• Statutory Sick Pay & Reduction to EWSS – key employment updates

    Michelle McDonagh, Senior HR Client Relationship Consultant, Adare Human Resource Management

    Last month the Government’s plan to introduce Statutory Sick Pay was approved by the Oireachtas Committee on Enterprise, Trade & Employment, which aims to ensure that all employees have a right to statutory sick pay.
    Details of the proposed Bill were announced by Tánaiste & Minister for Enterprise, Trade and Employment, Leo Varadkar TD last year. The Bill is to be phased in over a four-year period, starting with three days per year in 2022, rising to five days payable in 2023 and seven-days payable in 2024. Employers will eventually cover the cost of 10 sick days per year in 2025. Employees must have 13 weeks continuous service with their Employer to be entitled to sick pay as outlined in the Bill.
    The payment rate for statutory sick pay has been set at 70% of an employee’s normal rate, subject to a maximum of €110 per day. The employer must deduct taxes in the normal manner, and it was outlined in the Bill that the employee must be medically certified as unfit for work to qualify for statutory sick pay.
    Whilst the Committee does approve the plan, some concerns and recommendations have been brought forward:

    • Committee members were concerned about the requirement for medical certification as they don’t want certification to act as an additional obstacle.
    • If certification is required, then there should be some form of rebate for any associated costs, particularly for lower paid employees.
    • The Committee also called for businesses to be given an exemption from paying sick pay if they can demonstrate to the Labour Court that they genuinely cannot afford to make the payment.
    Employers will have to retain records of all statutory leave taken by their employees for a period of four years and employees maintain all existing employment rights when availing of benefits under the proposed Statutory Sick Pay legislation.
    The right to statutory sick pay will be legally enforceable by employees through the Workplace Relations Commission and the Courts. Remedies available to successful complainants will include an award of compensation up to a maximum of 20 weeks remuneration.
    Ireland has been noted as an outlier in this area - as one of the few advanced countries in Europe with no mandatory sick pay scheme.  Whilst this is therefore a positive step forward, the final detail of the proposed Statutory Sick Pay Scheme will not be known until the supporting legislation is passed.  Furthermore, the Committee recommendations add some uncertainty regarding what Employers can expect.  It seems clear however, that Employers will likely face additional payroll costs over the next number of years and should now be preparing to plan and budget accordingly.
    Reduction to Employment Wage Subsidy Scheme
    From today, 1st March, the Employment Wage Subsidy Scheme is to be reduced to €100 per week. This change stays in place until the scheme finishes at the end of April.
    However, businesses who were directly impacted by the public health restrictions on 20th December will only see their rates cut to €203. The only exception to this is for employees in the €151.50 to €202.99 weekly wage bracket who will have their subsidy cut to €151.50.
    From today also, the full PRSI rate of employer’s will be reinstated for all businesses. Up to now, a reduced rate of 0.5% had applied to wages eligible for the subsidy.
    According to the latest figures, there were still 22,500 employers registered for the EWSS, 18,300 of which had made a claim during the month of February for 219,600 employees.

    Adare Human Resource Management is a team of expert-led Employment Law, Industrial Relations and best practice Human Resource Management consultants. For more information go to www.adarehrm.ie or call (01) 561 3594 or email adarechambers@adarehrm.ie.