Employers have a whole host of changes to contend with, as new worker protections come into place in 2024. From wage increases to the right to request remote working – having plans in place to tackle the proposed changes should be a top priority for businesses across Ireland.
Here’s a quick guide to the new worker protections, and what they mean for employers.
The first change employers should take note of is the increased minimum wage. For workers over the age of 20, this is set to rise from €11.30 to €12.70 from 1 January 2024 – a 12% increase.
For some employers, the minimum wage increase could have a significant impact on your bottom line. Conduct cash flow forecasts and analysis to see how the wage increases will affect your business for the months to come.
Even if you pay all employees above the minimum wage, there’s a good chance you’ll still be impacted by the rise. Individuals may see this as an opportunity to seek a pay rise in line with the minimum wage increase.
You’ll need to know what you can afford and evaluate wage increases against the cost of hiring new team members. The earlier you can generate forecasts and measure the impact of this change, the better.
Make sure you update your payroll system with the new rate ahead of January 2024 and communicate the change to employees who are affected. You can learn more about what’s included in the minimum wage on the Citizens Information website.
Over the next few years, the minimum wage will steadily increase until it becomes a living wage in 2026.
The living wage will be calculated as 60% of the median wage in any given year – so final figures aren’t available just yet. The national minimum wage will remain in place until the living wage is phased in, increasing over the next few years until 2026.
The living wage will take over from the national minimum wage in 2026 and will be a mandatory requirement for all employers. Forecasting and reviewing employee salaries now will help you prepare for the change. Evaluate your salary and performance data to see if you’re on track to sustain a healthy business and fully compensate employees in the years to come.
You can learn more about the proposed living wage here.
From 1 January 2024, paid sick leave entitlement will increase from three days to five days.
Bear in mind, that the five-day entitlement applies to all employees regardless of whether they’re full-time or part-time. But the rate of sick pay (70% of gross earnings) will depend on whether they’re full or part-time.
Note also, that it’s five days per employer. An employee with two jobs is entitled to 10 days of paid sick leave in total (five days from each employer).
As the minimum wage scales to a living wage, paid sick leave will also increase over the same period. By 2026, employees will be entitled to 10 days of baseline cover in 2026.
For some businesses, this could mean planning for sick leave cover and accommodations more extensively if you don’t already provide a company sick leave scheme. Make sure you also update employee handbooks and guidance to reflect the raises (as with all other measures mentioned in this guide).
From August 2024, parents’ leave will be extended by two weeks – from seven to nine weeks entitlement. This leave is specifically for parents whose child or children are in the first two years of their life.
Your employees are required to give six months’ notice before the intended start date of parents’ leave. And, should their leave fall across public holidays, you should also make note that they’re entitled to take these as holidays.
Parents-to-be can also access parents’ benefits, equivalent to €262 a week, provided they’ve paid enough PRSI contributions. This benefit is paid by the Department of Social Protection, but you can choose to top up your parents’ pay during this period.
Longer parents leave means you’ll need to be on the ball with workforce planning. But given the notice period, employers have time to put measures in place should their employees take parental leave.
Employees with at least six months of service now have the right to request remote working.
While you may already be operating a remote work policy, it’s important to note for businesses that aren’t, you’ll need to give serious consideration to employees requesting it.
Requests to work remotely must be submitted at least eight weeks ahead of the intended start date. Once you’ve received a request, you need to respond within four weeks (this can be extended to eight weeks if you’re struggling to establish whether the request is viable).
Employers are required to weigh business and employee needs. Keep an eye out for a code of practice, which will be published by the WRC. The government of Ireland already provides a handy remote working checklist for you to manage requests. If you refuse a request, you must provide reasons to the employees.
Another cost increase is the rise in PSRI – an additional 0.1% from October 2024.
You’ll be responsible for paying this increased rate and forwarding any employee contributions to revenue. While this is a relatively low-touch measure for employers to deal with, do make sure it’s reflected in your payroll software ahead of the change.
From September 2024, employees earning above €20,000 between the ages of 23 and 60 will automatically be enrolled on a pension scheme (if they aren’t already on one). Those outside these parameters can opt into the pension if they want to.
You’ll need to match every €3 an employee contributes, and the state will provide an additional €1. During the first year, contributions will be set at 1.5% of gross pay, increasing by 1.5% every three years (up to 6%). You’ll need to match these contributions, up to an €80,000 earnings threshold. Contributions are corporation tax deductible.
The scheme is designed to be as low-lift for employers as possible, but you’ll need to review payroll systems, employee contracts, and communications to make sure the scheme is reflected there. If you already have a company pension scheme in place, this one doesn’t apply.
By this point, you might be wondering how you’ll foot the bill. Smaller businesses could access the Increased Cost of Business grant through their local authorities, to help with rising costs. Businesses that have paid up to €10,000 in rates will receive a one-off grant equivalent to 50% of the bill.
To get this money, you need to contact your local authority and provide them with your bank details. The grants will be paid in the first quarter of 2024.
With proper workforce planning and analysis, you can make sure you’re ready for the new measures.
Don’t leave it to the last minute – start preparing for these changes now. With the right tools and processes in place, you can use employee data and performance data to understand the impact of increased protections on your business.