The Cabinet has signed off on proposed new laws on sick pay, that will make it mandatory for all employers to offer a minimum level of cover.

The Sick Leave Bill 2022 will now be published and will begin its passage through the Houses of the Oireachtas.

The new laws will start to come into effect as soon as enacted and will be phased in over a four-year period in order to minimise the burden on businesses as they recover from the pandemic.

Currently Ireland remains one of few European economies that does not have a mandatory sick leave entitlement.

Around half of all employees do receive a level of sick leave under their contracts, but the remainder do not have any cover should they need to take time off work due to illness and many are low paid.

In particular, coverage is far lower in the private sector when compared to the public sector.

"The pandemic exposed the precarious position of many people, especially in the private sector and in low-paid roles, when it comes to missing work due to illness," said Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar.

"No one should feel pressured to come to work when they are ill because they can't afford not to."

Initially the proposed laws will require employers to offer three days a year of sick leave, which will bridge the gap in coverage caused by Illness Benefit waiting days.

However, this will rise to five days in 2024, seven days in 2025 and ten days in 2026.

The pay will have to be a minimum of 70% of a worker's normal wage, subject to a daily maximum threshold of €110.

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But under the draft law employers can offer better terms or unions may negotiate for more via a collective agreement.

The threshold can also be adjusted through a ministerial order to keep it aligned with inflation or changes to incomes.

"We have made a big effort to design the scheme so that it’s easy to use, fair and affordable for employers," Mr Varadkar said.

"We’ve done a lot of consultation on this, with representatives from both the employee and employer side and although I know some will think it goes too far and others that it doesn’t go far enough, I think it has struck a fair and reasonable balance."

Last year employers' group Ibec told an Oireachtas committee that the introduction of statutory sick pay, in the manner proposed, would give rise to a disproportionate and excessive cost burden to employers.

In its pre-legislative scrutiny report, published last month, the committee approved the plan, but members also expressed concern about the requirement for medical certification, saying they did not want it to act as an additional obstacle.

Mr Varadkar said that a million workers could benefit from the new sick pay scheme.

He added that under half of private sector workers currently have no sick pay scheme and there are two million private sector workers in Ireland.

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Speaking to RTÉ's News at One, he said: "There is a lot of variation across the private sector, but we figure under half of private sector workers have a sick pay scheme and there's nearly two million private sector workers, so you'd be talking potentially a million workers who could benefit from this."

Mr Varadkar said no worker should feel that they must go to work when they are sick because of financial fears.

"We're doing it because we feel that no employee should feel that they have to come into work when they're sick, for fear of having no income."

He added that it is also based on public health grounds, "because people who are sick can pass on the virus".

He also said that people who go to work when they are sick are "more likely to get an injury or perhaps make a serious mistake that might hurt other people".

He said that a scheme of this kind is standard in other European Union countries, including the UK.

"Also crucially, I want to reduce one of the many inequalities that exists between public sector workers and private sector workers," he said.

"Public sector workers, even those on low pay, tend to have sick pay and pensions, whereas private sector workers in the majority of cases don't have occupational pensions or sick pay."

Mr Varadkar said that he does not accept ISME's claim that the new scheme will increase labour costs by 4 - 5%.

"No, we don't accept that and we have done some work on that as a Department and our calculation is that it will increase payroll costs by about 0.8% costs," he said.

He added that he does not believe that workers will abuse the scheme.

"I don't believe that people are going to abuse this. The fact that it is certified and the fact that it is not 100% means that there really isn't an incentive there to abuse this.

"People will use this sick leave when they need to."

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