by Ángel Bello Cortés, Partner, Fragomen LLP, Dublin office
The much-anticipated Employment Permits Act 2024 and accompanying Regulations commenced on 2 September. The new framework consolidates all previous Employment Permit legislation and provides the Minister for Enterprise, Trade an Employment with enhanced executive powers to introduce and amend elements of the system by way of Regulations to swiftly respond to changes to labour market needs.
In addition to the broader scope for executive intervention, the Act’s key features include a new “change of employer” process, a streamlined Labour Market Needs test rules, a new Seasonal Employment Permit and additional compliance obligations.
As all these new elements have been widely reported on, rather than analyse them in further detail, the purpose of this piece is to encourage timely interaction with Ireland’s business community to ensure success of the new framework.
The Pressing Issue: Minimum Salary Thresholds for Employment Permits
It is evident that the new system has the potential to enhance Ireland’s ability to address skills shortages and strengthen its position as an FDI destination, especially when the promised and anticipated “single procedure” (which will combine Employment Permits, residence cards and, hopefully, entry visas) is implemented in the coming years.
However, the pressing question at this moment is not when that single procedure will be realised, as we know it will take some time and require very significant inter-Departmental collaboration. Instead, there is an important and more immediate consideration that has not been fully addressed in discussions about the new framework: the minimum salary thresholds for Employment Permits.
On 20 December 2023, the then Ministers announced that minimum remuneration thresholds for employment permits would increase starting on 17 January 2024. Some of these increases were quite substantial. While salaries clearly need to rise in line with the cost of living—especially since these thresholds had not been updated in quite some time—this sudden change, with no advance warning, left businesses with little time to prepare and budget accordingly. Many HR departments faced fairly significant challenges upon returning from the holiday break.
When triggering these changes in January 2024, the Department also indicated plans for further increases in January 2025. These proposed increases, referred to as “indicative” and not yet formalised in legislation, could range from 30% to 37% compared to the pre-January 2024 thresholds. Again, while it is important for salaries to reflect the high cost of living in Ireland, such significant increases over a short period could pose considerable challenges for many businesses.
Under the new 2024 Employment Permits legal framework, the Department is now required to review the remuneration thresholds for Employment Permits each year, taking into account the average weekly wage published by the CSO. If the average weekly wage has increased since the last minimum annual remuneration (MAR) was established, the Minister is obligated to raise the MARs accordingly. Notably, there is no apparent provision for reducing the MARs if wages decline.
Making or Breaking the System: Timely Communication and Advance Warning
Whether the Department increases salary thresholds in January 2025 based on indicative figures published in January 2024, or on the basis of recent CSO data, is not the most consequential piece of the puzzle. As budget season is now upon us, what is critical is that the business community, Employment Permit holders and future applicants have urgent confirmation as to whether there will be further increases in January 2025 at all and, if so, to what extent, so that they can plan accordingly.
If the intention is still for higher remuneration thresholds to take effect in January 2025, the Department should formally confirm these increases this month, whether through Regulations or another method. In any event, serious consideration should be given to a more gradual approach, as opposed to further significant increases next January. A more gradual approach would give employers time to stabilise costs, especially since some industries are still working to meet the January 2024 increases.
Ireland has a long history of timely communication and consultation with the business community when it comes to the Employment Permits system, which is reflected on the regular consultations on the occupations lists.
In order to retain the country’s attractiveness as a FDI destination and our ability to address our skills shortages, it is paramount that this long-standing tradition of consultation and advance warning continues
About the author
Ángel Bello Cortés is a Partner in the Fragomen LLP Dublin office and oversees a large team of immigration professionals which assists a diverse client base comprised of multinational corporations, local and global SMEs, start-ups and private clients.
Ángel has 20 years of professional experience in Irish immigration and citizenship matters. He is admitted as a Solicitor in Ireland and uses his deep understanding of the Irish immigration system to provide strategic advice to companies in the establishment, maintenance and enhancement of their Irish operations from an immigration perspective. This has included crisis management and planning during Brexit, COVID-19 and the Ukraine crisis. He has also provided advice to international organizations and State bodies.
Ángel and his team help clients solve both routine and complex, broader challenges. Ángel and his team pride themselves on being able to serve as an extension of the clients’ in-house global mobility, immigration and HR teams.
