What is in store for Employers in 2025?

Minimum Wage and Living Wage

From January 1st, 2025, Ireland’s national minimum wage increased by €0.80 to €13.50 per hour for all employees aged over 20. This increase is tied to an ongoing commitment by the government to align with the national living wage by next year which will replace the national minimum wage. The target living wage is 60% of the median wage and is expected to be approx. €14 – €15 per hour.

Statutory Sick Pay

While it was anticipated that statutory sick pay (SSP) would rise from five to seven days per calendar year in January 2025, this change has not yet been implemented, and SSP currently remains at five days per year. It is still uncertain as to whether the incoming government will proceed with the planned increase.

Auto-Enrolment

The highly anticipated auto-enrolment scheme which has been named “My Future Fund” is set to begin on 30 September 2025.

Under this new scheme, all employees aged 23 to 60, earning at least €20,000 annually and not already participating in a qualifying pension plan, will be automatically enrolled in a state-operated retirement savings system. Auto-enrolment will work through the National Automatic Enrolment Retirement Savings Authority (NAERSA), which will administer the scheme and manage employee savings. Contributions will be made by the employee, employer and the State, with the amounts phased in over a 10-year period. Initially, employee contributions will start at 1.5%, with employer contributions matching this, and the State contributing 0.5%. By year 10, contributions will rise to 6% from both the employee and employer, with the State adding 2%. This change will affect all employers in Ireland, making early preparation crucial.

While many businesses already offer pension options such as a company pension scheme or PRSA, there will still be employees who need to be enrolled in the auto-enrolment scheme. Employers should review existing pension eligibility and coverage, including for new hires, to assess who will be eligible for auto-enrolment.

For more information read our last article on Auto Enrolment.

Retirement age – General Scheme of the Employment (Restriction of Certain Mandatory Retirement Ages) Bill 2024

In March 2024, the General Scheme of the Employment (Restriction of Certain Mandatory Retirement Ages) Bill 2024 was published. This bill aims to fulfill a key commitment outlined in the Government’s response to the Pensions Commission Recommendations and Implementation Plan.

The objective of the Bill is to bring mandatory retirement ages in employment contracts in line with the State Pension and allow, but not compel, an employee to stay in employment until the state pension age, currently 66, unless the employee consents to an earlier retirement age. This consent provision recognises that many employees may want to retire at the contractual retirement age.

Employers must have clear and legitimate justifications for implementing and enforcing a mandatory retirement age and failure to do so can result in substantial compensatory awards for discrimination. As the new law approaches, employers should give due regard to having a retirement age of 66 to avoid uncertainty in dealing with notices of objection.
For more information read our last article on Retirement.

The Maternity Protection, Employment Equality and Preservation of Certain Records Act 2024

The provisions of this Act relating to maternity leave and restrictions on the use of non-disclosure agreements (NDAs) came into force on 20 November 2024.

The Act introduces several significant provisions such as the right to postpone maternity leave in the event of a serious health condition of the employee. A pregnant employee or an employee on maternity leave who has a serious medical condition may notify their employer in writing of their intention to postpone the commencement of all or part of their maternity leave for a period of between 5 and 52 weeks.

Employers should review their maternity leave policies, with a view to tailoring these to accommodate the new right to postpone leave.

The Act also provides for restrictions on non-disclosure agreements. Subject to certain conditions, NDAs that attempt to prevent an employee from sharing information about allegations (or the employer’s actions in response to those allegations) related to discrimination, victimisation, harassment or sexual harassment are considered null and void. However, where an employee has requested an NDA, provided the employee receives independent legal advice in writing prior to entering into the agreement, it will be enforceable, this is called an excepted NDA. All reasonable legal costs and expenses associated with receiving the legal advice are to be covered by the employer.

Directive on Adequate Minimum Wages in the European Union

The EU Directive on Adequate Minimum Wages aims to strengthen collective bargaining on wage setting to ensure workers receive fair and adequate pay. With Ireland’s collective bargaining coverage currently at 39% which is below the 80% threshold set by the Directive, there is a requirement to establish a framework that supports and promotes collective bargaining. In order to comply, Ireland must develop an action plan by the end of 2025, outlining specific measures and a timeline to progressively increase collective bargaining coverage. The ultimate goal of the Directive is to enhance wage protection and expand the number of workers covered by collective bargaining agreements across the EU.

EU Pay Transparency Directive

Employers should also be preparing for the implementation of the EU Pay Transparency Directive, which should be transposed into domestic law by June 2026. While Ireland’s current gender pay gap reporting framework meets some of the Directive’s requirements, additional obligations will be introduced. These include a ban on pay secrecy ensuring that job candidates have the right to know the salary attached to a role.

The focus is also shifting towards equal pay, with businesses needing to justify their pay structures and demonstrate that there is no direct or indirect discrimination. Employers will be required to disclose salary ranges in job postings and will be prohibited from asking candidates about their previous pay. Additionally, employees will have the right to request information on individual pay levels and average pay by category. A key change under the Directive is that the burden of proof will now fall on employers, meaning they must provide evidence that any pay disparities are not discriminatory. With these changes on the horizon, early preparation will be crucial to ensure compliance and transparency in pay practices.

