What’s Ahead for Irish Employment Law in 2025?
2024 was a year of significant change for Irish employment law, with key developments in mandatory retirement, employment status, and non-disclosure agreements (NDAs). As we move into 2025, more reforms and legal updates are set to shape the workplace landscape. Employers should be prepared for these changes to ensure compliance and stay ahead of evolving regulations. Here’s what to expect in the year ahead:
Stricter Regulations on NDAs
The Maternity Protection, Employment Equality and Preservation of Certain Records Act 2024 introduced substantial restrictions on the use of NDAs in cases involving discrimination, harassment, sexual harassment, or victimisation. As this legislation was enacted late last year, 2025 will reveal its full impact. Employers will need to navigate these new limits carefully when drafting agreements with employees, ensuring compliance with the law while protecting their interests.
In addition, this Act introduced a change to maternity leave, allowing employees with serious health conditions to defer all or part of their maternity leave for up to 52 weeks, provided they submit medical certification and give at least two weeks’ notice.
Auto-Enrolment for Workplace Pensions
After decades of delays, auto-enrolment for pensions is finally arriving in Ireland. The “My Future Fund” pension system is set to launch on 30 September 2025, automatically enrolling eligible employees into a new pension scheme. Contributions will come from the employer, the employee, and the government, with employees having the option to opt out after six months. A newly established public body, the National Automatic Enrolment Retirement Savings Authority, will oversee this initiative. Employers should prepare for the rollout by reviewing their pension offerings and ensuring compliance with enrolment requirements.
Employment Status Under Scrutiny
Employment classification remains a hot topic, following the Supreme Court’s landmark ruling in Revenue Commissioners v Karshan Midlands Ltd t/a Domino’s Pizza and the subsequent adoption of the five-factor employment status test. The Workplace Relations Commission (WRC) and High Court have already begun applying this test in cases throughout 2024, and we can expect further case law developments in 2025. Employers should take proactive steps to review employment contracts and classifications to avoid misclassification disputes.
Gender Pay Gap Reporting Expansion & Pay Transparency
Ireland’s gender pay gap reporting obligations will extend further in 2025. The reporting threshold is dropping from 150 employees to 50 employees, meaning more businesses must now provide detailed gender pay gap disclosures.
Additionally, Ireland is preparing to implement the EU Pay Transparency Directive, which requires full compliance by 7 June 2026. This directive will introduce stricter pay transparency measures, including:
- Pay gap reporting by categories of workers
- Additional transparency requirements for salary structures
- New employee rights regarding pay information
With possible changes to reporting deadlines and enhanced employer obligations, businesses should begin preparations now to ensure compliance.
AI Act Compliance for Employers
The first provisions of the EU AI Act take effect on 2 February 2025, introducing regulations for AI use in the workplace, particularly in recruitment, performance evaluation, and promotions. Employers deploying AI systems must ensure compliance with these regulations, including providing transparency about AI’s role in decision-making processes.
Non-compliance could result in significant fines—up to €35 million or 7% of global turnover. Employers should assess their use of AI, implement necessary safeguards, and seek legal guidance to avoid penalties.
Employment Permit Changes
The Employment Permits Act 2024 introduced the Seasonal Employment Permit, which will become available in 2025. This permit allows non-EEA nationals to work in horticulture, agriculture, and other seasonal sectors for up to seven months per year, with a pilot scheme launching soon.
Additionally, minimum salary thresholds for work permits are set to increase:
- Critical Skills Employment Permit: Increasing from €38,000 to €44,000
- General Employment Permit: Increasing from €34,000 to €39,000
Employers hiring international talent should stay updated on these changes and adjust their hiring plans accordingly.
Sick Pay & Minimum Wage Increases
As part of Ireland’s phased sick pay scheme, statutory sick pay entitlements increased from 5 days to 7 days per year as of 1 January 2025. Employers must ensure payroll systems reflect this update.
Furthermore, the national minimum wage has risen to €13.50 per hour from 1 January 2025. Employers should review employee wages to ensure compliance with the new rate.
Preparing for the Year Ahead
With multiple legal and regulatory changes on the horizon, 2025 is set to be another pivotal year for employment law in Ireland. Employers should take a proactive approach by:
- Reviewing NDAs and employee agreements to ensure compliance
- Preparing for auto-enrolment pension contributions
- Assessing employment classifications under the Karshan test
- Addressing gender pay gap reporting and pay transparency
- Ensuring AI system compliance in workplace decision-making
- Planning for employment permit and salary threshold updates
- Updating payroll systems to reflect statutory sick pay and minimum wage increases
By staying ahead of these changes, businesses can navigate 2025 with confidence, ensuring compliance while fostering a fair and transparent workplace.
