Employers to cover first 4 weeks sick-pay

[Chris]

Surely that is why employees pay PRSI to the government? People pay Social Insurance to cover them for when they are sick...
.

It is not insurance it is a ponzi scheme. If an insurance company were to operate in the same way they would be immediately put out of business.

Firstly, would everyone get cover? Depending on the nature of the job, some insurers may be reluctant to cover people (Gardai for example) or unless you have universal measures like you have on health insurance, they may not cover people over certain ages (or make the premiums prohibitive). PRSI is standard, private may not be. It's quite possilbe the premiums for some people could be way above PRSI which are standard

Of course people would get cover just like people can get life insurance. The price would depend on the risk of injury and illness based on work and private activities. Why should non smokers who are less prone to illness pay the same as smokers? Why should someone who plays no hazardous sports pay the same as someone who goes off piste skiing? A private risk based system would also have the advantage of encouraging people to lead less risky/healthy lives.
Now if there is a heroin addict who likes to go mountaineering and he cannot get insurance then that person is forced to have some savings to cover a period of illness, but that is a good thing, we do not want to reward bad behaviour at the expense of good behaviour.
If because of one of life's unfairnesses someone is prone to sickness then they can always negotiate an employment contract that covers sick leave or they can save money to self cover any eventualities. This is not something that has to be forced on people as the only possible solution.

Bottom line, employers should not be forced to cover sick leave, this should be between the employer and employee. The SW benefit that kicks in after 3 days should be scrapped altogether in conjunction with a reduction in employer PRSI. Mandatory sick leave will only result in lower wages, if an employee is ok with that then let them put it in the employment contract, this is not something that should be mandated.

 

[Mpsox]

I agree with all that, but you could say the same about most insurance products. Lots of people don't insure their homes for example while many others do.

Why should the state or the employer have to be out of pocket if an employee is sick?

What if work made the employee sick? Plenty of accidents happen in the workplace

Would there be professions that people wouldn't work in because they couldn't get insurance. I'm thinking of people like firefighers, tree surgeons etc, professions that are actually dangerous but still required.

What if the cost of private insurance was so prohibitive that it actually served as a disincentive for people to go back to work in low paying jobs?

 

[Chris]

The saving to the state has been set at €150m for a full year. I wonder would hiking the emplyers PRSI rate from 10.75% to 11 or 11.25% achieve the same thing without leaving small employers vulnerable?

The issue here is insurance (PRSI), I dare say most employers would rather pay an extra 0.5% rather than run the risk of sick employees and the outcome would be revenue neutral to the state.

As you work for N insurance company you should know that PRSI is as much an insurance as the moon is made of cheese.
If a small employer wants to provide sick leave then they are not forced to take that risk on, there are plenty of insurances on offer to employers to help alleviate the risk of short and long term illness. My employer provides me with both short and long term cover but this is covered through a private insurance product. There is no unfilled gap in the market where government has to jump in to the rescue.
If employers are really so well off with the cover provided through employer PRSI then surely they would not have to be forced into the scheme!

It's the same point as medical cards for OAPs. Reasonably well off OAPs were rightly horrified by the thought that removing the medical card would lead them to a situation where they might experience poor health and not have enough to pay the bills. Charging say €500 p.a. for the use of the medical card to the people concerned would have been cost neutral to the state and removed the worry of an unforseen illness.

Why would this have to be something that only the government can provide? There are plenty of health insurance products that cover a large portion of GP visit costs.

 

[Chris]

What if work made the employee sick? Plenty of accidents happen in the workplace

Would there be professions that people wouldn't work in because they couldn't get insurance. I'm thinking of people like firefighers, tree surgeons etc, professions that are actually dangerous but still required.

What if the cost of private insurance was so prohibitive that it actually served as a disincentive for people to go back to work in low paying jobs?

We are talking about short term illness cover, so if an employee cannot get insurance then they will have to save up 4 weeks wages, not exactly a prohibitive feat.
Secondly, insurance companies make money by pricing so that as many people as possible can be covered, not the other way round. How many people have you heard of being priced out of the life insurance market?
Thirdly, there is no reason why employers would blanket refuse to offer sick pay, in which case the employee would. Of have to worry about individual insurance.

 

[ajapale]

That's what the government are now suggesting. What do posters think of this proposal?

Hi Purple,

Can you point to a link which explains the detail of the proposal?

I thought this was what Employers PRSI was for? If employers have to pay sick leave or take out insurance to cover themselves then why should the have to pay very high Employers PRSI?

Is the proposal for the introduction of a manditory sick pay scheme?

aj

PS I dont think this serious thread belongs in Letting Off Steam. If its ok with the OP then Ill move it and delete the rants.

 

[DerKaiser]

It's funny how employers in the UK and elsewhere in Europe manage to meet this 'onerous' provision without crashing and burning. Maybe they're just smarter employers over there.

So you don't believe in social insurance then? Or is it just you don't believe in social insurance in the private sector? Don't let your principles get in the way of a sly dig at small enterprise.

I work for a large organisation more akin to the public service in terms of benefits and culture where this move would be a non-issue. Can you not accept that it is an issue for small organisations struggling to justify keeping going?

 

[Complainer]

So you don't believe in social insurance then? Or is it just you don't believe in social insurance in the private sector? Don't let your principles get in the way of a sly dig at small enterprise.

