New legislation giving employees a statutory entitlement to sick pay is currently making its way through the Oireachtas.
When enacted, the Sick Pay Bill will provide a level of sick pay coverage for employees who currently do not receive sick pay or are not entitled to illness benefit.
Consequently, ifac, Ireland’s farming, food and agribusiness specialist professional services firm, is advising Kilkenny farmers to prepare for statutory sick pay for their employees.
Mary McDonagh, Head of HR & Payroll Services at ifac, advises:
“At a time when input costs for everything from feed and fertiliser to energy, transport and labour are rising, it is particularly important that farmers with employees do not overlook making provision for statutory sick pay in their budgets for next year.
“This year’s introduction of statutory sick pay is an additional cost that farmers with employees need to include in their budget. Now is also the time to address situations where an existing employee’s wages are based on ‘take home’ rather than ‘gross’ pay.
“This is important because ‘net’ or ‘take home’ pay arrangements are difficult to budget and expose employers to potential additional costs if income tax rates rise or an employee’s tax credits change. Wages should always be agreed on a gross pay basis.”
Payment rate and duration
Under the legislation, employers will be required to pay sick pay at a rate of 70% of an employee’s wage, subject to a daily maximum threshold of €110. The scheme will be phased in over four years, allowing employers to plan for the additional costs they will incur. Initially, employees will be entitled to three days of statutory sick pay per year, rising to five days in 2024, seven days in 2025, and ten days in 2026. These sick days do not have to be consecutive.
Employees will need to obtain a medical certificate to avail of statutory sick pay. To be eligible, they will also need to have worked for their employer for a minimum of 13 weeks.
If they need additional time off work once the entitlement to sick pay from their employer ends, they may qualify for illness benefit from the Department of Social Protection provided they have sufficient PRSI contributions.
Accurate record-keeping is essential when managing employees.
In respect of statutory sick pay, the details to record include the employee’s service history, statutory sick leave dates and the payment made. These records may be needed in the event of a Workplace Relations Commission inspection or investigation.
Note that statutory sick leave should not be included as part of annual or any other leave.
Mary continued, “Also, farms which already provide paid sick leave for their employees need to check how the new legislation will impact those contracts. The legislation states that employers are not prevented from offering better terms to their employees.”
If you are concerned about the impact of statutory sick pay on your farm business or have questions about how to budget for the new scheme, further information is available from your local ifac office.
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