How to Hire in Ireland

With a strong digital economy and a startup-friendly environment, Ireland might be a great location to expand to if your company is considering doing business in Europe. Its tax benefits and flexible business approach contribute to Ireland ranking 16^th in best for countries open for business and 24^th for ease of doing business.

Although Ireland’s government supports business, businesses are not exempt from employment laws and compliance requirements. This applies even if they are only hiring a small number of people. This guide will help ensure you have realistic expectations as you hire employees in Ireland.

How can businesses hire in Ireland?

The Irish economy remained stable and reliable throughout the pandemic. In the past few decades, the skilled labor market has made Ireland a popular destination for companies seeking top-tier talent overseas.

Employers must choose between hiring independent contractors or part-time and full-time employees when seeking to acquire talent. Your Irish workforce must meet the standards of the category you choose.

There are three options for employers planning to hire in Ireland:

1. Independent contractors
2. Direct employees
3. Professional Employer Organization (PEO)

We’ll break down each option to help you make the best decisions for your business growth.

Hiring Contractors

Hiring independent contractors in Ireland is a flexible way to add workers, but it can come with the risk of misclassification—and expensive fines and legal penalties—if you don’t adhere to the employment guidelines for contractors. These include:

• Contractors can work for multiple companies at the once and cannot be limited to working exclusively for your business.
• Contractors are responsible for their working status and schedule—the business cannot dictate specific hours of operation.
• Contractors must be project-based, or they must work for shorter periods of time. If a contractor extends their time with a company, they run the risk of being classified as an employee.

We’ve heard many clients’ horror stories when it comes to hiring contractors abroad. The government considers it a misclassification if a worker does not meet the above criteria. When this happens, the worker can sue the company for benefits, overtime, holiday pay, and more.

Related: Eliminate international contractor risk

If the agreement is not clear or followed, the government usually supports the contractor. In addition to these costs, the company may also face fines and penalties for the violation.

U.S. companies hiring and paying in Ireland need international contractors to fill out IRS Form W-8BEN. This certifies their foreign worker status in the eyes of the U.S. government. Although this step will resolve tax compliance for the employer in the U.S., the business will still need to abide by Irish employment law.

Hiring an independent contractor in Ireland can be an efficient method of employment if the above guidelines are met.

Related: Guide to paying foreign contractors

Hiring Employees Directly

If you are planning to hire part-time or full-time employees in Ireland, you will need to establish a legal entity there. Establishing a legal entity is expensive and time-consuming. It can take three to six months to complete.

Legal entities are the foundation of all operations within a country. They can impact every aspect of a business, including finance, accounting, IT, and other supply chain functions. If this is the route your business decides to pursue, it’s highly recommended that you work with an expert during this process.  This ensures that the structure isn’t inefficient or costly to maintain.

In general, there are three primary components to incorporating a business in Ireland:

1. Incorporation and Registration
   • This includes preparing the right registration documentation, corporate governance structure, business licenses, tax ID, and more.
2. Post Incorporation
   • The work doesn’t stop once the legal entity is created. After incorporation comes the payroll setup, benefits registration, account setup, banking, and more.
3. Corporate Annual Compliance
   • Finally, after all the setup work is complete, the entity will need to be reviewed on an annual basis. This includes tax, payroll and statutory returns, along with other important financial statements.

Related: 10 things to know about setting up a legal entity overseas

Outsource Hiring to a PEO Provider

Companies looking to hire employees in Ireland but don’t want to or aren’t ready to set up an entity often engage with a Professional Employer Organization (PEO). PEOs, sometimes called an employer of record (EOR), act as hiring and HR partners to your business.

A PEO hires workers on your behalf and shoulders much of the administrative burden related to the HR function of a business. This reduces the potential risks and liabilities. With a PEO, the company retains control over its employees’ daily activities, freeing up time and resources for other tasks.

By leveraging an existing network of legal entities, employers can rely on a PEO to ensure faster hiring, employee benefits, payroll administration, and more, without sacrificing compliance. Here are a few of the administrative services a PEO provides:

• Fast international hiring
• Payroll management
• In-country compliance
• Reduced risks with international contractors
• Global talent acquisition
• Best-in-class HR technology for international workforces
• Irish employment contracts

Related: Ireland employer of record

Irish Employment Law

Working Hours

An employee may work an average maximum of 48 hours. The 48 hours of work do not include time spent on annual leave, sick leave, maternity leave, adoptive leave, or parental leave. This must be included when the employer creates the .

The contract should reflect the number of hours an employee works over 12 months. If an employer refuses a request with a dissatisfactory explanation, the employee can complain to the Workplace Relations Commission (WRC).

Leave Requirements

Annual leave (also called holidays from work) is paid time off work. All employees receive annual leave, including part-time, full-time employees, temporary, and casual workers. In most situations, employees receive four weeks of annual leave each year.

Of course, they could have more depending on the specifications of their employment contract. In addition to annual leave, here are some additional requirements businesses should be aware of:

• Maternity leave
• Adoptive leave
• Paternity leave
• Parental leave
• Parent’s leave
• Health and safety leave

Recordkeeping

Employers in Ireland must keep extensive records of their employees. Breach of any of the following could cause compliance violations and legal penalties. Here are a few requirements you’ll need to implement as you hire in Ireland:

• The number of hours employees work on a daily and weekly basis.
• The amount of leave granted to employees in each week as annual leave or as public holidays.
• Details of the payments in respect of this leave.
• Employees’ start and finish times.

Employment Rights

Irish employees have the right to report to the government if they feel like they’re being mistreated by an employer. Before an employee can do this, they must notify their employer of their intentions to contact the WRC. This rule was established to encourage companies to resolve employee-related disputes internally.

Work with Global PEO Services

Growing globally can be an exciting time for an organization. While there are always risks and challenges during global expansion, Global PEO Services (GPS), a Safeguard Global company, can help mitigate these risks, while still giving you control over your day-to-day operations. Staying updated on the laws and regulations in Ireland can make hiring and paying employees difficult.

We manage all the legal requirements and payroll, while the business manages the international team on their daily tasks. For companies hoping to hire and pay in Ireland, GPS can help you grow and remain compliant.