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Blog  »  July 2012  »  Costs of Employment Set to Increase - Blog
Jul 12

Posted by
Ciaran Loughran

Costs of Employment Set to Increase

At a recent launch of a new government website, Minister for Jobs, Enterprise and Innovation Richard Bruton TD stated that:

A key part of our plan for jobs and growth is reducing costs, particularly by reducing where possible that Government regulations impose on business.

Recent speeches and mutterings coming from the Government parties suggest however, that the burden being imposed on employers is likely to increase rather than reduce. Some of these mutterings may be considered as kite-flying on behalf of the Government, but can only lead us to conclude that employers need to be prepared to face higher costs of employment.

Minister for Social Protection Joan Burton has suggested in a speech that the PRSI contributions of employers will have to increase and we are facing the prospect of employers being made responsible for the payment of sick leave to their employees. These extra costs are likely to affect the small firms in particular who are already struggling to maintain jobs in a difficult environment. This follows on from the reduction of rebate on statutory redundancy from 60% to 15%, which was made in the budget last December.

If the proposals on sick pay are introduced, employers who currently don’t pay any sick pay will find themselves with an immediate extra cost. At the moment if the business is able to get by without the absent individual and the state pays the benefit costs, the employer may ignore the absence without seeing an effect on their cash flow. The emphasis will have to be different if these changes go through and employers will have to proactively manage the issue.

As part of this absence management, and in order to reduce the exposure to higher costs, it is important that employers ensure that details on how certified absence will be managed within the company are included in the contract of employment and handbook.

Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll Software

Posted in Employee Contracts, Employee Handbook