Ireland: 2026, Looking Ahead

The following are labour-related matters in Ireland to watch out for in 2026.

1. Pensions auto-enrolment

As Ireland is set to implement a pension auto-enrolment scheme on 1 January 2026, employers are taking proactive steps to ensure compliance with the upcoming changes.

As previously reported in our L&E Global update, with effectivity on 1 January 2026, all employees aged between 23-60 and earning over €20,000 per year who are not yet enrolled in a pension scheme will be enrolled into MyFutureFund (the “Fund”), a State run auto enrolment pension system linked to an employer’s payroll system.

The Fund is designed to support the aging population of Ireland by boosting retirement savings for employees through auto-enrolment and to try to ensure people can maintain a certain standard of living after retirement.

The Fund  will be run and managed by a new independent body set up by the Department of Social Protection, which is the National Automatic Enrolment Retirement Savings Authority (NAERSA). All employers are required to register and complete their employer profile by 31 December on the MyFutureFund portal, which is an online system via which employers will interact with the Fund.  Employees will also be given access to this portal to view their pension savings, contributions, and investment returns. The portal will also allow for employees to opt out (after a period of 6 months), suspend contributions, or opt-into the scheme.

As of 1 January 2026, the employee’s contributions, the employer’s contributions, and the state contributions (all outlined below) are taken automatically and invested for the employee’s retirement, in addition to an employee’s State Pension entitlements.

During years 1 to 3, employers and employees will each contribute 1.5% of the salary. This will rise to 3% each in years 4 to 6, 4.5% each in years 7 to 9, and reach 6% each in year 10. For every €6 contributed by the employee and employer, the state contributes an additional €1. In other words, every €3 put aside by an employee becomes €7 in their pension pot. Contributions are fixed, and it won’t be possible to contribute more or less than the set rate, as illustrated in the below table.

 

Years	Employee %	Employer %	State top-up %	What that means
1-3	1.5%	1.5%	0.5%	For every €3 the employee pays, the employer pays €3 and the State adds €1.
4-6	3%	3%	1%
7-9	4.5%	4.5%	1.5%
10+	6%	6%	2%

 

Both the employer and State contributions are capped at €80,000 gross annual salary. It is important for employers to note the criteria and obligations imposed on them if their employees will fall within the scope of pension auto-enrolment.

 

 

Minimum Pension Contribution Rates within Pension Enrolment

Recently, the Department of Social Protection (the “Department”) met with the Irish Association of Pension Funds (“IAPF”) to discuss and agree on  minimum contribution rates for employers and employees into new or existing occupational pension schemes and personal retirement savings accounts (“PRSA”) for those employees who are in “exempt employment” and as such, are not automatically enrolled in the Fund.

The Department has indicated that it intends to introduce regulations setting out minimum pension contribution standards which employers will be required to meet to ensure employees remain in “exempt employment” and avoid having to enrol those employees into the Fund. The purpose of these regulations is to avoid situations where employers could compel employees to join their occupational pension plan at a lower contribution rate than that provided for under auto-enrolment, leaving employees receiving less favourable terms than would be available to them under auto-enrolment, and with no option to ever join auto-enrolment.

Overall, employers with no existing occupational pension plan or PRSA in place  must register on the portal by 31 December and those with existing pension arrangements in place should consider whether the current pension arrangements exceed, or at a minimum, meet the contributions provided for under the Fund. If you require further information or expert advice on this, please do not hesitate to contact us.

2. Pay Transparency Directive

EU member states have until June 2026 to implement the EU Pay Transparency Directive (the “Directive”). The Directive aims to enhance pay transparency and improve access to redress for workers who allege gender-based pay discrimination. The Directive also requires employers to report on the gender pay gap between categories of workers distinguished by basic and variable pay.

Global employers are entering a new era in which pay transparency requirements and gender balance expectations in corporate leadership are no longer separate compliance topic but interconnected elements of a broader regulatory and cultural shift toward measurable workplace equality.

The Equality and Family Leaves (Miscellaneous Provisions) Bill 2024 is in draft form. This, together with the proposed Pay Transparency Bill (a draft of which has not yet been published), will transpose the EU Pay Transparency Directive in Ireland.  We do not currently have any guidance as to when the Pay Transparency Bill will be published. However, we expect that it will be imminent as it is due to be implemented by June 2026.

The Directive places a strong emphasis on transparency and accountability. Under the Directive, employers are required to have pay transparency in job advertisements and provide information regarding pay levels. Currently, employers are only required to provide data, which is broken down by gender – whereas the Directive requires that the data be broken down by “categories of worker” in respect of basic and variable pay.  Accordingly, the existing Irish legislation will need to be revised to include the requirement for employers to provide this additional information. The Equality and Family Leaves (Miscellaneous Provisions) Bill 2024 does not address this.

Under Article 7 of the Directive employees will have a right to information in writing on their individual pay level and average pay levels, broken down by sex for categories of workers performing the same work or work of equal value to their own. The onus is placed on the employer to ensure that this information is provided to employees on an annual basis and steps are taken to exercise that right.

