By Globalization PartnersFebruary 2021
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Ireland’s impressive workforce and steady increase in GDP has made it an attractive destination for companies looking to expand globally. If you’re interested in hiring new employees in Ireland, there are some important considerations you must work through first. As with any country, Ireland has its own laws that govern hiring and employment practices.
Our guide to hiring employees in Ireland will cover some of the key aspects of these laws and other considerations you need to know before you start hiring.
What to Know Before Hiring in Ireland
Let’s look at some of the most important aspects of hiring in Ireland that international employers must know.
1. The Irish Labor Force
One of the main draws Ireland has for international companies is its labor force. Ireland’s labor market is characterized by high levels of education, with 47 percent of adults aged 25-64 having earned a tertiary education qualification. Ireland also has the youngest population in the European Union, and younger age groups have even higher education rates than the percentage for all adults.
Some prominent industries in Ireland include financial services, agriculture, export, trade, and technology. Some areas of focus in the technology sector include pharmaceutical and medical technology, information and communications technology, and software. Even if your company does not belong to one of these industries, you have a strong chance of finding qualified workers to join your team in Ireland.
Ireland has two official languages: Irish Gaelic and English. Though Irish Gaelic is Ireland’s first official language, a minority of the population speaks it. Even those who speak Irish Gaelic typically use English in most settings — about 97 percent of the Irish population speaks English. Since English is the predominant language, companies that are used to operating in English will enjoy convenient communication with their Irish employees.
If you have more flexibility linguistically or are looking for employees who are fluent in a language besides English, note that Ireland has become an increasingly diverse nation —17.3 percent of all Irish residents were born in other countries. That has brought some linguistic diversity to the country. According to the 2016 census, 612,018 Irish residents speak a foreign language at home, and some of the most common languages are Polish, French, Romanian, and Lithuanian.
3. SEOs and Contracts
In many countries, you must contend with both national employment laws and collective bargaining agreements (CBAs) from trade unions. In Ireland, there is no legal requirement to negotiate terms with trade unions. However, some employers will have to refer to sectoral employment orders (SEOs). These are sets of employment terms that apply to specific sectors. Currently, the sectors under an SEO include construction, mechanical engineering building services contracting, and electrical contracting.
Regardless of the requirements you are working within, all employees should know the terms of their employment. This is why employers must provide their employees with a written statement covering five core terms of their employment. While this statement is not a contract per se, most employers create a detailed written contract to fulfill this obligation. Learn more about the five mandatory items you must address in our guide’s employee onboarding section.
4. Working Hours and Time Off
Ireland limits the workweek for most employees to an average of 48 hours. The period used to calculate that average depends on the industry. In most cases, it is a period of four weeks. Most workers do not approach that limit since the average workweek in Ireland is 39.7 hours.
Irish employees are also legally entitled to paid time off. Employees are entitled to one of the following entitlements for each leave year, whichever one results in the most time off:
- Four working weeks if the employee has worked at least 1,365 hours
- One-third of a working week every month the employee worked at least 117 hours
- Eight percent of the hours worked, up to a maximum of four weeks
In addition to paid annual leave, Irish employees also enjoy time off for nine public holidays. Employers do not necessarily have to give their employees every holiday off, but if they don’t, they must designate another day for employees to take off, award an additional day of annual leave or pay their employees an extra day’s wages.
5. Compensation and Benefits
Ireland has a national minimum wage that applies to everyone, including both full-time and part-time workers. This minimum wage is a bit lower for employees 19 years of age and younger. The full minimum wage that applies to experienced adult workers is currently set at €10.20. Note that occupations governed by SEOs may have their own minimum wage, as dictated by the SEO.
Employers must provide their Irish employees with access to a standard personal retirement savings account (PRSA) or a pension scheme. Many employers also offer their employees a private health insurance policy. Ireland has a public health system, but long waitlists drive many people to purchase private health insurance or expect it from their employer.
6. Taxes and PRSI
Irish employees pay income tax at a standard rate, currently set at 20 percent. Above a certain threshold, additional earnings are taxed at 40 percent. Ireland uses a Pay As You Earn (PAYE) model, so employers are responsible for withholding employees’ income tax from their paychecks.
Employees and employers must also make pay-related social insurance (PRSI) contributions. The contribution amounts depend on an employee’s social insurance class and pay. Most employees belong to Class A. In this case, employers contribute 8.8 percent of an employee’s salary if the employees make less than €398 per week or 11.05 percent if they make more than that amount.
Employees who make more than €352 per week contribute 4 percent of their wages to PRSI. If an employee makes between €352.01 and €424 per week, they will receive credits that reduce the amount of PRSI they must pay.
The Cost of Hiring an Employee in Ireland
You should approach the hiring process carefully and do your best to hold onto quality employees. This is because the hiring process can be costly, no matter what country you’re hiring in. When you’re hiring internationally, you may have to factor in additional costs other than the ones you’re used to. Some recruitment expenses you’re probably already used to include:
- Paying a hiring agency or an internal hiring committee
- Purchasing or subscribing to applicant tracking software
- Paying to post job ads
- Conducting background checks or paying a third-party service
You may also host hiring events that involve an expense. In addition to these costs, you may also have to factor in:
- The cost to establish a business entity in Ireland
- Consulting costs for lawyers to help you follow Irish employment laws
- Traveling expenses to set up your company or conduct interviews in Ireland
What Does a Company Need to Hire Employees in Ireland?
