Upcoming Legislative Changes in 2024

Update on Statutory Sick Pay (SSP)

The Sick Leave Act 2022 came into force in January 2023. Employees were entitled to three days paid statutory sick leave from 1^st January 2023 which has now been increased to five days from 1^st January 2024.  It is intended that it will increase to seven days in 2025 and ten days in 2026.  

This statutory entitlement applies to all employees who have rendered continuous service for a period of 13 weeks or more. The eligibility for sick leave starts from the initial day of absence and does not necessitate consecutive days. To avail of statutory sick leave, employees must provide a medical certificate from a registered medical practitioner, affirming their incapacity to work.

SSP is provided to all employees at a rate of 70% of their wage but subject to a daily threshold of €110 per day. It is expected that this maximum cap may change and be amended over time to take account of changes in income and inflation.

Employers with an existing sick leave policy in place are excused from the responsibilities outlined in the Act if they can demonstrate that their current company sick pay benefits are either as favourable or more favourable than the statutory entitlement.

If an employer fails to provide statutory sick pay, then an employee who submits a complaint may be awarded four weeks’ pay in addition to their statutory sick leave entitlement.

National Living Wage

The Government announced the introduction of a national living wage for employees at the end of 2022.  The national living wage will be set at 60% of hourly median wages. It will be introduced over a four-year period and will be in place by 2026, at which point it will replace the national minimum wage.

The National Minimum Wage Order 2023 set the national minimum hourly rate of pay to increase from €11.30 to €12.70 per hour for employees aged 20 years and older from 1^st January 2024. The rates of pay for young workers are as follows:

• Aged 19 = €11.43
• Aged 18 = €10.16
• Under 18 = €8.89

The Work Life Balance and Miscellaneous Provisions Act, 2023

Right to Request Remote Working

The provisions of employees’ rights to request remote working have not yet come into force.  When operational, all employees will have a right to request remote working and employers will be required to have regard to a Code of Practice when considering requests. The Code of Practice has not yet been published, but it is expected that it will have a statutory status and that it will include guidance for employers and employees on their obligations. The employees will need to have completed 6 months of continuous service before they are entitled to request a remote working arrangement. They will be required to submit the request in writing not later than 8 weeks before the proposed commencement of the remote working arrangement. The employers will have to either approve the request in writing or refuse it setting out reasons in writing no later than 4 weeks after receiving the request. The code of practice is expected to be published by the end of January 2024.

Right to request flexible working arrangements for caring purposes

The Work Life Balance and Miscellaneous Provisions Act 2023 also introduced the right to request flexible working arrangements for caring purposes, for parents and carers.  This right will apply to employees who have 6 months’ continuous service with their employer.  Similarly, employees must submit a signed request in writing not later than 8 weeks before the proposed commencement of the flexible working arrangement outlining the form of arrangement requested, the commencement date and duration, while the employers will have to respond within 4 weeks of receiving the request. This provision will come into force following the publication of the code of practice, as referred to above. The Minister will review whether the right to request a flexible working arrangement should be extended to all employees after 1 year and no later than 2 years from commencement of this legislation.

Gender Pay Gap Reporting

Although the Gender Pay Gap Information Act 2021 has already taken effect as of 31^st May 2022, there is a planned expansion of the legislation’s scope in 2024. In June 2022, employers with 250+ employees were required to choose a ‘snapshot’ date within that month, to prepare a report on the gender pay gap (GPG), for the employees in their company on that date and to publish the report 6 months later in December 2022 and then again in December 2023. GPG reporting initially applied to public and private sector organisations of 250+ employees, but the scope is set to be extended to organisations with 150+ employees in 2024 and to organisations with 50+ employees from 2025.

An employer has to report on:

• The mean and median wage gap for full time, part time and temporary employees.
• The mean and median bonus gap for full time, part time and temporary employees. 
• The proportion of men and women that received bonuses.
• The proportion of men and women that received benefits in kind.
• The proportion of men and women in four quartiles. 

The employer must set out in the report its opinion as to the reasons why a GPG exists in the company and the measures (if any) that are being taken or proposed to be taken to eliminate or reduce the GPG. Employers must publish or make the report available either on the employer’s website in a manner that is accessible to all the employer’s employees and to the public. Should the employer not have a website, it must make the data available in a physical form for inspection during normal business hours by employees and the public at its registered office or principal place of business.

Employment Permits System Update

In an announcement on 20^th December last year, the Government significantly expanded Ireland’s employment permit system and increased the salary requirements for most employment permit types. Neale Richmond TD, Minister of State for Business, Employment and Retail, announced a comprehensive list of changes to the employment permits system which is the largest expansion of the employment permit system since its inception.

