Until now, the decision as to whether or not employees receive sick pay has been at the discretion of each individual employer. From 2022, under proposed draft legislation (the ‘Sick Leave Bill 2021’), all employers will be required to provide SSP to employees.
Primarily, the legislation has been introduced to provide sick pay coverage to employees, particularly those in lower paid jobs, who at the moment do not receive sick pay from their employer or are not entitled to an illness benefit.
The scheme will be phased in as part of a four-year plan. From 2022, employees will be entitled to three paid sick day per year, increasing to a maximum of 10 days by 2025. The increase will go as follows:
2022: Three days
2023: Five days
2024: Seven days
2025: 10 days
This phased system is intended to support employers, especially smaller ones, plan ahead and manage the additional costs that will come with the new law.
SSP will be paid by employers at 70% of an employee’s gross wage, subject to a daily threshold of €110. This threshold is based on the 2019 average weekly earnings of €786.33, equating to an annual salary of €40,889.16. To keep in line with inflation and changing incomes, this threshold may be revised in the future.
The government has stated that this new earnings cap will bring the country in line with the majority of EU member states, Ireland being only one of three member states without SSP. The government also stated that the cap will ensure employers do not face excessive costs in relation to employees who are on higher salaries.
If you are interested in doing business in Ireland, find out everything you need to know about payroll, tax, social security, employee benefits, work permits, employment law and more in the activpayroll Guide to Doing Business in Ireland. This is available as a free PDF to download.