First published on Thursday, September 12, 2024
Last updated on Thursday, September 12, 2024
As we approach Budget 2025, it’s more important than ever for business owners to stay aware of the numerous legislative changes introduced over the past year, including their impact on business operations.
Budget 2024 introduced significant reforms aimed at improving employee working conditions, but they’ve also come with significant challenges for small-medium enterprises (SMEs).
In this blog you’ll learn what changes have been introduced so far, and which ones are yet to come in Budget 2025. Plus, useful strategies to meet the demands of new legislation effectively.
Key changes from Budget 2024
While the changes have been beneficial for employees, according to the Employment and Recruitment Federation (ERF), they have posed some challenges for employers, particularly SMEs. Here’s what changed in 2024:
- Wage increase: From January 1, 2024, the National Minimum Wage (NMW) increased from €11.30 to €12.70 per hour
- Domestic Violence Leave: Since November 2023, employees that are victims of domestic violence are entitled to take 5 days of paid leave annually
- Parent’s Leave: As of August 1, 2024, parent’s leave and benefits were extended from 7 to 9 weeks for parents with children under 2 years old or recently adopted children
- Sick pay increase: Since January 1, 2024, the right to Statutory Sick Pay (SSP) increased from 3 to 5 days per year
- Work-Life Balance and Miscellaneous Provisions Act 2023: Employees may now request flexible working once certain conditions are met
While these changes have had a noticeable impact on business owners and employees, there are more changes on the way, both as a part of existing legislation, and new.
Further changes expected in Budget 2025
To reduce the impact on employers, the Government has "staggered" some legislative changes, instead opting to introduce them in phases. Other changes have been announced well in advance. Here’s the upcoming legislation we know about so far:
- Auto-enrolment pension schemes: Starting January 2025, the auto-enrolment pension scheme will require contributions from both employers and employees. Initially set at 1.5% of gross earnings, contributions will increase every 3 years until reaching 6%
- Pay Related Social Insurance (PRSI) rate changes: From October 2024, PRSI rates are set to increase. Employers will pay 8.9% on employees’ wages up to €496. Overall PRSI rates will increase over 2024 to 2028
- National Minimum Wage increase: By 2026, the living wage is expected to replace the national minimum wage at a rate of €15 per hour, or 60% of the projected median wage
- Statutory Sick Pay (SSP): The Statutory Sick Pay entitlement will further increase to 7 days in 2025 and 10 days in 2026
More announcements are expected, but for the time being, Finance Minister Jack Chambers has remained vague. He has alluded to “tax breaks for families, workers, and businesses”, saying only that the 2025 budget would be similar to the last.
This is a challenge in of itself for business owners. Fortunately, there are tools you can use to plan ahead for the upcoming budget and manage the previous changes more effectively.
What are the challenges for business owners?
The rise in National Minimum Wage (NMW), with further changes expected, has increased payroll costs for business owners. While this might seem a bit obvious, many business owners may not realise the administrative costs associated with wage increases on such a large scale. Not to mention the risks involved with getting wages wrong, as failure to pay the national minimum wage is a criminal offence and can incur fines of up to, if not over, €2,500.
The increase in Statutory Sick Pay from 3 to 5 days, (with more increases planned), can add significant financial and operational burdens on SMEs. Misunderstanding the rules on sick pay opens businesses up to complaints made by employees through the Workplace Relations Commission (WRC).
The introduction of 5 days of paid leave for staff affected by domestic violence offers vital support for victims, but much like the other changes, there are still important considerations for employers. For more support on this topic, ask our instant advice tool Brainbox: How can an employee apply for domestic violence leave?'
The extension of Parent’s Leave can mean increased challenges in understanding employee entitlement and the rules around how it can be taken. Having an effective process for handling these requests is advisable.
The new remote working legislation can be difficult for employers to navigate. Business might want to consider using compliant document templates, or seeking out confidential expert advice to help navigate these requests confidently. Whether you offer remote working or otherwise, you’ll need to demonstrate that you have considered each request carefully through the proper channels and framework set out in the Code of Practice.
Navigate a wave of legal changes with expert advice from BrightHR!
Managing the legal changes from the 2024 Budget and those expected in the upcoming 2025 Budget has and will continue to represent big challenges for Irish business owners.
BrightHR’s 24/7 employment law advice and document library can help business owners tackle changing employment law with confidence. Need support on a specific employee issue? Call our team today on 1800 279 841.
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