2023 looks to be a busy year for upcoming employment legislation in Irelamd. Below we take a look at the HR Outlook for 2023.
1) Introduction of mandatory sick pay for employees
- On 20 July 2022, the Sick Leave Act 2022 became law in Ireland. The entitlement to sick pay starts on 1 January 2023, once the law is commenced. From 1 January 2023, workers will have a right to:
- Paid sick leave for up to 3 sick days per year. This will increase to 5 days in 2024, 7 days in 2025 and 10 days in 2026.
- 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).
- Take a complaint to the WRC where they are not provided with a company sick pay scheme.
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.
2) The Payment of Wages (Amendment) (Tips and Gratuities) Act, 2022 – Imminent introduction
This new legislation gives employees legal rights on the payment of tips. The key points of the legislation are:
- Employers can not use tips to make up an employee’s basic wage or make deductions from an employee’s wage in respect of tips and gratuities made to an employee;
- Employers must clearly display their policy on tips and gratuities for customers clarifying how they are distributed; and
- Employers may not use the term ‘service charge’ or similar unless the gratuity goes directly to staff
When does this new legislation come into effect?
- Employers have until the 1st of December 2022 to prepare for this new legislation, on which date the new law comes into effect. 2023 is likely to see cases in the WRC involving employees who believe their employers are not complying with the legislation.
3) Reporting on the Gender Pay Gap?
Employers will choose a ‘snapshot’ date of their employees in June 2022 and will report on the hourly gender pay gap for those employees on the same date in December 2022. The reporting date will be the same in December 2022 as the snapshot date. If an employer chooses a snapshot date of 8 June, the relevant reporting date will be 8 December. This means that employers have six months from the snapshot date to calculate and report their gender pay gap figure.
The information that employers will be required to publish is set out in the Gender Pay Gap Information Act 2021. It includes:
- the mean and median gap in hourly and bonus pay between men and women
- the mean and median gap in hourly pay of part-time male and female employees
- the mean and median gap in hourly pay of temporary male and female workers
- the percentage of men and women who received bonus pay and benefits-in-kind
- the proportions of male and female employees in the lower, lower-middle, upper-middle, and upper quartile pay bands.
Do all organisations have to partake?
The upcoming pay gap requirements will initially apply to organisations with 250 or more employees but will extend overtime to organisations with 50 or more employees. It will apply to the public and private sectors.
4) Preparation for Auto-Enrolment Pension scheme in Ireland
The Auto-Enrolment Pension scheme will take effect in Ireland from January 2024. Employers will have all of 2023 to prepare for this new legislative requirement.
Ireland is reportedly the only OECD country that does not yet operate auto-enrolment or a similar system to promote pension savings.
Auto-enrolment aims to increase the number of employees in Ireland with access to pension coverage and to address the pensions gap. The Irish Government supports this scheme to bridge the pension gap as the gap will continue to grow due to the lack of sustainability with the current State pension as a result of increasing life expectancy and an ageing population.
What does the Auto-Enrolment Pension Scheme entail?
The automatic enrolment would see employers introduce a workplace pension scheme and automatically enrol their employees into the scheme. Employers would then be obliged to contribute a percentage of an employee’s salary to help fund their retirement.
Under the scheme, employees will be required to make certain minimum contributions to a pension scheme and employers will be obliged to match those contributions, which will then be topped up by the State. Employer and employee contributions will start at 1.5% in 2024 and will increase by 1.5% every three years until they eventually reach 6% by 2034. In other words, for every €3 contributed by the employee, a further €4 will be invested by the employer and the State combined. The auto-enrolment system will be introduced on a phased basis. Once the scheme is fully established, it is anticipated that an employee with an annual salary of €35,000 will accumulate savings of €293,000 over their working life, excluding investment returns.
What employees will be involved in the Scheme?
It is estimated that 750,000 employees in Ireland currently have no private pension at all. All employees not already in an occupational pension scheme, aged between 23 and 60 and earning over €20,000 across all of their employments, will be automatically enrolled in the scheme from January 2024 onwards.