Employment and Pensions
IMMIGRATION: SIGNIFICANT CHANGES TO EMPLOYMENT PERMIT REGIME FROM 17 JANUARY 2024 UNDER NEW REGULATIONS
On 20 December 2023, the Outcome of the Review of the Occupations Lists for Employment Permits was published which made several important recommendations. On 22 December 2023, new Regulations were published that implemented significant changes to the Irish Employment Permit system, some of which were recommended in the Review.
Employers who engage non-EU/EAA/Swiss staff members may wish to review their 2024 and 2025 recruitment plans to ensure that they are ready for these changes, and in particular the potential cost implications for hiring staff.
The key feature of the changes is that the minimum annual and hourly remuneration thresholds (i.e. the minimum pay for an employee to be eligible to receive a permit) for most new employment permits will increase with effect from 17 January 2024. These new thresholds will impact a range of permits and in some cases involve a significant increase to the current thresholds.
Significantly, the Government has indicated its intention to pass further legislation to increase minimum annual remuneration thresholds in 2025 and 2026, in line with the recommendations contained in the Review. The anticipated remuneration threshold for a general employment permit by January 2025 is €39,000 under these proposals, a 30% increase in remuneration thresholds in twelve months. Other permit types are similarly impacted. Our briefing on this development is available here.
WORK LIFE BALANCE AND MISCELLANEOUS PROVISIONS ACT 2023
The Work Life Balance and Miscellaneous Provisions Act 2023 was signed into law in April 2023. The purpose of the 2023 Act is to transpose into Irish law the EU Work-Life Balance Directive for carers and parents. An overview of the rights conferred by the Act is available in our briefing here. However, these rights have been introduced on a staggered basis with the right to request flexible working arrangements and the right to request remote working expected to be introduced in early 2024.
See our briefing (here) on the rights introduced on 3 July 2023 regarding leave for medical care purposes and an expansion of rights under maternity protection legislation.
Our briefings on the right to paid domestic violence leave (which came into effect on 27 November 2023), can be viewed here and here.
Prior to the commencement of these rights, the Workplace Relations Commission must publish a Code of Practice to provide further guidance. The Government recently confirmed that it anticipates that the Code will be published towards the end of January 2024.
The deadline for transposition of the Directive into Irish law was 2 August 2022. In November 2023, Ireland, along with Belgium and Spain, was referred by the European Commission to the Court of Justice of the European Union for failing to notify the Commission of its full transposition measures for the Directive.
UPDATED CODE OF PRACTICE ON DETERMINING EMPLOYMENT STATUS TO BE PUBLISHED
In October 2023, the Supreme Court delivered a significant judgment in Revenue Commissioners v Karshan (Midlands) Ltd t/a Domino’s Pizza [2023] IESC 24 in which it examined in detail the law in Ireland on the distinction between employees and self-employed persons and reformulated and restated the law. For a detailed analysis of this significant case, see our briefing here. Revenue announced on 3 January 2024 that the Code of Practice on Determining Employment Status is being reviewed and updated by Revenue, the Department of Social Protection and the Workplace Relations Commission to reflect the judgment (Revenue eBrief No. 003/24). In addition to updating the Code, Revenue is expected to issue guidelines on the judgment and its impact on the employment status of individuals for tax purposes in early 2024.
COLLECTIVE REDUNDANCIES IN INSOLVENCY SITUATIONS – CHANGES AHEAD
The Government has recently published the Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Bill 2023 (here). The Bill will deliver on key aspects of the Programme for Government commitments as set out in the Plan of Action – Collective Redundancies following Insolvency.
The Bill proposes amendments to the existing collective redundancy process to strengthen employee protections in insolvency situations. It also provides for the establishment of a statutory expert Employment Law Review Group to assess employment and redundancy law on an ongoing basis to ensure it is fit for purpose. In addition, it will amend the Companies Act 2014 to improve the dissemination of information to employees as creditors in a corporate insolvency situation. For more information on what is proposed in the Bill, see our briefing here.
INCREASE TO STATUTORY SICK LEAVE FROM 1 JANUARY 2024
Statutory sick leave under the Sick Leave Act 2022 increased from three days to five days from 1 January 2024. As a result, an employee who is incapable of work due to illness or injury is entitled to five days paid statutory sick leave per year. For more details, see our briefing here.
“Statutory sick leave under the Sick Leave Act 2022 increased from three days to five days from 1 January 2024.”
GENDER PAY GAP REPORTING –EXTENDED TO EMPLOYERS WITH 150 OR MORE EMPLOYEES
Gender pay gap reporting obligations were introduced in Ireland in 2022 on a staggered basis. For 2022 and 2023, employers with 250 employees or more were obliged under the Gender Pay Gap (Information) Act 2021 and in line with the Employment Equality Act 1998 (Section 20A)(Gender Pay Gap Information) Regulations 2022, to publish information relating to the pay of their employees for the purpose of showing whether there are differences in such pay referable to gender and, if so, the size of such differences.
In 2024, the gender pay gap reporting obligation will apply to employers with 150 employees or more. The obligation will be further extended in 2025 to employers with 50 or more employees.
To comply with their gender pay gap information obligations, employers with over 150 employees are now required to choose a “snapshot date” in June 2024. Employers must then compile and publish the required gender pay gap information within six months from that snapshot date, in December 2024. The reference period for the calculations is the 12 months prior to, and including, the snapshot date.
Further detail on reporting obligations are set out in our briefing here.
EU PAY TRANSPARENCY DIRECTIVE
The deadline for the transposition of the Pay Transparency Directive into Irish law is 7 June 2026. Irish employers now have two and half years to prepare for its implementation. The Directive is part of a wider EU strategy seeking to tackle concerns about the enforcement of the principle of equal pay between men and women by eliminating pay secrecy, promoting transparency in pay setting and career progression and strengthening enforcement mechanisms.
For more information on the core provisions of the Directive and considerations for employers, see our detailed briefing here.
“The Automatic Enrolment Retirement Savings System Bill is listed for priority publication in the Government’s Autumn Legislative Programme.”
NEW EMPLOYER WITHHOLDING OBLIGATION SET OUT IN THE FINANCE (NO. 2) ACT 2023
The Finance (No. 2) Act 2023 provides for a change to the methodology for the collection of tax on any share activity on or after 1 January 2024, from self-assessment to the PAYE system.
The Act requires employers to report and make withholdings under the PAYE system on or after 1 January 2024 upon the exercise, assignment, or release of unapproved share options by employees/directors. This contrasts with the current system which requires employees/directors to file a return under the self-assessment system.
The Act was enacted on 18 December 2023, leaving employers with a short lead-in time to create and implement processes and procedures to ensure that this new compliance obligation is managed from the 2024 tax year onwards.
AUTOMATIC ENROLMENT
The Automatic Enrolment Retirement Savings System Bill is listed for priority publication in the Government’s Autumn Legislative Programme. It is currently anticipated that the auto-enrolment system will commence in the second half of 2024.
Auto-Enrolment is designed to operate as a voluntary system to promote pension coverage so that employees will have access to a workplace pension savings scheme which is co-funded by the State and their employer.
For further information on the Bill, see our detailed briefing here, or alternatively have a listen to our podcast here.