State plan on sick pay will be disastrous, says ISME
GOVERNMENT proposals to compel businesses to provide four weeks of sick pay to their employees will have a "disastrous impact" on small and medium enterprises (SMEs), a leading trade group claimed yesterday.
A survey from ISME showed more than 90pc of companies expected to reduce staff if the measure becomes law, as their cost base increases, while nearly three-quarters of business leaders expect absenteeism to increase as a result of the new measures.
Most of these changes will come about because some 75pc of SMEs do not have a sick pay scheme in place, the survey finds.
ISME chief executive Mark Fielding said the Government plans would "lead to increased absenteeism and will result in the loss of thousands of jobs, adding to exchequer costs".
"It is estimated that the business cost of the measure will be an additional €150m per annum, but this fails to take into account increased absenteeism and lost productivity.
"We already pay PRSI insurance to cover sick pay, we pay for a replacement and now we will have to pay sick pay, which logic dictates will increase absenteeism, thereby increasing the cost further. The easier the system, the 'sicker' you get"