To do business in Ireland, it is vital to have a good understanding of its business or work culture. Making the right impression with the right people is the key to success in Ireland, and it is important to back this up with the right research on the market and potential business associates.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the Irish work culture, we want to support your global expansion plans. Therefore, we will address all aspects of the work culture in Ireland to start your expansion well-informed.
Work Culture in Ireland
Foreign companies targeting Ireland for their international expansion plans must have a thorough understanding of the country’s work culture and business environment as well as the economy.
Ireland has one of Europe’s fastest-growing economies – advancing at almost double the European average, with over 40% of its Gross Domestic Product centered on the capital, Dublin. Service industries, including a huge IT sector, account for 60% of GDP with industry accounting for virtually all of the remainder.
Legislation covering the workplace applies strict rules on discrimination and health and safety, but the atmosphere itself tends to be open and relaxed with employers aware of the importance of a satisfactory work-life balance. The Organization for Economic Cooperation and Development ranks Ireland in Europe’s top 10.
Hierarchies are flexible, first name terms are generally used early in business relationships and the Irish might prefer to know who you are by socializing rather than giving them a business card. Here are some other tips about the local work culture that will help you succeed in Ireland:
- Punctuality: A relaxed approach to meeting and greeting does not stretch to punctuality, so be on time. Plan your journey carefully if the meeting is in busy Dublin – which is likely to be the venue.
- Language: Meetings will be conducted in English – a working knowledge of Gaelic is not expected.
- Business Relationships: Be prepared to spend time building trust and relationships, so chatting about the weather, traffic and family is fine and helps to relax the atmosphere. If you’re on the end of a well-meaning joke, that probably means you are being accepted. However, once this marker has been reached the focus will quickly switch to the business reason for the meeting.
- Introductions and Greetings: Firm handshakes, a ‘Hello’ are a good start. Maintain eye contact otherwise you may seem shifty and insincere. Good humor, modesty and a friendly approach will go down well. Start the handshakes with your most senior counterpart, usually the person chairing the meeting, and work down from them. If introductions begin with ‘Mr.’ and ‘Mrs.’ they generally quickly move to first name terms.
- Gift-giving: There is little tradition for this in Ireland, so any small gifts should be thoughtful rather than ostentatiously expensive. Flowers are best avoided as certain species or colors can have particular significance. If invited into a home, chocolates or wine are a good bet.
- Dress Code: This can vary between companies, but the safe option for business professionals is dark suits for men, and trousers, dresses. or skirts for women.
- Negotiating the Deal: Informal agreements round the table should be turned into a formal written document as soon as possible. Meetings are generally run by a chairperson; judging their response should be a good way of assessing how the deal is moving forward.
- Business Meals: If matters are progressing well, business discussions can be moved to a restaurant, pub, or coffee shop. Golf courses are another possible venue. This may seem an unstructured approach, but it is all part of the process.
Ireland Minimum Wage
There was a rise in the National Minimum Wage (NMW) in Ireland in 2021 from €10.10 per hour to €10.20 for adults above 20 years of age. For a basic 39 hours a week before deductions, this is €397.80 (US$472.38) per week, €1,723 (US$2,946) per month and €20,685 (US$24.563) per year.
Hourly rates for other ages:
- 19 years - €9.18 (US$10.92)
- 18 years - €8.16 (US$9.70)
- Under 18 - €7.14 (US$8.49)
Probation Periods in Ireland
A probation period in employment is a trial period for the employee and employer to assess suitability, competence, reliability and working conditions and can last between three and 12 months. The details should be written into the employment contract including holiday entitlements, possible extension, and notice period.
The contract will not be confirmed until after completing the probationary period to the employer’s satisfaction. Review meetings should be held and at the end of the probation it will either be success, fail or the employer may want to extend the trial. A notice period of one week (statutory minimum notice period) is given if they terminate the contract after the first 13 weeks.
There are circumstances, under the Unfair Dismissals Act (1997-2007), where employees cannot be dismissed, due to:
- Pursuing trade union membership or activities
- Matters relating to pregnancy
- Protection given regarding maternity, parental, adoptive or caregiver’s leave
Working Hours in Ireland
The average working week in Ireland is around 39 hours. However, the Organization of Working Time Act (1997) stipulates that they cannot exceed 48 hours on average, which is calculated over a four-month period for most workers. This includes any overtime worked. However, certain sectors/industries can calculate over a longer period such as:
- Key workers over a six-month period – security, hospital, airports, utilities etc.
