Emerald Technology < 1 min read

How to hire employees in Ireland

The Irish Labour Code governs the relationship between employees and employers of all types.

Below is some key information about employment in Ireland, intended to provide a brief overview of employment law in Ireland. It is not intended as a substitute for professional legal advice and counsel.

WORKING TIME AND OVERTIME

The average working week in Ireland is 39 hours. The maximum number of hours an adult can work is 48 hours per week. There are some exceptions such as the Gardaí, defence forces, employees who control their own working hours and family employees on farms. There are special conditions for employees who work on Sundays. An employer must either provide a reasonable allowance, reasonable pay increase or reasonable paid time off work. With regards to overtime, there is no legal right to pay for working extra hours and there are no statutory levels of overtime pay. However, many employers pay employees higher rates of pay for overtime.

 

 

ANNUAL LEAVE

Full time employees are entitled to a statutory maximum of 4 working weeks usually 20 days for full time staff. In addition, there are 9 public holidays (10 from 1st January 2023) that employees are entitled to. If an employee works on a public holiday, they are entitled to a day’s pay or additional days leave in lieu. Annual leave and public holidays are calculated on a pro rata for part-time employees. Annual leave should be used in the agreed 12-month annual leave period. However, many employers allow days to be carried over that must then be used within 6 months of the following year.

 

 

TRIAL PERIOD

Standard trial period known as probation period is usually for 6 months but can last anywhere from a few weeks to 11 months. It is recommended that the total length of the probation does not exceed 12 months.

 

 

RESIGNATION AND DISMISSAL IN IRELAND

An employee may unilaterally terminate their employment by providing written notice to their employer. Notice periods do vary. During a probation period this is usually one week for both the employee and employer. This will be stated in the contract of employment. There is no statutory notice period for employees who have worked less than 13 weeks for an employer.

 

Once an employee has worked for an employer for over 12 months continually, they may only have their employment terminated on the grounds of one of the following. Personal e.g. lateness, absenteeism. Competence, qualifications, conduct, redundancy, or other substantial grounds. To mitigate any risk to the employer it is imperative that there is a burden of proof or evidence and required investigation meeting and/or disciplinary hearings have taken place.

 

An employee will still be entitled to either statutory or contractual notice in line with their contract of employment. An exception to this would be certain cases of misconduct and gross misconduct.

 

It is important that a fair process takes place for any dismissal cases. After an employee has been with an employer for a period of 12 months continuous service, they have the right to refer to the Unfair Dismissals Act 1977 which prevents employees from being dismissed without fair cause and process. This would then be referred to the Workplace Relations Commission and, if necessary, the Labour Court to make a claim against the employer.

 

CONTRACT OF EMPLOYMENT WHEN HIRING IN IRELAND

Anyone who works for an employer automatically has a contract of employment. The contract as a whole does not have to be in writing, but the employee must be provided with a written statement of terms of employment. A written statement containing 5 core terms must be provided within 5 days of employment. These are the full names of employer and employee, employer address, expected duration of contract (where the contract is temporary or fixed term), the rate or method of calculating pay and what the employer reasonably expects the normal length of the working day and week to be, in a normal working day and in a normal working week.

A written statement of the remaining terms of employment (contract) will need to be received within 2 months of starting work. This will need to include place of work, job title, date employment started, pay intervals, T&C’s relating to hours of work, paid leave, sick pay, pension, notice periods and details of collective agreements.

 

MATERNITY AND PATERNITY LEAVE IN IRELAND

Expectant mothers in Ireland are entitled to 26 weeks maternity leave, there is also the right to take an additional 16 weeks of unpaid leave. The employee must take at least 2 weeks before the expected due date and at least 4 weeks after the baby is born. Most employees are entitled to Maternity Benefit from the Department of Social Protection (DSP) if Pay Related Social Insurance (PRSI) contributions are enough.

Expectant fathers in Ireland are entitled to take 2 weeks paternity leave. This must be taken in one block within 26 weeks of the birth of the child. While on paternity leave an employee will usually be entitled to paternity pay from the Department of Social Protection, depending on meeting certain PRSI eligibility criteria.

 

 

SICKNESS LEAVE

In general, employers do not pay employees who are absent on sick leave. If an employee cannot work due to sickness or injury, and they have enough PRSI contributions, they can apply to the Department of Social Protection (DSP) for a payment called Illness Benefit. The government has approved a publication of the draft Sick Leave Bill 2022. The scheme will introduce paid sick leave for up to 3 days per year, a rate of payment for statutory sick leave of 70% of normal wages to be paid by employers (up to a maximum €110 per day). To be entitled to paid sick leave under the new scheme, employees must be working for their employer for at least 13 weeks. They will also need to be certified by a GP as unfit to work. Employees Sick Pay entitlement starts as soon as the law is enacted. This is expected soon.



