Before 2022, Ireland was one of the few EU countries that had no statutory sick pay obligation on employers. An employee who fell ill received nothing from their employer unless their contract happened to include a company sick pay scheme. The only income available during illness was Illness Benefit from the Department of Social Protection — and that requires a minimum number of PRSI contributions to qualify.
The Sick Leave Act 2022 changed that. For the first time, Irish employees have a statutory entitlement to paid sick leave from their employer. The scheme has been phasing in gradually since it commenced in January 2023, and in 2026 the entitlement continues to increase.
For small employers in Dundalk and across County Louth — many of whom have no formal sick pay policy beyond what they do informally — this legislation creates new obligations that are not optional. It is one of several significant employment law changes that employers need to be across.
What the Sick Leave Act 2022 Requires
The Act gives employees the right to a defined number of days of statutory sick pay per year, paid by the employer, when the employee is absent from work due to illness or injury. The entitlement phases in over several years:
2023: 3 days of statutory sick pay per year. 2024: 5 days. 2025: 7 days. 2026 and beyond: the Act provides for continued increases toward an eventual entitlement of 10 days per year, subject to government review.
You should verify the 2026 figure at gov.ie or with your accountant, as the specific rate for each year is set by ministerial order and may be adjusted.
The sick pay is paid at 70% of the employee’s normal daily earnings, subject to a daily cap. At the time of writing the cap is €110 per day — meaning an employee earning more than approximately €157 per day receives the capped amount rather than 70% of their actual earnings on sick days. The cap amount may be updated — check the current figure.
Who Is Entitled to Statutory Sick Pay?
An employee is entitled to statutory sick pay if:
They have been continuously employed by the employer for at least 13 weeks. The absence is certified by a registered medical practitioner (a GP’s certificate is required). The employee has given the employer reasonable notice of their absence in accordance with the employer’s notification requirements.
The entitlement applies to full-time and part-time employees alike. For part-time employees, the 70% rate and daily cap apply to their actual daily earnings.
Fixed-term and temporary employees also qualify, provided they meet the 13-week continuous service threshold.
Agency workers — employees supplied through an employment agency — are generally covered by the Act as well, though the allocation of the statutory sick pay obligation between the agency and the hirer depends on the specific contractual arrangements.
What Employers Must Do
Maintain a record of sick leave. Employers must keep records of all sick leave taken by employees, including the dates and the certification provided. These records must be retained for four years. Failure to maintain records is an offence under the Act.
Pay the correct amount on time. Statutory sick pay is paid through the normal payroll on the date it falls due, just like any other pay. It goes through PAYE and PRSI in the normal way — it is employment income for tax purposes.
Have a written sick leave policy. While the Act does not explicitly require a written policy, practically speaking every employer should have one. It should set out the notification procedure for reporting absence, the certification requirement, how statutory sick pay is calculated, and — if the employer operates a more generous company sick pay scheme — how the two interact.
Do not disadvantage employees for exercising their rights. An employer cannot dismiss, penalise, or otherwise disadvantage an employee for exercising their right to statutory sick pay. Doing so is a breach of the Act and can give rise to a complaint to the Workplace Relations Commission (WRC).
Interaction With Company Sick Pay Schemes
Many employers — particularly in the public sector and in larger companies — already operate occupational sick pay schemes that are more generous than the statutory minimum. Where a company scheme exists, it can satisfy the statutory obligation provided it is at least as beneficial as the statutory entitlement.
For small employers without a formal scheme, the statutory entitlement is now the floor. If you have been telling employees “we don’t pay for sick days,” that position is no longer tenable for employees with 13 weeks’ service.
For employers who do have a company scheme, it is worth reviewing whether the scheme’s terms are still appropriate in the context of the statutory entitlement. A company scheme that was designed before the Act was introduced may need updating to properly integrate the statutory minimum.
The Cost to Small Employers
As I outline in our breakdown of the true cost of employing someone in Ireland, for most small employers the direct cost of statutory sick pay is modest in normal years. Most employees take few sick days, and the per-day cost is capped. The Irish government commissioned analysis suggesting average sick leave rates in Ireland are approximately 3–4 days per employee per year — meaning most employees will exhaust their statutory entitlement in most years, but not significantly exceed it.
The cost is harder to manage for businesses with workforce profiles that include higher illness rates — physical jobs with injury risk, roles involving contact with the public, or businesses with older workforces. For these employers, budgeting for an allowance of 5–7 days’ statutory sick pay per employee per year is prudent.
The more significant operational challenge for small businesses is managing absence cover. A business with three or four employees cannot simply absorb the absence of one person without operational impact. Having a plan for absence cover — including relationships with agencies or contractors who can provide short-notice cover — is a business continuity issue as much as a compliance one.
The WRC and Enforcement
Employees who believe their statutory sick pay rights have been breached can make a complaint to the Workplace Relations Commission. The WRC can award compensation to the employee and can require the employer to rectify the breach.
The WRC has broad jurisdiction under the Act and has been actively processing complaints since the scheme began. For a small employer, a WRC complaint — even a minor one — is a management distraction, involves cost, and can result in a public record of the finding.
Compliance with the Act is straightforward if it is properly understood. You can read more across our payroll and employment guides. The risk of non-compliance is disproportionate to the cost of getting it right.
Paddy Malone FCA AITI
Paddy is the principal of Malone & Co. Chartered Accountants in Dundalk. A Fellow of Chartered Accountants Ireland and a Chartered Tax Consultant with the Irish Tax Institute, he has been advising businesses across County Louth and the North-East for over 35 years.