Budget 2019 is good for businesses, employment sector as Ireland faces uncertain world marketplace
Budget 2019 introduces a number of employment-related changes and its generally positive economic indicators should be encouraging to businesses as Ireland faces challenges surrounding Brexit and economic uncertainty in the European Union.
Employers should work now to ensure that they will be in compliance with the 2019 Budget initiatives, which include income tax changes such as Universal Social Charge, Employers Pay Related Social Insurance (PRSI), extension of the Benefit in Kind rate, social welfare changes and employer Pay As You Earn (PAYE) compliance implementation. Employers will also need to be prepared for the 25-cent hourly minimum wage increase to €9.80 following the recommendation of the Low Pay Commission. The increase is due to take effect in early 2019.
New parental leave to be introduced in November 2019
Employers and employees alike should note that a new parental leave scheme is set to be introduced in November 2019, which will provide two weeks’ leave to every parent of a child in their first year. The Minister for Finance intends to increase this to seven extra weeks in due course.
Parental leave was first introduced in Ireland in 1998 and after subsequent amendment in 2006, it provided for an entitlement for parents (or those acting in loco parentis) of children up to 8 years of age (or up to 16 years if the child has a disability or long-term illness) to 18 working weeks parental leave per child. Employees must have generally completed one year of continuous employment to be able to avail of parental leave. The Parental Leave Acts 1998 and 2006 currently entitle parents to take parental leave in one block of 18 working weeks, or two separate blocks.
An employer also has the discretion to grant the leave in other forms broken down. Employers are also entitled to delay an application of parental leave for a period of six months or more if the leave would have a “substantial adverse effect on the operation of the employer’s business.” Parental leave is unpaid leave, but an employee on parental leave will continue to accrue service and statutory rights.
The Parental Leave (Amendment) Bill 2017, which has yet to be enacted, proposes to increase the leave entitlement by an additional eight weeks, i.e., 26 working weeks, parental leave per parent. Whilst not yet law, employers should take this opportunity to consider preparing for an update in their staff or employee handbook and/or policies and procedures.
Overall, Budget 2019’s range of business-related measures can be interpreted as a positive step for Ireland as our country continues to face the potential effects of Brexit and a challenging world marketplace.
Wendy Doyle is a Partner in Tully Rinckey’s Dublin Employment, Litigation and Intellectual Property and Data Protection practices. She brings extensive experience from practising in large organisations, such as PricewaterhouseCoopers, its associated law firm Landwell Solicitors, William Fry Solicitors and Deloitte.