- Employer – employee agreements. Over a 12-month period when certified by the Labor Court
- Police and Defense workers
- The self-employed /family businesses
- Seasonal workers
Employees receive a 15-minute break for working four-and-a-half hours and a 30-minute break after six hours, which can include the first 15 minutes. Payment for the breaks is not mandatory and depends on contractual arrangements. Workers should receive 11 hours continuous rest every 24 hours and two 24-hour breaks in seven days.
Overtime in Ireland
Overtime in Ireland is part of the employment contract. If an employee is contracted for a 39-hour week, then any hours over this are classified as overtime. This is up to the maximum number of hours allowed per week under the Organization of Working Time Act (1997) which is 48 hours on average over a four-month period. Overtime can also be written into the contract depending on company policy or can be governed by an industry or sector agreement –Employment Regulation Orders (EROs) and Registered Employment Agreements (REAs) which are legally binding in the sectors to which they apply and may also determine overtime pay rates.
Notice Periods in Ireland
Notice periods in Ireland are regulated by the Minimum Notice and Terms of Employment Acts (1973 to 2005) and determined by professional status and length of employment. For key personnel it is advisable to write pertinent notice periods into the contract, which generally exceed statutory minimums. The notice periods are as follows:
- From 13 weeks to two years - one week
- From two years to five years - two weeks
- From five to 10 years - four weeks
- From 10 years to 15 years - six weeks
- More than 15 years - eight weeks
With less than 13 weeks’ employment, workers are not legally entitled to a notice period. Employers can pay their workers ‘in lieu of notice’ or offer ‘garden leave’ as an alternative to having to work this period. Pregnant mothers on maternity leave cannot be dismissed until after the maternity leave is completed and the employee is back at work.
Redundancy / Termination in Ireland
Employees are protected by the Redundancy Payments, Protection of Employment and Unfair Dismissals Acts. Employees can ask for a written statement as to why they were dismissed from the employer, who must follow strict procedures specified in legislation and give a legally valid reason for dismissal.
Tax-free statutory redundancy payments are based on two weeks’ pay for each year’s employment between 16 and 66 years of age, plus an additional one week’s pay capped at €600 (US$713). Individuals should have been employed for at least two years after the age of 16 and qualify with sufficient PRSI contributions.
Pension Plans in Ireland
Pension schemes are mostly regulated by Ireland’s Pensions Authority. Many larger employers provide occupational pension schemes for their employees, although they are not legally obliged to do so.
The Revenue Commissioners decide whether approved schemes are eligible for tax relief. Both employers and employees fund contributory schemes, whereas non-contributory plans are funded by the employer only. They come in different structures:
- Defined benefit schemes are based on earnings, contributions from employer and employee, their length of service, an index or a fixed amount
- Hybrid schemes are a mix of defined benefit, and a portion of the pension will depend on contribution rules
Individuals that choose not to join an occupational scheme – or have the option not to join – can choose a personal or private pension scheme through life insurance or an investment fund.
Employers may offer a Personal Retirement Savings Account (PRSA) and then deduct contributions from the employee’s salary and remit to the PRSA provider. Employers have no legal obligation to contribute but may do so.
The National Pensions Reserve Fund (NPRF) provides for future public service and social welfare pensions and is similarly not funded by either employers or employees.
Public Holidays in Ireland
There are nine public holidays in Ireland. Employees are entitled to a day off in lieu, a day’s pay or to be added to annual leave, if worked as set out in the Organization of Working Time Regulations (Determination of Pay for Holidays) 475/1997. The holidays are as follows:
- New Year’s Day - January 1
- St Patrick’s Day - March 17
- Easter Monday - April / March
- Early May Bank Holiday - (first Monday)
- Spring Bank Holiday - May / June
- Summer Bank Holiday - (first Monday)
- October Bank Holiday - (last Monday)
- Christmas Day - December 25
- St. Stephen’s Day - December 26
Sick Leave in Ireland
As of 2021 there is no mandatory right to sick pay, which can be contractually agreed between employer and employee, although as of the summer of 2022 this is due to change with the introduction of the Sick Leave Bill 2021. Presently, most companies will pay a full salary for a certain number of weeks.
If individuals are not entitled to sick pay through their employment contract, those with sufficient Pay Related Social Insurance (PRSI) contributions can apply for Illness Benefit, which is paid after three days; but all employees should claim from day one and no later than six weeks after becoming ill. If employees do not have enough income, then they can claim for Supplementary Welfare Allowance.
