Employment Permits Act makes Ireland more attractive, say firms

Rachel Dillon, tax partner at EY Ireland specialising in people advisory services.

Originally published in the Irish Examiner on 6th September 2024 at https://www.irishexaminer.com/business/companies/arid-41470300.html.

Seasonal Employment, General Employment and Critical Skills Employment Permits — key changes explained by an industry expert

Employers have broadly welcomed the introduction into Irish law of a new Act easing access to work permits for overseas non-EU workers.

The Employment Permits Act 2024 will particularly reduce the red tape for seasonal workers applying for work permits in Ireland. There are several significant changes being introduced.

For example, new permits for non-consultant hospital doctors will allow them to work at multiple sites. A new quota of 500 permits will be granted to the home care sector, while a further quota of 250 permits will be issued to lineworkers to help relieve the pressure on the ESB Networks’ overhead line framework contractors.

In this insightful Q&A interview, Rachel Dillon, tax partner at EY Ireland specialising in people advisory services, looks at some of the key changes introduced by the new Act.

How significant are the changes coming into effect with the new Employment Permits Act?

The introduction of the Employment Permits Act 2024, which came into effect at the beginning of September, has introduced a series of changes that will have a significant impact for the businesses and employees.

Some of the key updates include:

Modernisation of labour market testing to allow employers to advertise vacancies on “one or more online platforms” rather than requiring employers to advertise in print media. Employers will continue to be required to publish vacancies on the Jobs Ireland and EURES websites.

Employment permits are now available to individuals engaged through Irish employment agencies, marking a significant development in the flexibility of the Irish labour market. A Seasonal Employment Permit has also been introduced, allowing seasonal workers to be employed for seven months out of a calendar year.

Holders of General Employment Permits (GEPs) and Critical Skills Employment Permits (CSEPs) are now allowed to submit a request to change their employer after nine months of holding their current permit, without obtaining a new permit subject to meeting the prescribed conditions.

In a move that simplifies career progression and reduces administration, employment permit holders are no longer required to apply for a new permit if they move to a new role or are promoted by their current employer as long as they continue to use the same skills.

Finally, the minimum salary threshold for employment permit applicants will be indexed against average weekly earnings in Ireland based on data from the Central Statistics Office.

With a range from targeted tech skills through to seasonal and contractor roles, are the new regulations wide enough?

From an employer's  perspective, the introduction of both the new Seasonal Employment Permit and allowing employment agencies to apply for employment permits are welcome developments. These initiatives aim to address key talent shortages in our indigenous industries and allow job agencies to apply for employment permits, acknowledging the importance of contractors and short-term workers to our economy.

However, employers will need to consider how the new rule — allowing holders of General Employment Permit (GEPs) and Critical Skills Employment Permit (CSEPs), to change their employer after nine months without the requirement to obtain a new permit — will impact on their talent retention strategies. In addition, the cost implications of the changes to the minimum salary threshold, which will now be indexed against the average weekly earnings in Ireland, will also have a financial impact on businesses and will need to be taken into account by employers.

The cost and length of time involved to complete Labour Market Needs Testing is likely to remain a challenge, particularly for small employers.

In what ways will Ireland now be able to react to respond more quickly to changes in the labour market and business needs?

These changes introduced in the Employment Permits Act 2024 will enhance flexibility and responsiveness in Ireland’s labour market — which is more important than ever. The Modernisation of the Labour Market Needs Test is a key factor to this enhanced responsiveness. By removing the requirement for employers to publish adverts for employment in print media and instead allowing them to advertise the roles “on one of more online platforms” reflects more modern job advertising methods and one would think, should certainly assist in this regard.

With that said, while these changes are promising, we will need to wait to assess the actual practical impact of the overall changes to determine how quickly they will enable Ireland to respond to future changes in the labour market. Watch this space!

Will the new Act help Ireland in its ambition to become the “destination of choice for skilled workers”?

The new Act 2024 includes a number of changes which are specifically directed at workers and aim to provide them with greater flexibility, access to better employment opportunities and to manage the cost of living. These targeted changes should make the Irish immigration system more attractive and easier to navigate from a workers’ point of view.

However, while it is very important to have an immigration system which supports our workforce and talent needs, this is just one aspect of ensuring that Ireland becomes the “destination of choice for skilled workers” to ensure that we can remain competitive from an international talent attraction and retention perspective.

What future changes could be useful in making Ireland even more attractive to overseas talent?

While the recent updates are welcome changes, it is important to remember that the Irish immigration system is just one factor in achieving our ambition of making Ireland the “destination of choice for skilled workers”. There are many other factors that need to be considered. From my experience of working with international and mobile employees, factors such as the personal tax rates, cost of living, high levels of personal safety and strong infrastructure, including housing and education, are key criteria in attracting overseas talent to relocate, to live and work in Ireland. These must be key areas of focus to ensure Ireland is attractive to overseas talent given how crucial this is to our economy.