I don't believe that the dramatic over-reaction seen here (similar to the dramatic over-reaction to the 'raiding of private pensions) is genuine. It is generally coming from those people who call loudly for cutbacks and reductions for other people, but suddenly start whining very, very loudly when a small impact of our current desperate situation starts to hit them, as opposed to hitting other people.

 

[Mpsox]

We are talking about short term illness cover, so if an employee cannot get insurance then they will have to save up 4 weeks wages, not exactly a prohibitive feat.
.

wow, I'm sure anyone on here who is in a minimum wage job will 100% agree with that comment

 

[DB74]

wow, I'm sure anyone on here who is in a minimum wage job will 100% agree with that comment

And of course all those people who are currently struggling to pay their mortgage and other bills and day-to-day expenses will also have no problem saving up 4 weeks wages to put away for a rainy day

 

[T McGibney]

people who call loudly for cutbacks and reductions for other people, but suddenly start whining very, very loudly when a small impact of our current desperate situation starts to hit them, as opposed to hitting other people.

Ironically an apt description of the Minister for Social Protection herself

 

[DerKaiser]

I don't believe that the dramatic over-reaction seen here (similar to the dramatic over-reaction to the 'raiding of private pensions) is genuine. It is generally coming from those people who call loudly for cutbacks and reductions for other people, but suddenly start whining very, very loudly when a small impact of our current desperate situation starts to hit them, as opposed to hitting other people.

It's small on average, but the consequences in individual circumstances could be severe. I just wonder if there was a 0.5% increase in employers PRSI would there be as much opposition?

The 0.6% pension levy to fund jobs creation is made a mockery of when you simultaneuously bring in measures that increase the costs/risks associated with employing people.

 

[Purple]

Hi Purple,

Can you point to a link which explains the detail of the proposal?

I thought this was what Employers PRSI was for? If employers have to pay sick leave or take out insurance to cover themselves then why should the have to pay very high Employers PRSI?

Is the proposal for the introduction of a manditory sick pay scheme?

aj

PS I dont think this serious thread belongs in Letting Off Steam. If its ok with the OP then Ill move it and delete the rants.

[broken link removed] article in the Irish Times discusses the proposal.
My understanding is that employers would have to give employees 4 weeks sick-pay a year, after which the government would step in.
I presume the rate would be the same as they would get at the moment, i.e. welfare rates, but I haven’t seen any details either.
It seems to be a kite flying exercise.

I have no problem with you moving the thread. I posted it here as I thought that, due to the nature of the issue and lack of details available, it would end up in Letting off Steam.

 

[z107]

It's funny how employers in the UK and elsewhere in Europe manage to meet this 'onerous' provision without crashing and burning. Maybe they're just smarter employers over there.

If you are referring to SSP (statutory sick pay) in the UK, then there is a recovery scheme whereby employers claim most of the money back.
http://www.hmrc.gov.uk/helpsheets/e14.pdf

 

[Marion]

I guess some of us have forgotten the mantra "we must all share the pain".

Marion

 

[Chris]

And of course all those people who are currently struggling to pay their mortgage and other bills and day-to-day expenses will also have no problem saving up 4 weeks wages to put away for a rainy day

So the alternative is to further burden private companies and make it even more difficult for them to expand and create jobs and less attractive for foreign companies? The time to prepare for bad times is not in the bad times but before. Unfortunately this is something that the vast majority of Irish people completely ignored.

 

[DB74]

So the alternative is to further burden private companies and make it even more difficult for them to expand and create jobs and less attractive for foreign companies? The time to prepare for bad times is not in the bad times but before. Unfortunately this is something that the vast majority of Irish people completely ignored.

I'm not sure what your point is here Chris

I'm totally against bringing in the "employer pays" scenario

 

[oldnick]

I'm afraid some people think that owners of companies ,no matter how small those companies, are rich exploitive capitalists. The fact that many are struggling small enterprises employing a handful of people (who ,unlike the owners can get redudnacy, the dole and other benefits) doesn't occur to those critics.

Many of those owners earn no more than their workers and ae far less protected.
It may be a nice idea to pay people for staying at home due to illness but I know that this will ultimately affect the earnings of their fellow workers and/or the price of the company products and ultimately the viability of the company.

The next step I gather is reducing the redundancy refunds, followed by an increase in maternity leave -which will include fathers. Soon after, no doubt,there'll be demands for thirty-hour weeks.

Ireland is moving in the direction that European governments are trying to reverse as they have seen the consequences of non-stop goodies to all and sundry.

 

[T McGibney]

I guess some of us have forgotten the mantra "we must all share the pain".

Marion

This is an utterly ridiculous statement. Have you any idea of the numbers of employers who are currently struggling to keep their staff in jobs?

 

[ajapale]

The employer pays PRSI to "cover" sick pay. The employee pays PRSI to "cover" sick pay.

If the "pain" were to be fairly distributed then the empoyer should pay approximately half and the the employee should carry the other half of the standard rate. This should apply to the public and private sectors alike.

I wonder what effect this would have on absenteeism rates?

 

[Firefly]

The employer pays PRSI to "cover" sick pay. The employee pays PRSI to "cover" sick pay.

If the "pain" were to be fairly distributed then the empoyer should pay approximately half and the the employee should carry the other half of the standard rate. This should apply to the public and private sectors alike.

I wonder what effect this would have on absenteeism rates?

Now there's a great idea.