Ireland has already enacted Gender Pay Gap reporting legislation. However, the Directive introduces significant additional gender pay gap reporting requirements for employers in Ireland and across Europe. Reporting on a pay gap will be mandatory for employers with at least 100 employees, with the obligation being implemented progressively. It is likely that the current Irish threshold of 50 or more employees for reporting purposes will remain. If a pay gap report shows an unjustified pay difference of 5% or more—one that cannot be objectively explained or has not been corrected within six months—the employer must carry out a joint pay assessment in cooperation with workers’ representatives. If no representatives exist, workers should appoint some specifically for this purpose. The goal of the joint pay assessment is to ensure that, within a reasonable timeframe, any gender-based pay discrimination is addressed and removed through appropriate remedial measures.

Employers can prepare for this imminent change by upgrading data systems, run test cases, review pay policies and structures and train HR staff. Employers should seek to identify and remedy any potential issues with pay transparency in the workplace now to ensure ease of compliance in the new year.

3. Artificial Intelligence and its role in employment law

2026 will mark an acceleration of digital transformation in the legal industry. Inevitably, Artificial Intelligence (AI) will continue to be used and supported by employers. It is clear that employers are implementing and rolling out the use of AI within their business and AI will most definitely be used by Human Resources for the foreseeable future. Therefore, it is necessary for employers to understand AI and assist in its implementation across the business.

AI is currently being used and will continue to be used for a range of functions by the employer, such as:

• Recruitment
• Pay ranges
• Performance management
• To assist in the handling of high volumes of automated tasks

Employers should now be considering implementing robust policies to deal with AI in the workplace and otherwise.

Recently, the Irish Workplace Relations Commission (the “WRC”), where most employment law claims are taken, addressed the issue of AI being used to draft legal submissions. The WRC has now implemented new guidance on the use of AI tools to prepare such submissions. This guidance followed a recent decision of the WRC, Fernando Oliveira v Ryanair DAC. In this case, the Complainant relied on AI to formulate their submissions to the WRC and it transpired that the submissions, which were very lengthy, referred to incorrect, irrelevant or non-existent legal citations.

The WRC guidance clarifies that AI tools such as ChatGPT, AI writing assistants, or AI based legal research websites can assist in drafting and explaining legal concepts but should not be relied upon as legal advice. All submissions to the WRC are the responsibility of the submitting party even if an AI tool was used to prepare them.

As the use of AI becomes increasingly embedded in workplace practices, employers must recognise both the opportunities and the risks it presents. Clear governance, transparent processes, and ongoing oversight will be essential to ensure that AI is used responsibly, lawfully, and in a way that supports—not replaces—sound human judgement. The evolving guidance from bodies such as the WRC highlights that the legal landscape is already responding to the challenges posed by AI. Employers who proactively prepare, educate their workforce, and establish strong internal frameworks will be best placed to navigate this new era confidently and compliantly.

4. Retirement Ages

In Ireland, a new Employment (Contractual Retirement Ages) Bill 2025 (the “Bill”) has progressed to the final stages of the Irish legislative process and is on track to being signed into law.

At present, the State Pension Age in Ireland is 66. Once enacted, the Bill will permit employees who are subject to contractual retirement ages below the State Pension Age of 66 to notify their employer that they do not consent to retirement at the contractual retirement age.

Currently, the Code of Practice on Longer Working SI No. 600 2017 (“Code of Practice”) is in place. This was developed to assist employers in managing employee requests to work longer and continue in employment beyond the State Pension Age. Enforcing mandatory retirement is a very contentious issue in Ireland and one which has given rise to much litigation in recent years, so it is an area that requires careful consideration.

The progress of the Bill should encourage employers in anticipation of the Bill being implemented into law to update relevant policies on longer working particularly where the mandatory retirement age is below the state pension age.

5. New guidance issued in Ireland in relation to misclassification of employees in settlement arrangements which arises from the Supreme Court case of Revenue v Karshan (Midlands) Ltd. Trading as Domino’s Pizza

The Revenue Commissioners in Ireland recently released new guidance for employers which sets out how to correct any payroll tax issues resulting from the misclassification of employees as self-employed persons in 2024 and 2025, following the Supreme Court’s decision in October 2023 in Revenue Commissioners v Karshan (Midlands) Ltd t/a Domino’s Pizza (“Karshan”). Any errors recorded in 2024 and 2025 tax years must have been bona fide classification errors. Employers have until 30 January 2026 to avail of the correction opportunity.

The Supreme Court ruled in Karshan that delivery drivers working for the company were not independent contractors but were in fact employees for the purposes of the Taxes Consolidation Act 1997.

The misclassification of an employee could be deemed as a serious error with significant legal and financial consequences for an employer. If a worker is misclassified as an independent contractor, then they are not afforded the full suite of rights and benefits that employment law grants to employees such as pay and leave entitlements.

Since the Supreme Court ruling in Karshan, it has become apparent that some employers may have misclassified employees, in good faith, as independent contractors and are struggling to make the appropriate corrections now. In recognition of this, Revenue is giving employers a window of opportunity to submit corrective disclosures, amending any payroll errors by 30 January 2026. It is in the interest of all employers to prioritise this issue and complete a comprehensive assessment of their workforce a soon as possible, considering both tax and employment law implications of any employees who may be misclassified as contractors.