Employment Updates – Changes to Employee Contracts & P45’s

March 2019

Abolition of the P45
The P45 was abolished at the end of 2018 and is not being issued for employments which ceased on or after 1st January 2019.

If the employment ceased prior to 1st January 2019, employers are obliged to issue a P45.

Changes to Employee Contracts under the Employment (Miscellaneous Provisions Act) 2018
As of the 1st of March 2019, the Employment (Miscellaneous Provisions Act) 2018 came into effect and it is very important that businesses are aware of the significant changes that will be introduced by the act and that employees know their rights under the act.

The act is designed to offer employees greater security and predictability with their working hours.
Some of the key aspects of the act are as follows:

Terms of Employment
Employers will be required to provide employees with a written statement that outlines their basic terms of employment within FIVE days of their employment commencing. The statement must include the number of hours that the employer reasonably expects the employees to work.

Zero Hour Contracts
Zero hour contracts are prohibited by the act except in the case of genuine casual employment.

Minimum Payments
If an employer requires an employee as a matter of contract to be available for a certain number of hours per week and/or on an “as and when required basis” that employee is entitled to at least 25% of those contracted hours or to at least 25% of the hours for which work of the type which the employee is required to make himself available to do has been done for the employer (the “25% figure”).

In the event that the employee is not provided with such work, he or she is entitled to be paid in respect of that 25% figure or for a total of 15 hours’ work (whichever is the lesser). The rate of pay to be applied in respect of those hours is 3 times the national minimum wage or 3 times the minimum hourly rate specified in any applicable employment regulation order.

National Minimum Wage Rates
National minimum wage rates for younger people have been simplified and will be based solely on the individual’s age, while trainee rates have been abolished.

Hourly Rates of Pay (National Minimum Wage Acts, 2000 & 2015)

Category of employee Hourly Rate
Category of Employee
(from 4 March 2019)
Hourly Rate
(Age-related from 4 March 2019)
Experienced Adult Worker €9.80 Experienced Adult Worker €9.80
Under 18 years €6.86 Under 18 €6.86
In the first year after the date of first employment over 18 years €7.84 Aged 18 €7.84
In the second year after the date of first employment over 18 years €8.82 Aged 19 €8.82

From March, a person who commences employment for the first time at age 20 or over must receive the full NMW rate of €9.80.

Training Rates*  

From 4 March 2019 the Training rates will be abolished (rates applicable will be age based, as above, or full rate of €9.80)

First one third period €7.35
Second one third period €7.84
Third one third period €8.82

*For training or study undertaken in normal working hours over 18 years.

Employers need to check arrangements with any member of staff that is employed on a casual basis to ensure that they are fully compliant with the new act. In particular they need to ensure that they have adequate systems in place that enables them to provide basic terms of employment within the 5 day limit.

PAYE Modernisation
We have successfully navigated the new PAYE Modernisation system with Revenue for all our clients. If you would like to discuss how we can help your business please do not hesitate to contact us on 021-4321 799 or email info@paulodonovan.ie.

More information on the Employment (Miscellaneous Provisions Act) 2018 can also be found here.