Updates to Sick Pay Scheme - 2025
Understanding Ireland's Statutory Sick Pay Scheme
Ireland’s statutory sick pay scheme is a vital step in protecting employees' well-being and financial stability during periods of illness. This legislation ensures that employers provide a minimum level of paid sick leave, offering essential financial support when employees are unable to work due to illness or injury. The scheme is being introduced in phases, allowing businesses time to adjust and manage the associated costs effectively.
Phased Rollout and Current Entitlement
The statutory sick pay scheme is being implemented gradually. The first phase, introduced on January 1, 2023, granted employees 70% of their gross earnings (capped at €110 per day) for up to three days. This entitlement increased to five days on January 1, 2024.
Planned increases include:
2025: Seven days of statutory sick pay (originally planned)
2026: Ten days of statutory sick pay
However, as of now, the entitlement for 2025 remains at five days, despite initial plans for an increase to seven days. The government is currently reviewing the scheme’s impact before confirming any future increases. This phased approach helps employers plan and budget for the rising costs associated with statutory sick leave.
Implications for Employers
This new legislation has significant implications for employers. Businesses that are hiring new employees or do not already provide paid sick leave will face additional costs. These costs go beyond direct sick pay payments—they also include administrative expenses for implementing and managing the scheme while maintaining accurate records.
Record-Keeping Requirements
Employers must legally maintain detailed records of statutory sick leave for each employee for a minimum of four years. These records must include:
The employee’s period of employment
The dates statutory sick leave was taken
The rate of statutory sick leave payment for each employee
Failure to keep accurate records could result in fines of up to €2,500.
Exemptions for Financial Hardship
Employers facing severe financial difficulty can apply for an exemption from statutory sick pay requirements. Applications must be made to the Labour Court, and if granted, exemptions can last between three months and one year.
Employer Actions: Reviewing Existing Sick Pay Policies
Employers with existing paid sick leave provisions in employment contracts or collective agreements should review these policies to ensure compliance with the new legislation.
If an existing scheme is as favourable or more favourable than the statutory requirements, no further action is needed, as the employer is already compliant.
If an existing scheme is less favorable, it will be automatically updated to meet the minimum statutory requirements.
A sick pay scheme is considered more favorable if it meets or exceeds statutory standards in the following areas:
Required period of service before sick leave is payable
Number of absence days before sick leave takes effect
Duration of sick leave payments
Amount paid during sick leave
Reference period for the scheme
Conditions for Taking Statutory Sick Leave
To qualify for statutory sick leave, employees must:
Have completed at least 13 weeks of continuous service
Provide a medical certificate from a registered medical practitioner confirming they are unfit to work
Be scheduled to work on the leave days but be unable to do so due to illness or injury
Employees can take statutory sick leave on consecutive or non-consecutive days, depending on their needs. If an employee remains unfit to work after exhausting their statutory sick pay entitlement, they may be eligible for Illness Benefit, ensuring continued financial support during extended absences.
If you have any questions or would like to discuss statutory sick pay in more detail, contact Phil at plawlor@nkc.ie.