WHAT TO KEEP AN EYE OUT FOR…
Government will outlaw Zero Hour Contracts in new Legislation
The Taoiseach has recently announced that upcoming proposed legislation to outlaw zero-hour contracts will be prioritised in the current Dáil term.
This announcement follows the previous publication of the 2015 University of Limerick (UL) investigation into zero-hour contracts and variable-hours contracts. UL made a number of recommendations including that individuals should be paid time and a half if they did not receive at least 72 hours’ notice of working hours and should also be paid the normal rate where hours were cancelled at short notice.
The Taoiseach stated the government’s economic policy was focused on more than the goal of 100% employment - insisting it was focused on employment quality with “well-paying jobs, good conditions, and pension entitlements.”
Budget 2018 – HR Implications
There are a number of areas where Budget 2018 will affect HR practice and budgeting.
The biggest payroll impact will be the increase in the National Minimum Wage form 1st January 2018.
Below is an update on the main HR implications:
Wages and National Minimum Wage
Following the recommendation by the Low Pay Commission, the National Minimum Wage will increase from €9.25 per hour to €9.55 per hour with effect from 1st January 2018.
Income tax band changes
The standard 20% income tax band is to increase by €750. For single individuals the standard rate band will increase from €33,800 to €34,550 and from €42,800 to €43,550 for married one-earner couples.
USC rates and bands changes
The USC entry point remains at €13,000
€0 - €12,012 – 0.5% (No change)
€12,013 - €19,372 – band increased by €600 and rate reduced from 2.5% to 2%
€19,373 - €70,044 – band decreased by €600 and rate reduced from 5% to 4.75%
€70,045 - €100,000 – 8% (No change)
PAYE income in excess of €100,000 – 8% (No change)
Self-employed income in excess of €100,000 – 11% (No change)
Increase in Employer contribution to National Training Fund levy
Employer PRSI contribution rates under Class A and Class H will increase by 0.7% to 0.8% to fund increases in the National Training Fund levy. Further 0.1% increases will also take effect in 2019 and 2020.
Employer PAYE Compliance Project
The Minister has announced the introduction of an employer PAYE compliance project in advance of the introduction of PAYE modernisation on 1st January 2019. The project is being introduced to ensure that Employers are complying with current PAYE requirements and it will involve a range of compliance interventions. Funding of €50 million has been set aside for this project in 2018. These resources will include enhancing ICT capacity for data matching, analytics and capability building.
Employment supports
A new Youth Employment Support Scheme to help young long-term jobseekers back to work will be introduced in 2018 and the JobsPlus scheme will be enhanced so that employers will receive a subsidy of €10,000 to employ any long-term unemployed person aged over 50. The Back to Work Family Dividend and Working Family Payment will continue with only minor improvements.
Conclusion
Overall there is nothing that will have a significant effect on the current challenge of attracting and retaining key talent.
Government to introduce Auto-Enrolment Pension Scheme for all Workers
The Taoiseach announced that all workers will be auto-enrolled into a pension scheme in just over three years’ time.
In Ireland some two-thirds of private sector workers have no pension with the Taoiseach warning that the time bomb must be addressed. It is anticipated that the first payments will be made in 2021.
The government is set to publish a five year road-map for pension reform before the end of the year with auto enrolment being the centrepiece of the national pension plan.
The Taoiseach has recently announced that upcoming proposed legislation to outlaw zero-hour contracts will be prioritised in the current Dáil term.
This announcement follows the previous publication of the 2015 University of Limerick (UL) investigation into zero-hour contracts and variable-hours contracts. UL made a number of recommendations including that individuals should be paid time and a half if they did not receive at least 72 hours’ notice of working hours and should also be paid the normal rate where hours were cancelled at short notice.
The Taoiseach stated the government’s economic policy was focused on more than the goal of 100% employment - insisting it was focused on employment quality with “well-paying jobs, good conditions, and pension entitlements.”
Budget 2018 – HR Implications
There are a number of areas where Budget 2018 will affect HR practice and budgeting.
The biggest payroll impact will be the increase in the National Minimum Wage form 1st January 2018.
Below is an update on the main HR implications:
Wages and National Minimum Wage
Following the recommendation by the Low Pay Commission, the National Minimum Wage will increase from €9.25 per hour to €9.55 per hour with effect from 1st January 2018.
Income tax band changes
The standard 20% income tax band is to increase by €750. For single individuals the standard rate band will increase from €33,800 to €34,550 and from €42,800 to €43,550 for married one-earner couples.
USC rates and bands changes
The USC entry point remains at €13,000
€0 - €12,012 – 0.5% (No change)
€12,013 - €19,372 – band increased by €600 and rate reduced from 2.5% to 2%
€19,373 - €70,044 – band decreased by €600 and rate reduced from 5% to 4.75%
€70,045 - €100,000 – 8% (No change)
PAYE income in excess of €100,000 – 8% (No change)
Self-employed income in excess of €100,000 – 11% (No change)
Increase in Employer contribution to National Training Fund levy
Employer PRSI contribution rates under Class A and Class H will increase by 0.7% to 0.8% to fund increases in the National Training Fund levy. Further 0.1% increases will also take effect in 2019 and 2020.
Employer PAYE Compliance Project
The Minister has announced the introduction of an employer PAYE compliance project in advance of the introduction of PAYE modernisation on 1st January 2019. The project is being introduced to ensure that Employers are complying with current PAYE requirements and it will involve a range of compliance interventions. Funding of €50 million has been set aside for this project in 2018. These resources will include enhancing ICT capacity for data matching, analytics and capability building.
Employment supports
A new Youth Employment Support Scheme to help young long-term jobseekers back to work will be introduced in 2018 and the JobsPlus scheme will be enhanced so that employers will receive a subsidy of €10,000 to employ any long-term unemployed person aged over 50. The Back to Work Family Dividend and Working Family Payment will continue with only minor improvements.
Conclusion
Overall there is nothing that will have a significant effect on the current challenge of attracting and retaining key talent.
Government to introduce Auto-Enrolment Pension Scheme for all Workers
The Taoiseach announced that all workers will be auto-enrolled into a pension scheme in just over three years’ time.
In Ireland some two-thirds of private sector workers have no pension with the Taoiseach warning that the time bomb must be addressed. It is anticipated that the first payments will be made in 2021.
The government is set to publish a five year road-map for pension reform before the end of the year with auto enrolment being the centrepiece of the national pension plan.
