Business lobbyists call for halt to Irish labour market measures

Dublin — Ireland’s main business lobby group has called on the government to pause all further labour market measures that will directly or indirectly increase business costs, saying the pace and scale of recent changes are leading to a rise in business failures.

Ireland has just hiked the national minimum wage 12% to €12.70, increased income thresholds for work permits and broadened statutory sick pay entitlements.

The government plans to increase employer pay-related social insurance, introduce pension auto-enrolment and extend parents’ leave later this year.

The Irish Business and Employers Confederation (Ibec) said this is the biggest single change in Irish labour market policy in decades and companies in the most exposed sectors expect their wage bills to jump about 25% in the next 24 months as a result.

“We can already clearly see through our membership network that business failures, particularly in the SME sector, are rising rapidly,” Ibec CEO Danny McCoy said in a letter to Prime Minister Leo Varadkar that the group published on Monday.

Business insolvencies in Ireland rose 32% year on year in 2023, but were still below pre-pandemic levels. Accounting firm PwC, which compiled the figures, expects a similar rise in 2024 and a return to the 20-year average of annual closures.

Ibec said 74% of business owners it surveyed in December see the rising cost of doing business as the single biggest challenge in 2024.

The group said the paused measures should include planned further minimum wage increases towards a national living wage, further increases in work permit income thresholds and any other additional leave or regulatory costs.

The government introduced a €250m package in late 2022 to help alleviate some of the costs, offering firms grants of up to €5,000 each in 2024.

Reuters