New legislation for Tipperary employers on sick leave, tips and gratiuties

Above: Mary McDonagh of IFAC

Under new legislation, employees will be entitled to up to three days paid sick leave in 2023, explains ifac’s Mary McDonagh.

New legislation, which comes into effect on 1 January 2023, aims to improve the rights of employees who currently do not receive sick pay from their employer and/or are not entitled to illness benefit from the Department of Social Protection.

The Sick Leave Act requires employers to provide employees with up to three days statutory sick pay in 2023, rising to ten days per annum by 2026.

To be eligible, employees must have worked for the employer for a minimum of 13 weeks and must obtain a medical certificate. Employees who require additional sick leave after the statutory sick pay period expires may qualify for illness benefit from the Department of Social Protection if they have paid the necessary PRSIcontributions.

Impact on Employers

Under the new legislation, the minimum standard of statutory sick pay that employers must provide is set at 70% of the employee’s wage, subject to a daily maximum threshold of €110. The Act does not prevent employers from offering more attractive sick pay benefits.

Employers who do not already provide paid sick leave will need to budget for the additional payroll costs of complying with the new legislation while those who do provide paid sick leave should check how their existing employee contracts may be affected.

As is always the case when managing people, employers need to ensure that they keep accurate sick leave records which they can rely on in the event of a Workplace Relations Commission investigation. These records should include the employee’s service history, statutory sick leave dates and payments made.

If you require further information about statutory sick pay or have questions about how the new rules will affect your business, help is available from your local ifac office.

Tips and Gratuities

New legislation on the treatment of tips and gratuities which came into effect on 1 December 2022 will affect businesses in sectors like hospitality, tourism and personal services.

Hotels, restaurants, beauty salons, taxis and transport providers are among the businesses that will be impacted by the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 which came into effect on 1 December 2022.

Under the new legislation, businesses must clearly explain their policy on tips and gratuities for customers. Those who engage contract workers must display a Tips and Gratuities Notice on their websites and apps while employers must include information on how tips, gratuities and service charges are distributed in each employee’s written terms of employment.

The Act puts tips and gratuities outside the scope of an employee’s contractual wages, and requires employers to distribute electronic tips or gratuities (and service charges) to employees in a ‘fair’ manner.

In deciding what constitutes ‘fairness’, employers may find it helpful to consult the Workplace Relations Commission website which lists various factors that are taken into account when considering complaints as to whether the distribution of tips and gratuities to an employee is ‘fair’. These include the seniority of the employee, the value of sales/services generated by the employee, whether the employee is full time or part time and the hours worked.

The new legislation will create additional work for payroll operators who must ensure that workers receive a statement for each distribution period showing the amount of tips obtained and paid to the them. This must be done within 10 days of the distribution of tips or gratuities.

As the new legislation is already in force, it is important that businesses get to grips with the change as soon as possible.

For further information and/or advice on how to comply with the new requirements, contact your local ifac office.