Employment Law Changes in 2025 with Voltedge Management

As we look ahead to 2025, several significant employment law changes are set to come into effect in Ireland. These updates will impact businesses of all sizes, introducing new obligations and opportunities to support employees while ensuring compliance with evolving regulations.

Auto-Enrolment Scheme

The government has confirmed that the new Auto-Enrolment Retirement Savings Scheme (called My Future Fund) will start from 30 September, 2025. Under the scheme, employees will be automatically enrolled in the new pension scheme if they are an employee:

• Aged between 23 and 60
• Not currently part of a pension plan
• Earning more than €20,000 per annum

During the first year, employees and employer will both contribute 1.5% of annual salary and the government will contribute €1 for every €3 contributed by the participant. Auto enrolment contributions will be phased in over 10 years with both employer and employee contributions increasing to a maximum of 6% by year 10.

EU AI Act

The obligations of the new EU AI Act will start to come into effect during 2025.

What are the next steps for businesses?

1. Identify: organisations need to identify what if any AI systems they have in use across the organisation.
2. Systems and procedures: organisations should establish procedures for the approval and use of AI systems within the organisation, taking into account the AI Act obligations.
3. Educate: from February 2025 organisations are obliged to ensure employees are sufficiently trained on the use of AI systems.
4. Categorise: once the various AI systems are identified they should be reviewed and categorised against the AI Act risk classifications. The Act categorises AI systems into three risk levels: unacceptable, high, and low. Unacceptable risk AI applications are banned outright, high-risk systems face stringent regulations, and low-risk systems are subject to minimal oversight.
5. Identify gaps: the resulting categorised systems should be reviewed for compliance with the obligations under the relevant risk category.
6. Implement: any identified compliance gaps should be remediated.

Gender Pay Gap Reporting

Gender pay gap mandatory reporting will extend to all organisations in Ireland, both public and private, with 50 employees or more. They must publish a report on their website that details their hourly gender pay gap across a range of metrics and it is intended that from 2025 the reporting deadline will move to November.

Minimum Wage

The national minimum wage has increased to €13.50 per hour with effect from 1 January 2025.

Small Benefit Scheme

The Small Benefit Exemption limit will increase from €1,000 to €1,500 from 1 January 2025. This means that an employer can offer up to 5 gift cards per year to their employees tax-free up to a combined total value of €1,500.

As long as the new Small Benefit Budget 2025 limits are adhered to, no employer or employee PRSI or USC or income tax will be charged on these gift cards, saving hundreds of euros per year in tax for both employers and employees. Employers must report details of the date paid and the value of the benefit to the Revenue as part of enhanced reporting requirements.

Statutory Sick Pay

While it was initially announced that Statutory Sick Pay would gradually increase to 7 days in 2025 and 10 days in 2026, this phased approach has now been put on hold. The Government is currently reviewing ESRI research on the impact of statutory sick leave before making a decision on any further increases. For now, the SSP entitlement remains at 5 days.