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Employers warn that Burton’s sick pay proposals will result in job losses

The Small Firms Association and the Irish Business and Employers Confederation have condemned the government’s plans to shift the burden of sick pay on to employers.

Image: Svenstorm via Flickr

EMPLOYER INTEREST GROUPS have warned that the government’s plans to make them foot the bill for the first four weeks of employees’ sick pay will result in job losses.

Social Protection Minister Joan Burton today held a consultative forum that considered plans to make employers foot the bill for the first four weeks that workers are off sick with the “feasibility and potential impacts” of such measures discussed.

She is reported to have told the forum in Dublin that the number of people claiming illness and disability payment had increased by 40 per cent over a ten-year period from 2001 to 2011 and cost the State €876 million last year alone.

Burton estimates that the changes could save some €89 million per year and hopes her proposals can be finalised in time for the next budget, RTÉ reports.

The proposals were welcomed in some quarters but the Small Firms Association (SFA) condemned the idea saying that it would result in job losses and will act as a “strong disincentive” for job creation.

Its words were echoed by the Irish Business and Employers Confederation (IBEC) which has consistently criticised the plans to shift the cost of sick pay onto employers.

“This amounts to an additional flat tax on employment, which all businesses will have to pay regardless of their profitability, and is completely unacceptable,” SFA director Patricia Callan said today.

“Employers and their employees already contribute significantly to the social welfare bill through the PRSI system.”

She added: “The Minister is going about this in entirely the wrong way. At the very least, a regulatory impact assessment should be undertaken immediately to assess the impact of the proposal on jobs and competitiveness and the cost/benefit to small business.”

Meanwhile, IBEC said today that the government was just “shifting” costs onto employers and added that the plans were at odds with the government’s Action Plan for Jobs announced last week.

“Putting additional social welfare costs onto employers is simply an extra tax on employment, at a time when jobs should be the priority,” IBEC Director Brendan McGinty said.

“The Government needs to start coming up with sensible and economically sound ways of reducing employment costs, instead of just shifting costs onto employers.”

Burton puts forward plan to make employers pay for sick leave

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