From 6 January 2014, the Government increased waiting days for state illness benefit from 3 days to 6 days. This means an employee will not have any entitlement to benefit from the state for the first 6 days of any period of illness. In most businesses that offer sick pay the waiting times for employee’s to avail of the benefit is 3 days.

IBEC recently conducted a survey which found that 72% of employers surveyed did not intend to change their sick pay policies as a result. This is despite the potential for increased costs for employers as a result of the new waiting times. Will this change impact your policy and your sick leave costs?

Employers will no longer receive an employee’s social welfare cheques until after they have received them on the sick day. If your organisation currently pays sick leave at any point before this sixth day then the sick pay costs for the business will increase this year.

As an example if you take an employee that earns €400 per week and the employer pays sick pay from day 1:

	Company Sick Pay for the 1 week	Illness Benefit recouped by Employer	Actual Cost to Employer
Previously	€400	€94	€306
As per Budget 2014	€400	€0	€400
Additional Cost to Employer			€94

If you are an organisation with high levels of absence or high numbers of employees this could be a significant cost across the year:

We recommend that you review your current policies and contracts and we have set out a guideline on what you need to do and what you need to look out for:

• Consider what the current waiting period is for employees to receive sick pay benefit and whether this should be increased in line with the government changes;
• Communicate with all employees how the business is responding to the change in waiting times for illness benefit – this should include those people who are currently on sick leave or other authorised leave;
• Remind employees about the requirements around providing medical certificates while on sick leave;
• If you are not changing the days after which an employee is entitled to sick leave it should be pointed out to employees that this is an additional cost that the business will have to absorb. It is in effect an additional benefit to employees and an increase in their sick pay;
• Ensure that you are carefully monitoring absence levels and adherence to your attendance and absence policies to avoid unnecessary costs;
• Ensure that you remind employees about their obligation to have their GP fill out the medical form (MC1) and that their sick pay benefit to their employer.

If you would like any further information on these changes or require assistance reviewing your current policies, please contact Siobhra Rush or Linda Hynes.

Disclaimer

This publication is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Ogier Leman for any action taken or not taken in reliance on the information set out in this publication. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. Any and all information is subject to change.