Restaurants, cafes and gastropubs have been closing at a rate of one a day, says the Restaurants Association of Ireland, with shuttering businesses including Cork eaterie Nash 19 blaming soaring business costs.
As well as higher energy bills, impending repayments on tax debt warehoused during Covid, and a hike in the VAT rate for the hospitality industry, the sector is attributing costs associated with new employee entitlements – such as sick pay, a rise in the national minimum wage, and pensions for all workers – for causing an existential threat to its viability.
A whole host of employee protections came into effect in 2023 with the passing of the Work Life Balance Act. It introduced paid domestic violence leave, unpaid medical care leave for parents and carers, and it extended breastfeeding breaks for mothers. The new year will see a whole new raft of new worker entitlements, mostly due to transposing European Union directives.
Ever since we joined what was then the EEC half a century ago, Ireland has been “dragged, kicking and screaming” into improving pay and working conditions, especially for women, says Laura Bambrick, head of social policy and employment affairs at the Irish Congress of Trade Unions (Ictu). She cites how the EU brought about equal pay for women and men doing the same work and ended the marriage bar that forced women to give up public service jobs when they got married.
The latest round of employee rights is about “bringing Ireland in line with the rest of the EU”, Bambrick says.
“Ireland only became wealthy relatively recently, so we’re playing catch-up with these new rights. For example, we were one of only three of the 27 EU countries that didn’t require employers to pay sick leave when employees are too sick to work. Employers are no longer able to base business plans on low pay and conditions.”
What are the new benefits employees will be entitled to this year – and what impact will they have on your finances and work-life balance?
Longer paid sick leave
Until January 1, 2023, a private-sector employer was not legally obliged to pay you when you were off work due to illness or injury.
Instead, you either had to wait three days and claim illness benefit from the Department of Social Protection – or simply power through it because you needed to pay your bills.
Statutory sick pay finally came into effect in Ireland in January 2023, when employees became entitled to three days’ paid sick leave from their employer. Since January 1, 2024, you’re entitled to five days’ paid leave. That figure climbs to seven days next year and to 10 days in 2026.
You are entitled to be paid from the first day of absence from work and this year you don’t have to apply for illness benefit until day six of the illness or injury.
Crystel Robbins Rynne, chief operating officer of Lahinch-based HR software provider HRLocker, says: “We’ve always had an issue with presenteeism when someone was sick; you’d go to work with a flu or a cold or Covid and infect an entire office. Hopefully that will stop now that people are getting paid when off sick.”
When on sick leave, your employer must pay you 70pc of your daily earnings, up to a maximum of €110 a day, or €550 for a working week.
Higher unemployment benefit
If you lose your job, you won’t have to immediately rely on Jobseekers’ Benefit, which pays a maximum of just €232 a week.
Instead, you’ll receive 60pc of your previous salary – up to a maximum of €450 – for the first three months of your unemployment, under a new Pay-Related Jobseekers’ Benefit system. The system, due to be introduced in late 2024, will bring Ireland in line with other EU countries.
If you’re still unemployed after three months, you’ll be entitled to 55pc of your prior income for the subsequent three months, though that’s capped at €375 a week. The rate will drop to 50pc of your previous salary – subject to a maximum of €300 a week – if you’re out of work between months seven and nine. These higher rates will only apply to workers who have at least five years’ worth of Pay-Related Social Insurance (PRSI) contributions.
The move was designed to end a “cliff edge” to incomes after redundancies, Social Protection Minister Heather Humphreys said earlier this month, when she was given approval to draft a new bill to overhaul how Jobseekers’ Benefit is paid.
Marian Ryan, consumer tax manager with Taxback, which last week published a survey showing 66pc of taxpayers would support higher unemployment benefit, says: “While it is important that the Government takes an equitable and fair approach with all taxpayers, it must be acknowledged that middle and higher earners who are out of work and dependent on the current unemployment benefit could be more likely to run into financial difficulty, as they may have to meet higher mortgage repayments and other overheads.”
However, measures like this come at a price: PRSI contributions are poised to rise in October and are set to continue rising over the next five years.
Right to request remote or flexible working
The tug of war continues apace between employers seeking to return workers to the office – at least for a few days a week – and employees unwilling to give up their post-Covid remote or hybrid working arrangements.
Research from recruitment consultants Hays Ireland found last week that both arrangements remain extremely popular among employees: 44pc of them work fully from the office while 41pc follow a hybrid model, and only half of employees said they would consider a new job that did not offer hybrid working.
Under the Work Life Balance Act that was passed last year following an EU directive, parents and carers will have the right to request flexible working, such as four-day weeks or flexitime, and employees will be able to request remote working.
However, “just because you have the right to request it, doesn’t mean the company has to agree,” Rynne says. “For instance, if you work for a call centre that’s open nine to five, and you put in a request to start work at five in the morning and finish early, that’s not going to work.”
The provisions in last year’s legislation to provide for the right to request remote or flexible working were postponed until the Workplace Relations Commission (WRC) could finalise a code of practise that sets out practical guidance for employers and employees, including the reasons employers could decline these requests. Bambrick expects the code, which will bring the legislation backing these new rights into effect, to be published by the end of January.
Minimum wage increase
This year began with a boost for low-paid workers, with the national minimum wage increasing by 12pc to €12.70 from €11.30 – the biggest ever jump in the minimum wage.
A year earlier, the minimum wage was raised by 80c.
The minimum wage will steadily increase until it becomes a living wage in 2026. The living wage will be calculated as 60pc of your hourly median wage in any given year and will be a mandatory requirement for all employers.
Longer Parent’s Leave
From August, parental leave will be extended by two weeks, from seven to nine weeks. You’re entitled to this leave if your child is aged two or under, or if you’ve adopted a child.
If you have enough PRSI contributions before your parent’s leave starts, you’ll qualify for Parent’s Benefit of €274. Your employer does not have to pay you while you are on parent’s leave.
Automatic enrolment into a pension
If you’re among the estimated 750,000 private-sector workers who expect to have nothing but a modest state pension to rely on when you retire, you’ll automatically be enrolled in a pension if you’re aged between 23 and 60 and earn at least €20,000 a year.
Initially, you’ll contribute 1.5pc of your salary, with that proportion increasing every three years by 1.5 percentage points until it reaches the 6pc cap by the tenth year. In return, you get free money: your employer will match your contributions and the State will top it up, with an earnings cap of €80,000. For every €3 you put in, your employer will contribute €3 and the State will add €1.
The long-delayed auto-enrolment scheme is due in the second half of 2024 – but the pensions industry is sceptical about the government meeting this deadline. Bambrick “isn’t optimistic” that the first set of pension contributions will be made by year-end.
Rynne says: “Most European countries have an automatic pension and we are way behind on this. I can’t imagine this will be ready in six months’ time. We need infrastructure in place and companies will need a lot of information first.”
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