What the Introduction of Statutory Sick Pay in Ireland Means for Employers

Ireland has historically been an outlier among European countries, in that it has not had statutory sick pay payable by the employer. From 1 January 2023, however, employers have been required to pay sick pay to their employees under the Sick Leave Act 2022.

Previously, there was a statutory entitlement to an illness benefit, payable by the Irish state. Now, the employer must provide three days of paid sick leave.

In scenarios where many employees worked closely together in one area or building (eg, in a meat-packing plant), it was found that COVID-19 spread quickly. One of the factors that increased the spread was that employees continued to come to work when they were sick because they were not paid sick leave and illness benefit only kicked in after three days.

The current regime provides for three days of paid sick leave provided by an employer, followed by illness benefit from the State, but the length of paid sick leave will increase. In 2024, employers will have to provide five days’ paid sick leave, seven days in 2025 and ten in 2026.

Statutory sick pay is capped at 70% of an employee’s daily salary, up to a maximum of EUR110 a day.

Employees must have worked for a minimum of 13 weeks to be entitled to statutory sick pay but there are few other requirements or conditions.

Many large companies already have sick pay schemes. Multinationals may wish to harmonise their schemes across multiple jurisdictions, with differing employment law landscapes.

The Sick Pay Act, while intended to provide sick pay to employees who had no prior entitlement, is also designed not to interfere with existing schemes that are equally or more generous. Benefits in an employment contract should be interpreted “on the whole” to see whether they are more or equally favourable. Important factors include the period of service needed to qualify, the number of days that an employee needs to be absent to qualify, the full period, the amount of sick leave and the reference period of the scheme.