The employment law changes Ireland 2026 will introduce some of the most sweeping updates SMEs have faced in years — from wage increases to pensions and new transparency rules. These changes aim to improve fairness and employee protections, but they also bring higher compliance obligations and rising payroll costs.
This guide breaks down what’s coming, what it could cost, and how Irish SMEs can prepare effectively — especially during 2025.
💶 Living Wage Replacing Minimum Wage — January 2026
As part of the employment law changes Ireland 2026, the national minimum wage will be replaced by the living wage, projected to start at €15/hour. That’s up to €3.70/hour more for each minimum-wage employee.
Businesses in hospitality, cleaning, and retail will be most affected. Many will need to revise internal pay bands to prevent wage compression — where team leaders earn close to entry-level rates.
🤒 Statutory Sick Pay Expansion — 2026 Phase
Another key element of the employment law changes Ireland 2026 is the continued rollout of statutory sick pay. By 2026, employees will be entitled to 7 days of paid sick leave, rising to 10 days by 2027.
Employers will pay 70% of the employee’s wage during sick leave, capped at €110/day. This adds about €0.13/hour to labour costs and requires proper tracking via payroll systems.
💼 Auto‑Enrolment Pension Scheme — Starting January 2026
A major shift in the employment law changes Ireland 2026 is the launch of the auto-enrolment pension scheme. It applies to employees aged 23–60 earning over €20,000/year who aren’t already in a pension.
Key points:
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Starts with 1.5% employer contribution
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Government adds a state top-up
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Applies to earnings up to €80,000
Estimated cost per employee: ~€0.23/hour
💬 Pay Transparency Directive — In Force June 2026
From mid-2026, the EU’s Pay Transparency Directive (2023/970) will require employers to:
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Publish salary ranges in job adverts
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Disclose gender pay gaps
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Document how pay and promotions are decided
This will increase HR and admin workloads and may impact employer branding if not managed proactively.
📊 Summary Table: 2026 Employment Law Changes
| Change | Effective Date | Estimated Cost Impact | Reference |
|---|---|---|---|
| Living Wage (~€15/hr) | Jan 2026 | +€3.70/hr | gov.ie |
| Statutory Sick Pay (7 days) | Jan 2026 | ~€0.13/hr | gov.ie |
| Auto‑Enrolment Pension | Jan 2026 | ~€0.23/hr | gov.ie |
| Pay Transparency Directive | Jun 2026 | Admin/compliance costs | eur-lex.europa.eu |
🧩 Government Support for SMEs
🔸 Local Enterprise Office (LEO) Grants
LEOs offer supports including:
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Energy Efficiency Grants (up to €8,000 for hospitality/retail)
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Digital vouchers and training grants
🔸 SME Regulation Screening
The SME Test ensures future regulations — like those seen in the employment law changes Ireland 2026 — are reviewed for disproportionate impact on smaller businesses.
🧠 Strategic Preparation for Employers
The employment law changes Ireland 2026 are not just legislative updates — they signal a wider shift in how businesses engage with their workforce. Here’s how to get ahead:
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🔍 Review pay structures to maintain fairness
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💻 Update payroll systems for auto-enrolment & sick leave
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📢 Use transparency reforms to position your business as a fair employer
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💡 Apply for grants to offset costs (especially energy or digital upgrades)
✅ What to Do in 2025
This year is critical. Employers should take action during 2025 to get ahead of the employment law changes Ireland 2026:
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Budget for €4+/hour increase in labour cost
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Prepare for pension enrolment
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Train managers on policy changes
📣 Ready for 2026?
These reforms are designed to raise working standards — and forward-thinking businesses will use them to stand out, attract talent, and modernise operations.
📞 Let’s talk about what these changes mean for your payroll, compliance, and team strategy.
👉 Let’s schedule a 20-minute discovery call or get in touch to prepare your business confidently for 2026.
