Increases in the minimum wage, changes to sick leave entitlements and a new automatic enrollment system for pensions are among a range of government measures due to come into effect in 2024.
Unions have welcomed enhanced employee benefits, but many companies warn they will struggle to cope with rising costs.
Childcare provider Eileen Dunne is preparing to reopen after the Christmas holidays.
She’s looking forward to welcoming the kids back in January, but isn’t looking forward to what else the new year will bring.
Ms. Dunne is a member of ISME and President of the Association of Early Childhood Providers.
She fears rising costs will lead to further closures in her industry in 2024.
“PRSI and the minimum wage increase are big things for us,” Ms Dunne said.
“Many providers are stuck with fee freezes, so how are we supposed to pay for these increases without having money in the bank to do so?
“There is a real fear that this will put many of us out of work, as we lost seven services over Christmas and five of them were in Cork.”
“The concern is how many more counties, rural and urban, will take a hit from closures because of all these new costs that are coming at us,” she added.
The cumulative effect of the new measures could see companies’ recruitment costs increase by a third over the next two years, according to analysis by Excel Recruitment.
Increases in the national minimum wage, the introduction of the Planned Living Wage, new sick pay entitlements, improvements to parental leave and entitlements, the right to request remote working, increases in PRSI and the new auto-enrolment pension scheme could see business costs rise by 36%, it has been found. search.
Business group Ibec estimates that the annual increase in labor costs resulting from these measures will exceed 4 billion euros.
“The main issues here revolve around the fact that it is not coordinated and is all coming at the same time,” said Maeve McElwee, executive director of employer relations at IBEC.
“We’re seeing cumulative costs come down more or less in January for a lot of employers,” McElwee said.
However, unions say most of the measures to be introduced in 2024 will benefit workers and bring Ireland up to playing catch-up with our EU neighbours.
“Many of these matters have been pointed out in advance,” said Owen Reidy, general secretary of the Irish Congress of Trade Unions.
“We must also remember that these issues bring Ireland into line with some of the fundamentals that our colleagues have across Western Europe,” Reddy said.
The Department for Enterprise, Trade and Employment said the recently announced “Business Grant Cost Increase” is worth €257 million which will help 143,000 businesses in early 2024.
A ministry spokesperson said: “The government will continue to monitor what remains a challenging business environment and will continue to provide targeted and practical support.”
Business owners like Ms Dunn say additional support is needed soon with costs approaching a year of rapidly rising costs.