Skip to main content

Changes to salary thresholds for sponsored foreign workers may hit SMEs

By January 12, 2024No Comments

Many small and medium sized businesses may struggle to retain existing staff due to upcoming changes to the required salary thresholds for some workers from outside the European Economic Area coming into Ireland on work permits, a leading immigration services provider has warned.

Last month the Government announced the largest ever expansion of the employment permits system in an effort to address the skills gap in a number of key areas in the economy.

But the changes also involve an increase in the salary requirements for most General Employment Permit holders from €30,000 a year to €34,000 from January 17 – the first change in over a decade.

Healthcare assistants and home carers’ salary requirement will increase from €27,000 and horticultural workers and meat processor salary requirement will increase from €22,000 to €30,000.

According to Fragomen Ireland, many employers and in particular the SME sector, are likely to face a significant challenge in adjusting to the changes.

It warned that the short time frame for implementation means many SMEs and even larger employers are unprepared to retain someone with an expiring permission after that date or to hire someone new.

“The increases in salary are welcome and overdue in light of the increased cost of living, however, given the short notice many smaller businesses with limited financial growth, resources and lack of specialist advisors may struggle to adjust and retain even existing staff,” said Fragomen Ireland Managing Partner Ángel Bello-Cortés.

“The UK recently also announced salary threshold changes but has given employers until April,” he said.

“The much shorter timeframe of only a month’s notice in Ireland assumes that all industries have planning in place or can adjust seamlessly which is not the case. SMEs will need to move quickly and may not be prepared for the planning that this involves, or the budgetary impact,” he added.

The organisation said the changes pose a particular risk for non-EEA as the minimum salary for graduate jobs will significantly increase.

The healthcare sector, gaming sector, languages and food and beverages sector, which are heavily dependent on migrant labour, are most likely to be affected.

A further increase in salaries is due to kick in this time next year.

Fragomen said it means that a business employing a graduate on €27,000 right now will need to offer them 50% more to continue to employ them next year.

Announcing the changes last month, the Minister of State for Business, Employment and Retail Neale Richmond pointed out that the salary thresholds had not changed in some time and had not kept pace with inflation or economic growth.

But to balance the rights of workers with the needs of businesses to prepare for the impact of these changes, the increased salaries would be introduced on a phased basis, he added.

Article Source – Changes to salary thresholds for sponsored foreign workers may hit SMEs – RTE

Copyright and Related Rights Act, 2000

This will close in 0 seconds