by Crystel Robbins Rynne, Chief Operating Officer at HRLocker
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 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.
National minimum wage increase
The first change employers should take note of is the increased minimum wage. From 1 January 2024, workers aged over 20 will be subject to a rise from €11.30 to €12.70 – a 12% increase.
The minimum wage increase could significantly impact some employers’ bottom line. Be sure to conduct cash flow forecasts and analysis to see how the wage increases will affect your business in the coming months.
Even if you pay all employees above the minimum wage, there’s a good chance the rise will still impact you. 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.
Ensure you update your payroll system with the new rate before January 2024 and communicate the change to affected employees. You can learn more from the Citizens Information website.
Introduction of planned living wage
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, the 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. It 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 coming years. You can learn more about the proposed living wage here.
New sick pay entitlements
From 1 January 2024, paid sick leave entitlement will increase from three days to five days.
Bear in mind 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 a total of 10 days of paid sick leave (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.
If you don’t already provide a company sick leave scheme, this could mean more extensive planning for illness cover and accommodations. Ensure you also update employee handbooks and guidance to reflect the raises.
Improvements to parent’s leave and benefits
From August 2024, parent’s leave will be extended by two weeks – from seven to nine weeks of 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 parent’s leave. And, should their leave fall across public holidays, you should also note that they’re entitled to take these as holidays.
Parents-to-be can also access Parent’s Benefits, equivalent to €262 a week, provided they’ve paid enough PRSI contributions. The Department of Social Protection pays this benefit, but you can choose to top up parents’ pay during this period.
Longer parent’s leave means you’ll need to be on the ball with workforce planning. But given the notice period, you’ll have time to put measures in place should your employees take parent’s leave.
Right to request remote working
Employees with at least six months 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 the WRC will publish. The government of Ireland already provides a handy remote working checklist to help you manage requests. If you refuse a request, you must give reasons to the employees.
Another cost increase to be aware of is the rise in PRSI – an additional 0.1% from October 2024.
Your employees will be responsible for paying this increased rate, and you’ll need to forward any employee contributions to Revenue. While this is a relatively low-touch measure for employers to deal with, be sure to reflect it in your payroll software ahead of the change.
Auto-enrollment pension scheme
From September 2024, employees earning above €20,000 between the ages of 23 and 60 will be automatically enrolled on a pension scheme if they aren’t already on one. Your employees will be able to choose from four different pension schemes. Those outside these parameters can opt-in if they want.
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. Still, 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.
Increase cost of business grant
You might be wondering how you’ll foot the bill by this point. Smaller businesses could access the Increased Cost of Business grant through 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.
You need to contact your local authority and provide them with your bank details to get this money. The grants will be paid in the first quarter of 2024.
About the author
Crystel Robbins Rynne has worked with HRLocker since its inception. As COO, she is responsible for maintaining and driving operational results within the company. She is part of the executive management team and is also an Employee Experience advocate and host of the popular HRLocker Podcast.