Illness Benefit is paid up to a maximum:
- Two years - if 260 weeks of PSRI payments have been made since the start of work record
- One year - if employee has made between 104 – 259 weeks of PSRI contributions since start of work record
Working out what employees may be entitled to, also who qualifies can be quite complicated. For formulas, rates of pay (including for dependents) plus other benefits and how to apply, you can check out Ireland's government website, or the Citizens' Information website.
Vacations / Holidays in Ireland
The standard holiday leave due to employees in Ireland is four weeks, or 20 calendar days, per year, for those working five days per week and 24 calendar days for a six-day week. This depends on the hours worked, which must include maternity, paternity, parental, adoptive leave, and time off sick.
Employees can request how their holiday leave is calculated:
- Working hours in a year – 1,365 entitles four weeks paid leave (if there is no change in employment)
- Calculate one-third of a working week per month where more than 117 hours were worked
- Calculate 8% of hours worked in the year, to a maximum of four working weeks
Holiday pay is given in advance at the normal working rate. If employees have worked the public holidays, these can be taken as part of the annual leave.
If illness prevents an employee from taking all of his holiday/vacation leave, this can be carried forward up to 15 months from the start of the ‘leave year’ which runs from April 1 to March 31.
Maternity / Paternity Leave in Ireland
Mothers have the right for 26 weeks of maternity leave and at least two weeks has to be taken before the birth of the child. Maternity benefit is paid at full rate for 26 weeks to qualifying mothers at the rate of €245 (US$290) per week. Maternity Benefit increases for dependents (as with Illness Benefits). The Department for Social Protection (DSP) pays the money directly into employee’s bank account.
Also, an employer may decide to pay the worker their salary in full and then ask for the maternity benefit to be reimbursed, and this is acceptable. Mothers have the option to take an extra 16-week unpaid leave.
For those women on other welfare benefits, they may only receive half-rate Maternity Benefit.
This benefit is paid to those who are:
- On maternity leave from work
- Are covered by Pay Related Social Insurance (PRSI) which is generally 39 weeks of contributions paid in the year before maternity leave starts. There are other combinations: https://www.gov.ie/en/service/apply-for-maternity-benefit/
Note: Tax is payable on this benefit but while on maternity leave, they do not have to pay Universal Social Charge (USC) or PRSI.
Partners/fathers are entitled to two weeks of paternity leave from work for the employed or self-employed fathers or co-parents during the six months after birth. There is no legal requirement for employers to pay employees during this leave.
The paternity benefit is paid for the two weeks of paternity leave at €245 (US$290) per week, providing there have been enough PRSI contributions made – i.e., 39 weeks in the year prior to the paternity leave or in the relevant tax year. The Department for Social Protection (DSP) pays the money directly into employee’s bank account.
Parental leave in Ireland allows for leave to be taken by parents or guardians for up to 26 weeks before the child’s 12th birthday (or their 16th birthday with disability). This is unpaid leave and employees need to have worked for their employer for a year. Welfare benefits cannot be claimed.
Parental Leave Benefits are for parents whose children are under 24 months or adoptive parents within the first two years of placement. Since April 2021, the Parent’s Leave and Benefit Act 2019 has been amended giving each parent five weeks of paid leave during this period at the rate of €245 (US$290) per week.
This is the minimum under the Act, but contractual agreements may provide more benefits. The employer may also continue to pay the employee but can be reimbursed with the parent’s benefit. For more rules and qualifying for this leave, check out the Citizens Information website.
Bonuses in Ireland
Employers in Ireland may choose whether or not to award their employees with bonuses. It may be included in their contracts in which case, and any changes will need the permission of the employees.
Discretionary bonuses as an incentive or reward are usual. However, if they are performance-related and targets have been reached, then the employer is obliged to compensate their employees.
Car Allowances in Ireland
Lump sum allowances made to employees, such as for using their own car, are taxed as salary. Reimbursed mileage rates apply when employees use their own vehicle for the company’s business purposes and these can be made tax free.
Don’t Suffer Culture Shock, Call Us!
To expand into Ireland successfully, it is vital to understand the business culture. With Bradford Jacobs’ Professional Employer Organization (PEO) expertise and knowledge we remove the mysteries of all these issues – freeing your staff to concentrate on growing your business, while we deal with tax and employment compliance. Our on-call HR advisers help with adjusting to the workplace environment and understanding a new culture – giving you happy and productive staff.