If the salary is increased, should the sick pay allowance also be increased?
In the workplace, it is important to know the rights and obligations we have as employees, as well as the benefits in addition to our salary. One of these is the sick pay allowance, which many employees have doubts about. In this complete guide, we will answer frequently asked questions such as
Until when is the temporary sick pay disability allowance paid,
How is it calculated?
If the salary is increased, should the sick pay leave allowance be increased?
What is the sick pay complement?
The sick pay Temporary Incapacity supplement (complemento IT), also known as temporary incapacity benefit, is a benefit granted to workers when they are on sick leave.
This financial assistance is intended to compensate for the loss of income suffered by employees while they are recovering from illness or injury.
It is common for collective agreements to provide for a wage supplement in the event that workers go on temporary incapacity (TI).
The purpose of this supplement is for the worker to receive an income higher than that obtained from the Social Security, normally reaching 100% of their regulatory base (and not the 60 or 75% provided for by law) or of their salary, or to receive remuneration from the first day of sick leave (and not from the fourth day, in the event that this is due to common contingencies).
However, the regulations vary from one collective agreement to another.
Until when is the IT allowance paid?
The Temporary sick pay Incapacity Supplement is paid until the worker is medically discharged or until he/she is granted a pension for permanent incapacity. It is important to note that the worker must notify the company of his incapacity and present the corresponding medical documents in order to receive this supplement.
How the sick pay leave top-up is calculated: Formulas and important considerations
The calculation of the sick pay leave allowance is an important issue for workers and employers.
To determine the amount of the sick pay leave supplement, specific formulas are used that take into account the worker’s basic salary and the duration of the temporary incapacity.
It is generally calculated by multiplying a set percentage by the basic daily wage.
However, it is important to bear in mind that there are additional considerations, such as statutory ceilings and vesting periods.
In addition, it is essential to comply with the legal requirements and to submit the necessary documents in order to receive the sick supplement.
It is advisable to consult an expert or review current legislation for precise information on how this benefit is calculated.
Remember
The company collective agreement may regulate a pay supplement.
However, if the sectoral agreement also regulates it more favourably, the sectoral agreement has priority of application.
Should you increase the sick pay allowance if your salary goes up?
One of your employees is on sick leave and, as provided for in your collective agreement, receives a sick pay allowance for that reason. If the salary is increased, must this allowance also be increased?
As with all allowances, it is the applicable collective agreement that determines how they are calculated, accrued and consolidated.
Consequently, in the event of a wage increase in the collective agreement, the first thing you should check to see if it affects the TI allowance is the regulation in the agreement.
See some examples here.
IT allowance in the Toledo hotel and catering industry agreement
The Toledo provincial collective agreement for the hotel and catering industry provides that, in cases of common or occupational illness or accident at work, the company will complement workers (except those with training contracts) the benefits for temporary incapacity up to 100% of the basic salary, the seniority complement, the pro rata of extra payments and other remuneration concepts.
And if the new wage tables of the collective agreement establish a wage increase, the affected worker will also be entitled to an increase in this temporary incapacity allowance.
IT allowance in the security companies’ collective agreement
The State Agreement for security companies stipulates that companies will complement the benefits for TI up to 100% of the salary tables (minimum salary fixed in the agreement), including seniority and, if applicable, the part corresponding to the hazard bonus, without the extra payments being reduced.
It also establishes that if the TI benefit is higher (because the worker is paid more than the collective agreement), this will be received without further payment, i.e. the supplement will not be paid.
On the other hand, if there is an increase in the base wage of the collective agreement, there will also be an increase in the TD supplement (unless, as we have said, the TD benefit is higher than the base wage of the collective agreement).
How to avoid the increase of the IT allowance in salaries?
Reach an agreement with workers
Propose a clause
To avoid the increase of IT allowances, agree with your workers on a clause stating that:
- During situations of TI, the worker will receive a salary supplement that increases the allowance received up to 100% of their remuneration prior to the start of the situation of TI.
- The previous remuneration shall be considered to be the fixed remuneration of the month prior to the TI and the average of the variable remuneration of the previous 12 months.
- Likewise, it may expressly exclude the increase in the supplement due to the revision of the Minimum Interprofessional Wage (SMI), the wage increases in the collective agreement or the agreements reached on wage matters with the workers’ legal representatives.