Updates to Equality Legislation – The General Scheme of the Equality (Miscellaneous Provisions) Bill 2024

On 15 January 2025, the General Scheme of the Equality (Miscellaneous Provisions) Bill 2024 was published, proposing to amend the Employment Equality Act 1998 as amended and transpose a number of the requirements of the Pay Transparency Directive.
A key amendment is the requirement for employers to demonstrate that specific criteria sought from job applicants are necessary and proportionate for a particular role. As mentioned in the EU Pay Transparency Directive section above, employers will also be obligated to include information about salary levels or ranges in job advertisements, ensuring greater transparency for prospective employees and addressing pay discrimination, including gender pay gaps. Additionally, employers will no longer be permitted to ask applicants about their current or previous remuneration.

Jurisdiction over equal status complaints involving licensed premises will shift from the District Court back to the WRC, streamlining the process for handling discrimination cases related to goods and services. Compensation limits under the Equal Status Act will be raised significantly to align with EU standards for remedies that are fair, proportionate, and impactful. Adjudicators will also be provided with clear guidelines to ensure consistency and fairness in their decisions, taking into account the seriousness of each case. It remains to be seen if all proposed changes will be included in the draft of the Bill.

Gender Pay Gap Reporting

The deadline for employers with 150 or more employees to publish their gender pay gap (GPG) reports has now passed and from 2025, businesses with 50 or more employees will be required to report. Employers must select a snapshot date in June 2025 and calculate their GPG data based on that date. Additionally, government guidance indicates that the reporting deadline will be moved forward to November, giving employers a shorter window of five months to compile and submit their reports.

EU Platform Work Directive

This EU Directive which came into force on 1 December 2024, aims to improve working conditions for the 28 million people engaged in platform-based work across the EU, including those working for companies like Uber, Deliveroo, Uber Eats, and Just Eat. Member states now have two years to implement the Directive into national law, introducing significant changes to the regulation of digital platform work.

A key element of the Directive is the introduction of the Presumption of Employment, meaning that individuals working for digital platforms will be presumed to be employees unless the platform can prove otherwise. This shifts the burden of proof onto employers, ensuring that workers do not have to fight to establish their employment status. If workers meet certain criteria indicating control and direction by the platform, they will be entitled to employment rights and protections.

Additionally, the Directive enhances transparency and oversight of algorithmic management. It mandates that automated decision-making systems used in human resources management must be monitored by qualified personnel and workers must have the right to contest automated decisions that affect their employment.

For companies operating in the digital labor sector, the impact of this Directive will be significant. Employers should assess whether their operations fall within its scope and prepare for compliance. As member states work to incorporate the Directive into national legislation, businesses must stay ahead of these changes to ensure they meet new legal obligations.

AI in the Workplace – The EU Artificial Intelligence (AI) Act

Finally, the use of AI in the workplace will be high on the agenda for many employers and employees in 2025 as the AI Act comes into effect this month, February 2025. The Act will have a significant impact, particularly in the areas of recruitment and decision-making in the employment lifecycle and it is essential that employers ensure the obligations contained in the Act are adhered to.

The EU Artificial Intelligence (AI) Act establishes a phased regulatory framework to ensure AI systems in the EU are safe, ethical, and trustworthy. Rather than imposing a one-size-fits-all approach, the regulation follows a risk-based framework, categorizing AI systems into four levels of risk to ensure proportionate oversight. Special provisions are also in place to support SMEs.

Key milestones include the enforcement of prohibited AI practices by February 2, 2025, the designation of regulatory authorities and penalties by August 2, 2025, and the implementation of rules for high-risk AI systems between 2026 and 2027. Non-compliance can lead to fines of up to €35 million or 7% of global annual turnover, with reduced penalties for SMEs. Businesses must stay informed and prepare for these evolving regulations.

Conclusion

Employers must navigate a rapidly evolving regulatory landscape shaped by both Irish employment law and EU directives. Key changes, from wage increases and pension auto-enrolment to stricter equality and transparency measures, will require businesses to stay proactive in their compliance efforts. Additionally, significant EU-driven reforms such as the AI Act, the Pay Transparency Directive and the Platform Work Directive, will reshape workplace policies and operational practices.

With many of these changes carrying substantial financial and legal implications, early preparation is essential. Employers should review policies, assess compliance gaps and implement necessary adjustments to align with new obligations.

By staying informed, businesses can ensure compliance while maintaining a well-regulated and legally sound work environment.

This article was written by Sharon Sweeney, HR Consultant at Action HR Services.

DISCLAIMER:
The information in this article is provided as part of the Action HR Services Blog. Specific queries should be directed to a member of the Action HR Services Team and it is recommended that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct on February 11th 2025.