13/04/2012

Forcing Employers To Pay More Costs Would Equate To 2,500 Jobs

IBEC, the group that represents Irish business, have published new analysis of the government's statutory sick pay proposals, which said the cost of shifting massive additional liabilities onto employers would equate to the cost of employing 2500 people. The group said the proposals, put forward by the Minister for Social Protection Joan Burton TD, would put struggling firms out of business, cost jobs and force many companies to reduce pay and benefits.

The IBEC analysis entitled 'Sustaining employment and the implications of Statutory Sick Pay for Ireland' said:

•Forcing employers to pay additional employment costs to cover the cost of statutory sick pay would equate to the cost of employing 2,500 people

•For over 40% of employers in Ireland – mainly smaller employers who currently have no sick pay costs – statutory sick pay would represent a significant additional cost. For all employers, large and small, this new cost burden will be seen as a tax on jobs and will particularly hit smaller, more vulnerable employers, operating in low-margin businesses.

•IBEC does not believe that the proposed change would result in any reduction in absenteeism or long-term illness rates. Private sector employers do not need any additional incentive to manage the cost of absence, with about 60% of companies already paying some element of sick pay. Absence already costs Irish business €1.5 billion per annum.

•The Department of Social Protection has selectively argued that Ireland is in out of line with other countries on this issue, but failed to acknowledge that in many countries statutory sick pay is not paid by employers, including the US, Canada, Denmark, Korea and Portugal.

IBEC Director Brendan McGinty said: "Employees and employers already make obligatory PRSI contributions to support social welfare provision. Any move to increase this already substantial contribution will come at a serious cost and would force all employers to reassess their sick pay policies. Small companies, many operating in a depressed domestic economy, would be hit the hardest.

"The sick leave proposal is at odds with the Action Plan for Jobs, which committed the Government to reducing red tape and making Ireland more competitive so that successful businesses and entrepreneurs can create jobs. The government needs to start coming up with sensible and economically sound ways of reducing expenditure, instead of just shifting costs to employers."

(CD)

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