If you don’t have a business entity in Ireland, then you cannot start hiring there. You must first establish yourself as an employer within the country. You can choose from several business structures. Some companies establish a branch that is closely tied to their headquarters. A subsidiary, however, offers more freedom to conduct business independently in Ireland. Many international companies choose a limited liability company (LLC) as the structure for their subsidiary. To set up an LLC in Ireland, you need:
- The Commissioner for Oaths to witness the swearing-in of your founder.
- To submit necessary documents to the Companies Registration Office.
- To obtain a company seal.
- To register with the Revenue Commissioners for corporation tax, social insurance, and value-added tax (VAT).
- To register for PAYE in preparation for establishing employees’ payroll.
Technically, it takes 11 days to start a company in Ireland, but in reality, it can take longer for international companies that are navigating unfamiliar laws and carefully planning their expansion. Some companies choose to forego or at least delay setting up their own subsidiary by partnering with an employer of record (EOR).
With an EOR in Ireland, you don’t have to set up a local entity and you can hand over the burdens associated with adhering to Irish employment and tax laws. You still choose your employees, and those employees will still work for your company, but they will be on the EOR’s payroll. In short, this solution allows you to outsource all the HR logistics that could otherwise consume your company’s time and attention and put you at risk of noncompliance.
The Steps to Hiring in Ireland
Hiring practices in Ireland may differ from those you’re used to in your home country. Let’s look at the basic sequence of steps for how to hire in Ireland, along with our tips for following the local laws and customs throughout the process.
1. Create Job Descriptions and Advertise Job Openings
In your job ads, be careful to avoid language that may violate Ireland’s anti-discrimination laws.
You can post ads on various job boards online. Major job aggregators like Glassdoor, Monster, and Indeed are popular in Ireland. You may also want to look for Irish job boards specific to your industry. Some job sites offer free posting options, but in many cases, you can expect to pay for your job ads. LinkedIn is also popular among the Irish working population, so social networking can also be an effective way to advertise jobs in Ireland.
2. Screen Applicants
In addition to the standard application documents, consider building screening tools into the application process. A survey of graduate recruiters in Ireland found that 42 percent used ability or technical tests and 39 percent used psychometric tests online to help screen applicants.
Irish job seekers will be used to submitting a curriculum vitae (CV), which resembles a North American resume. Unlike some other European CVs, which can be quite detailed, Irish CVs tend to be capped at two pages and likely won’t include a photo or personal details about the applicant.
3. Conduct Interviews
Video calls have become a common part of Irish hiring practices, so if you’re hiring remote employees in Ireland, this is a great interview option that saves you from having to travel to the country. You can also conduct interviews via a phone call. With virtual interviews, just be sure to check for a possible time difference and choose a time that accommodates both interviewers and interviewees.
If you’re setting up an office in Ireland, in-person interviews may be more convenient. Ask interviewees to bring a document with them to demonstrate their right to work in Ireland. For example, this could be a residence permit, passport, birth certificate, Immigration Status Document, or certificate of registration or naturalization. A person’s permission to work in Ireland is important to confirm at some point during the hiring process so you can avoid possible criminal and civil penalties.
4. Send Job Offer Letters
Send your selected job candidates offer letters that include the primary terms and conditions of employment. If you have yet to conduct background checks, be sure to request consent and state that the job offer is contingent on the background check findings. When hiring someone in Ireland, your pre-employment screening will likely focus on confirming references since there is no mechanism or allowance for conducting criminal background checks there. The exception is jobs that require a clearance from the National Garda Vetting Unit (NGVU).
When you send offer letters, ask the prospective employees to accept or decline the offer in writing. There may be negotiations over salary or other terms that occur before a candidate officially accepts the offer.
5. Onboard New Employees
The offer letter you send should include a required written statement. If not, be sure to provide this statement to employees within five days of their start date with your company. At the least, the statement must include:
- The employer’s and employee’s names
- The employer’s address
- Duration or end date in the case of temporary or fixed-term contracts
- The method of calculating pay and the pay reference period
- Expectations for working hours, on a daily and weekly basis
Create a personnel file for all new employees to keep employment records. Keep in mind that this personal information is covered by the Data Protection Acts, so you must follow certain guidelines on how to handle it. You must also request a Revenue Payroll Notification (RPN) to help you establish payroll. Other onboarding processes include any internal paperwork or training you need to introduce employees to your company and their new job position.
Hire Irish Employees With Globalization Partners as Your EOR
Our key points of information and tips for hiring in Ireland can help you get started. However, learning and adhering to Irish law, establishing your subsidiary, and handling HR tasks for your new Irish employees can be time-consuming and stressful — and put you at risk for potential noncompliance.
If you want to start hiring right away and avoid as much expansion complexity as possible, consider working with Globalization Partners. We can serve as your EOR in Ireland. We’ll onboard your new employees and handle payroll, benefits, taxes, and other HR logistics. All that’s left for you to do is enjoy a positive relationship with your Irish employees and focus on making your expansion into the Irish market a success. Learn more about our EOR solution in Ireland to get started.