In summary, 11 roles have been added to the Critical Skills Occupations List and 32 roles have been removed from the Ineligible Occupations List making them eligible for General Employment Permits, so long as the other requirements are met. These changes focus on supporting specific sectors experiencing labour shortages. Salary requirements will rise for most General Employment Permit holders from €30.000 to €34.000, while for healthcare assistants and home carers salary requirement will increase from €27,000 and horticultural workers and meat processor salary requirement will increase from €22,000 to €30,000 in January 2024. Critical Skills Employment Permits with a degree will rise from €32,000 to €38,000 per annum.

The Minister introduced an extension of existing quotas for dairy farm assistants, butcher/deboners, meat processors and horticultural workers.

Changes to the salary requirements and extension of existing quotas are effective as of 17^th January 2024.

In addition to the above changes, a roadmap was announced which will result in the salary thresholds for certain employment permits being increased again in January 2025, July 2025, and in January 2026.

Further changes in the area of employment permits are also expected to come into effect in 2024.

Pension and Retirement Age Reform

Automatic Enrolment Retirement Saving System Bill 2022

On 29^th March 2022, the Minister for Social Protection announced the details of the Automatic Enrolment Retirement Savings System for Ireland. The Automatic Enrolment Retirement Savings System Bill 2022 provides for an auto enrolment (AE) system to be set up in Ireland, with enrolments expected to commence in the latter half of 2024.

The Bill introduces several key features:

• Automatic Enrolment: All employees aged 23 to 60 who are not in an occupational pension scheme already and earning over €20,000/year will be enrolled automatically.
• Contribution Structure: Employer and employee contributions start at 1.5% of gross salary, increasing every three years to a maximum of 6% from year 10. Employers match employee contributions, and the State contributes €1 for every €3 saved by the employee.
• Opt-Out and Re-Enrolment: Workers can opt-out or suspend contributions after six months, but they will be automatically re-enrolled after two years, with the option to opt out again after another six months.
• Oversight: The Central Pensions Authority (CPA) will oversee the Automatic Enrolment (AE) system, acting as custodian for participants.

The legislation is currently being drafted so many of the details and concerns raised are still being worked out. It is intended that the system is easy for employees and employers to engage with so that they can trust it and buy into it. Furthermore, the system is intended to be designed to minimise the administrative burden and legal responsibility on employers, which has always been a blocker on the provision of pension systems.

Flexible State Pension System

The Government announced the introduction of a flexible State pension system where individuals can postpone their entitlements from the current age of 66 years to 70 years of age in consideration of an increased State pension payment.

This reform may pose challenges for employers, as it could result in increased or new requests for extended working. Employees will have the right to defer their State pension entitlements, allowing them to postpone receiving them from age of 66 to as late as 70. This extension may widen the income gap and the demand for employment, potentially increasing the gap from the current 1-year span to up to 5 years.

Employees may seek to further extend their working lives incentivised by the opportunities provided by the flexible State pension system and employers need to be aware of how to approach such a situation in a correct manner. The WRC Code of Practice on Longer Working offers guidance and best practice to follow during the engagement between employers and employees in the run up to retirement including responding to requests to work beyond the retirement age in the employment concerned.

Restriction on an employer’s right to fix mandatory contractual retirement ages below the existing state pension age of 66

In 2024, standalone legislation is expected to be enacted, prohibiting contractual mandatory retirement ages below the state pension age of sixty-six, unless there are exceptional circumstances, such as safety-critical roles. Further details about this legislation will be provided once the drafting of the legislation is complete.

Parent’s Leave and Parent’s Benefit

It was announced in the Budget 2024 that Parent’s Leave and Parent’s Benefit will be extended from seven to nine weeks of leave from August 2024.

Parent’s Leave is available to employees who are a ‘relevant parent’ (e.g., a parent or adopting parent of a child; or a spouse, civil partner or cohabitant of the parent of the child; or a spouse or civil partner of the adopting parent of the child).

Parent’s Leave is available to each parent and there is no minimum length of service requirement.  The leave, which may be taken in one continuous block or as separate blocks (of no less than one week), must be taken within the first two years of the child’s birth or adoption.  There is no obligation on the company to pay an employee on Parent’s Leave, but an employee may be entitled to the State Parent’s benefit, provided the employee has sufficient PRSI contributions.

European Directive on Adequate Minimum Wage

The European Commission has set a deadline on 15^th November 2024 for transposition of the European Directive on Adequate Minimum Wage into the Irish law. The primary goal of the EU Directive is to establish a framework to improve the adequacy of statutory minimum wages and enhance effective access of workers to minimum wage protection, including through collective bargaining. The Directive explicitly promotes collective bargaining, recognising that strong and inclusive collective bargaining systems play an important role in ensuring adequate minimum wage protection.

If you need assistance implementing new employment law changes into your contracts, handbooks or company policies and procedures, get in touch with us today.

This article was written by Mislav Magas, 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 29th January 2024.