in 2023, and this will be rolled out as part of a four-year plan, with employees having an entitlement to 10 days paid sick leave by year four.

The plan for paid sick leave is as follows:

• 3 sick days per calendar year in 2023;
• 5 days per calendar year in 2024;
• 7 days per calendar year in 2025;
• 10 days per calendar year in 2026.

Statutory sick leave days may be consecutive days or non-consecutive days. The legislation does not specify the amount of statutory sick pay; however, it provides that an employer must pay 70% of a worker’s wage to a maximum of €110 a day. An employee must obtain a medical certificate to avail of this statutory sick pay, and the entitlement is subject to the employee having worked for their employer for a minimum of 13 weeks.

Section 9 of the new Statutory Sick Leave Act sets out that if an employer already provides a more favourable sick pay scheme to their employees, they will not be obliged to comply with the statutory sick pay rules. An employer will have to demonstrate that any discretionary or pre-existing scheme is definitely more favourable than that provided for in the legislation. This can be determined by reference to;

• the period of service that is required before sick leave is payable;
• the number of days that an employee is absent before sick leave is payable;
• the period for which sick leave is payable;
• the amount of sick leave that is payable;
• the reference period of the sick leave scheme.

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. In addition, it will be a mandatory requirement for employers to retain records of any statutory sick leave days taken by employees, and these records must be kept for a period of 4 years. Failure to comply with this requirement may result in a fine of up to €2,500.

Employers should be preparing for its implementation by introducing a sick pay policy if none exists, reviewing their existing sick pay policies, company handbooks and contracts to ensure they align with requirements set out in the Statutory Sick Leave Act. Preparation must also include informing employees of their rights and obligations under the Statutory Sick Pay Scheme.

The SFA recently recorded a ‘Statutory Sick Pay Scheme Update’ webinar, and you can view the recording here. You can contact our HR Executive Fiona Mulligan on fiona.mulligan@sfa or ring 01 6051557 if you have any questions on the above. Further information and more details, including a sample policy and FAQ document are available on the SFA website.