 

SOCIAL SECURITY

The Irish social security system is known as Pay Related Social Insurance (PRSI). Contributions depend on what class the employee falls into, the most common being Class A. Deductions are 4% for employees and 11.05% for employers. Contributions will make an employee eligible for benefits such as Job Seekers, Maternity, Paternity, Illness Benefit.

 

HEALTHCARE AND INSURANCE IN IRELAND

Ireland has a comprehensive, government funded public healthcare system. A person living in Ireland for at least one year is considered by the HSE to be ‘ordinarily resident’ and is entitled to either full eligibility (Category 1) or limited eligibility (Category 2) for health services. Many Irish employees also choose a Private Health Insurance, which offers a more rapid access to treatments and a wider choice in doctors and hospitals.

 

EMPLOYMENT OF FOREIGN NATIONALS IN IRELAND

Most non-EEA nationals must have an employment permit to work in Ireland. Generally, the two most common types of employment permits are detailed below.

 

1.  CRITICAL SKILLS EMPLOYMENT PERMIT

 

An application can be made if a person is offered a job in a profession that is either paid at a rate of at least €32,000 per year and on the critical skills occupation list, or paid at a rate of €64,000 per year and is not on the list of ineligible occupations. The critical skills employment permit is for skilled workers who are qualified in professions where there is a shortage of skills in Ireland. Applicants must have a relevant third level qualification. But for some job types maybe eligible with a lesser qualification or if they have the required experience. Employers must offer a minimum 2 year employment contract.

 

2.  GENERAL EMPLOYMENT PERMIT

A general employment permit is open to applicants that are offered a job that is paid at a rate of €30,000+ per year, not in a profession on the list of ineligible occupations and for a business where more than half of employees are from outside the EEA. This is called the 50:50 rule.

The company or business must be already trading in Ireland and registered with the Companies Register Office and Revenue. The employer must have tried to fill the post with an Irish or EEA citizen. They must show that they have advertised the job with EURES and the Department of Social Protection (DSP) for at least 4 weeks. They must also advertise the job in a national newspaper for at least 3 days, and a local paper, or an online recruitment agency (that is not a DSP or EURES website) for 3 days.

 

SALARY AND SALARY TAXES

MINIMUM WAGE

The minimum wage for aged 20 and over in Ireland is currently €10.50 per hour. Every January this is increased by the Irish Government. The minimum wage for employees ages 19-20 is €9.45 per hour and aged 18-19 is €10

INCOME TAX

The Irish tax year runs from January to December, Employees pay tax through a Pay-As-You-Earn (PAYE) system which is deducted from wages by employers before NET payments is made to employees. Below is a table of tax thresholds for 2022.

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SALARY PAYMENTS

Salaries are typically paid on either a monthly or fortnightly period. Employers should pay employees by the last day of the month.

 


SOCIAL SECURITY CONTRIBUTIONS 

The social security contribution most employees in Ireland make is called Pay Related Social Insurance (PRSI) and is, like the name states, dependent on the income, but also on the type of work an employee is performing. Most employees are insured under Class A category. Employers will pay a 11.05% contribution for employees on a Class A category with earnings over €410 per week and 8.8% for earnings below €410 per week.

 

IRELAND'S SOCIAL CONTRIBUTION RATES

For Class A if an employee earns €352 or less per week before tax is deducted, they will not pay any social insurance. This does not mean that they are not getting a contribution. They are still covered by Class A social insurance. The employer is paying on their behalf.

For earnings over €352 per week a 4% PRSI deduction is made on all earnings.

A PRSI credit was introduced in 2016 which reduces the amount of PRSI payable for employees earning between €352.01 and €424 per week. The credit is tapered and the amount of the credit depends on earnings. The maximum credit is €12. For example, if an employee earns €352.01 per week, they will get the maximum PRSI credit of €12. On these earnings of €352.01, the PRSI charge (calculated at 4% of earnings) would be €14.08. After the €12 credit is deducted, the employee will pay €2.08 of PRSI.

If an employee earns between €352.01 and €424 per week, the maximum credit of €12 is reduced by one-sixth of the amount of weekly earnings over €352.01.

Employees can work out how much PRSI they will pay in four steps. First, calculate one-sixth of earnings over €352.01. Subtract this from the maximum credit of €12 to get the PRSI credit. Then calculate the basic PRSI charge at 4% of your earnings. Finally, deduct the PRSI credit from the PRSI charge. The result is the amount of PRSI payable.

For example, for gross weekly earnings of €377:

Calculate one-sixth of earnings over €352.01. €377- €352.01 = €24.99. Divided by 6 = €4.17. Subtract this from the maximum credit of €12, giving a credit of €7.83.

The basic PRSI charge is 4% of €377 = €15.08.

The employee will pay €7.25 PRSI weekly (€15.08 minus €7.83 PRSI credit).

 

The Emerald Technology team is here to assist. Feel free to contact us.

 

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