Background

• The statutory sick pay scheme will be rolled out over four years, commencing 1st January 2023
• Under this new legislation, from 2023, employers will be obliged to provide a minimum number of paid sick days annually to employees
• Pre 2023, an employee whose employer does not provide paid sick leave would have normally applied for Illness Benefit of €203 per week (provided the employee satisfies the minimum level of PRSI contributions)
• The scheme will be rolled out in four phases

What is Statutory Sick Pay (SSP)?

• Statutory sick pay is payment by employers to employees who are sick and are not able to work
• The legislation provides employees the right to a minimum period of paid leave if they become sick and are unable to work.

What employees are entitled to Statutory Sick Pay (SSP)?

• Employees must have completed 13 weeks’ continuous service before availing of statutory sick leave
• Full time and part time employees will be able to avail of statutory sick pay
• The leave can be taken on consecutive days or non-consecutive days
• The employee must provide their employer with a certificate from their GP and the certificate must state that the employee is unable to work due to illness or injury
• The leave must be in relation to a day or days when an employee would ordinarily work
• Additionally, once the entitlement to Statutory Sick Pay (SSP) from the employer ends, employees who haven’t recovered and are still unable to return to work may qualify for Illness Benefit

How much are employees entitled to?

• For 2023, employees will be entitled to a rate of 70% of their normal daily earnings subject to a maximum of €110 a day for three days
• In 2024, this rises to five days of paid leave, before increasing again in 2025 (seven days) and 2026 (ten days)
• The sick day entitlements pay per year are in addition to other leave entitlements including annual leave, parental and maternity leave and public holidays

Is Statutory Sick Pay (SSP) Taxable?

• Yes, it is taxable through payroll

How will Statutory Sick Pay (SSP) affect employers?

• Given the current cost of living and energy crisis, the staggered roll-out has been designed to avoid placing an excessive financial burden on employers
• The staggered roll-out will give employers time to plan and budget for the additional costs

What does an employer need to do and prepare for?

• An employer should review their employment contracts for their employees and edit accordingly to account for Statutory Sick Pay (SSP) legislation
• It may be prudent to contact HR service providers who would review employment contracts
• The use of an adequate payroll service provider is critical – At Greally Accountants & Tax Advisors Limited, we provide payroll services to many of our clients and we take this stress and burden away from our clients thus allowing our clients to focus on their business
• As an employer, you must keep proper records for each employee and the records must be kept for four years and must contain information in relation to each employee who availed of Statutory Sick Pay (SSP)
• The following information must be included in the records:
• The employee’s period of employment
• The dates of statutory sick leave in respect of each employee
• The rate of statutory sick leave payment in relation to each employee

What if an employer is non-compliant?

• An employer who fails to maintain accurate records may be convicted and subject to a fine of up to €2,500
• The Sick Leave Act provides protection for an employee to lodge a complaint to the Workplace Relations Commissions (WRC) if they believe their employer has failed to comply with the provisions of the Statutory Sick Pay (SSP) legislation

What is an employer is experiencing financial difficulty?

• An employer whose business is experiencing financial difficulty may apply to the Labour Court for an exemption to pay sick leave
• If an exemption is granted, it will be for a minimum of three months and up to one year

Further information:

https://www.gov.ie/en/press-release/3e3b2-all-irish-workers-will-be-entitled-to-sick-pay-for-the-first-time-under-new-law-tanaiste/

https://www.citizensinformation.ie/en/employment/employment_rights_and_conditions/leave_and_holidays/sick_leave.html

https://www.ibec.ie/sfa/news-insights-and-events/insights/2022/10/11/statutory-sick-pay-to-come-into-effect-on-1-january-2023

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info@greallyaccountants.ie

Legal Disclaimer:  This blog is intended to describe the subject in general terms. As such, it does not attempt to cover every issue which may arise in relation to the subject. It does not purport to be a legal interpretation of the statutory provisions and consequently, responsibility cannot be accepted for any liability incurred or loss suffered as a result of relying on any matter published herein