The 2016 Irish Budget’s increase in the national minimum wage is bad news for employers in Ireland.

The Dublin Government’s move to increase the national minimum wage by 50 cent next year will have serious implications for employers, according to HR Team employment law specialist Martina Cullen.

NEW MINIMUM WAGE IN IRELAND

She said: “A 6% increase in the statutory minimum wage from €8.65 to €9.15per hour is concerning for employers and will have a negative impact on many Irish businesses.

“The change which will take effect on January 1 next year will increase overall employment costs in firms with lower paid workers. The move may force employers to shorten the working hours of employees, particularly in sectors such as retail and hospitality.

“The increase will also be particularly difficult for small businesses which have no potential to pass on such cost increases,” Ms McAuley added.

She said changes to employer PRSI – although welcome – would be overshadowed by the amendment of the minimum wage. “The Budget’s reduction in employer PRSI costs does not go far enough to offset the hike in the minimum wage and as a result some small businesses will have no option but to reduce the working hours of employees, shed staff or shelve recruitment.”

NEW PATERNITY LEAVE MEASURES

Another implication of this week’s Budget for employers is the introduction of new paternity leave measures.

“Statutory paternity leave of two weeks is to be introduced together with a new paternity benefit in respect of births from September 2016. Employers will need to ensure they make the necessary arrangements to meet these requirements,” Ms McAuley added.

Further information for employers on how to handle the minimum wage increase, new paternity measures and other employment law and employee performance solutions is available from HR Team at info@hrteam-ni.com.