Pay-related issues to look out for in 2021

Gemma O'Connor

January 19 2021

We recently took a look at some of the key employment law issues that will impact business in 2021. Here, we focus in on pay-related issues to monitor.

Minimum wage increase

The national minimum wage hourly rate of pay in Ireland increased from €10.10 to €10.20 per hour on January 1st. The new rates are set out below:

Employee

Rate of pay

% of minimum wage

Adult (aged 20 or over)

€10.20 per hour

100%

Aged under 18

€7.14 per hour

70%

Aged 18

€8.16 per hour

80%

Aged 19

€9.18 per hour

90%

With businesses under so much strain over the past year, employers may be able to seek a one-off exemption from paying the minimum wage from the Labour Court. This exemption can last between three months and one year.  

You must have the support of the majority of your employees to succeed with this type of application. If the alternative is losing their job, employees may be willing to support such a move. 

Employment Wage Subsidy Scheme

The Employment Wage Subsidy Scheme (EWSS) replaced the Temporary Wage Subsidy Scheme last September.

If your turnover is down by 30% or more against previous years, you may be entitled to the financial support available under EWSS.

The subsidy is paid at a weekly flat rate based on the number of qualifying employees on payroll.

The Government recently confirmed that the following rates will remain in place until March 31st.

Gross pay per week

Subsidy rate

Less than €151.50

No subsidy applies

€151.50 – €202.99

€203

€203 - €299.99

€250

€300 - €399.99

€300

€400 - €1,462

€350

More than €1,462

No subsidy applies

The EWSS is also scheduled to cease on March 31st, 2021. When this this financial support is removed, some businesses may have no option but to look at making redundancies.

Statutory sick pay (SSP) legislation

The Department of Enterprise, Trade and Employment recently conducted a public consultation to gather feedback on the introduction of a statutory right to paid sick leave.

Ireland is one of only a small number of European states that places no legal obligation on employers to provide sick pay. As the law stands, the payment of salary during a leave of absence due to illness is at the discretion of the employer.

The introduction of statutory sick pay would place a legal obligation on employers to pay an employee who is unable to work because of illness. With business owners already under severe financial pressure during the pandemic, there’s likely to be resistance to the introduction of more employer-side costs.

The majority of EU Member States provide a double payment arrangement. The employer typically pays for an initial period of absence (in full or in part) before the state comes in to support employees who are long-term absentees.

The consultation process concluded in mid-December and we expect to see a further statement on the issue soon.

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