Looking Ahead To 2026: What Employers Need To Know

As we move into 2026, employers, HR professionals and employees alike are preparing for a variety of different changes affecting the workplace. The coming year will see major reforms affecting pensions, pay transparency, retirement, minimum standards and collective bargaining capacity.

Automatic pension enrolment goes live

After years of legislative planning and phased implementation, Ireland's long awaited workplace pension auto enrolment system, known as My Future Fund, went live on 1 January 2026.

From 1 January 2026, employers must automatically enrol eligible employees into the My Future Fund unless they already belong to a qualifying pension arrangement. Employees aged 23–60 earning at least €20,000 per year will be covered, and contributions will be shared between employers and employees (starting at 1.5% of the employee's gross pay for both the employer and employee and increasing over time), with the State also providing a top-up.

New regulations introduced in December 2025 set out minimum contribution levels for employer pension schemes and only eligible employees who meet those minimum contributions will be exempt from auto-enrolment in the My Future Fund. Employers will therefore need to review their existing pension arrangements for employees and consider whether those minimum contributions levels are met.

It is important to note that the minimum contributions under the regulations are calculated as a percentage of the employee's gross pay, while typically contributions to an employer scheme/ PRSA are calculated as a percentage of basic pay. This means employers will need to assess the amounts paid in respect of its employees, based on gross figures including bonuses, to determine if the minimum thresholds are met.

If those minimum contributions are not met, both the employer and the employee will be required to contribute separately to the My Future Fund, in addition to the existing contributions being made to the employer pension scheme/ employee PRSA.

Employees who have been auto enrolled will have an initial six-month participation period after which they can opt out or suspend contributions. Those employees may be re-enrolled automatically every two years where they remain eligible.

While there are likely to be some "teething" issues while employers get to grips with the new system and the minimum standards provided for in the regulations, the reform marks a major shift in retirement savings culture and a move towards boosting retirement security for many workers.

Pay transparency and gender pay gap reporting strengthened

Another major development expected in 2026 is the implementation of the EU Pay Transparency Directive (EU 2023/970), which Ireland must transpose by June 2026. The directive will bring wide ranging obligations for all employers (regardless of size) including:

• publishing salary ranges in job advertisements;
• prohibiting pay history questions during recruitment;
• allowing employees access to gender pay data;
• mandating joint pay assessments where unexplained gaps remain for employers who are required to report on their gender pay gap;
• banning pay secrecy clauses.

These measures aim to promote fairness, reduce gender and other pay gaps, and ensure job applicants and employees know how pay decisions are made, encouraging more transparency within Irish workplaces.

Employers are strongly encouraged to begin preparing for compliance with the anticipated legislation. Employers should audit current pay structures and grading for objective justification; prepare pay ranges for roles; provide training to HR and hiring managers; and review contracts for pay secrecy clauses and ensure any variable pay terms are clearly defined.

Gender pay gap reporting obligations have also been extended to cover employers with 50 or more employees, moving beyond the previous threshold of 150 employees. Again, the aim is to further increase transparency around pay differences between men and women within organisations, to understand the reasons for those differences both at an organisational and societal level, and to drive meaningful action to address those variances.

Minimum wage increase and Employment Regulation Orders

From 1 January 2026, the national minimum wage for workers aged 20 and above increased from €13.50 to €14.15 per hour.

New Employment Regulation Orders (EROs) will also take effect in 2026 for sectors like construction, contract cleaning and early-years childcare, setting legally binding pay and conditions for workers. These EROs reflect a broader trend towards sector specific wage standards aimed at improving pay equity in traditionally low-paid industries.

Retirement age

The Employment (Contractual Retirement Ages) Act 2025 was enacted on the 16 December 2025 and is scheduled to commence during 2026. The changes introduced by the 2025 Act (once commenced) will alter how contractual retirement ages are treated, giving employees a right to remain in employment beyond a contractual retirement age (below State pension age) if they choose to do so.

The area of mandatory retirement ages has evolved considerably in recent years, and this new legislation represents a notable expansion of older workers' rights and a challenge to longstanding norms around early and mandatory retirement. In particular, the Act introduces a new right that allows, but does not compel, an employee to remain in employment until the State pension age (currently age 66), even if their contract of employment specifies an earlier retirement age.

Employees with a contractual retirement age below the State pension age can choose not to retire at that age, by providing written notice to their employer. In the event the employer still wishes to enforce the contractual retirement age, it must provide a reasoned written reply and objectively and reasonably justify the retirement age by a legitimate aim (e.g. specific health and safety requirements for certain roles). Employers should take the opportunity to review and update their template employment contracts and policies around retirement generally, having regard to the new legislation.

Ongoing impact of EU and technology-focused regulation

The EU Artificial Intelligence Act (EU AI Act) introduces stringent requirements for employers using AI in relation to hiring, performance management, promotion and termination decisions, designating certain HR AI systems as high-risk with effect from August 2026.

For high risk systems, employers will need to ensure robust human oversight of decisions, ensure they document how and why the system is used, maintain logs and transparency records and notify employees where appropriate.

The EU AI Act also introduces a positive obligation on organisations to ensure an adequate level of "AI literacy" to ensure that staff and managers using or relying on AI systems understand what the tool does and how it works, any potential risks, and the responsibility to supervise and apply human judgement. This is especially important in employment decisions affecting recruitment, promotion, disciplinary action and dismissal.

Revenue disclosure opportunity until 30 January 2026

Revenue is giving employers an opportunity to correct payroll issues arising in 2024 and 2025, without penalty, due to a bone-fide misclassification of workers being self employed, where they ought to have been treated as employees. Where the employer engages with Revenue on the issue prior to 30 January 2026, they will be permitted to enter into settlement terms in respect of any payroll tax issue without incurring a penalty.

Where a worker has been misclassified as a contractor, one of the main issues that tends to arise is a failure by the employer to deduct and remit the required income tax, USC and PRSI on the worker's behalf.

Businesses who engage independent contractors are advised to review the existing arrangements in place, in light of recent case law (the Karshan decision¹) on how to determine whether a worker is an employee or a contractor and take appropriate steps to address and rectify the position, where appropriate.

Conclusion

2026 promises to be an interesting year for employment law in Ireland. With reforms in respect of pensions, pay transparency, minimum standards, retirement rights and collective bargaining, employers should act now to align policies, update systems and ensure compliance.

Keeping pace with these changes will be essential not only for legal compliance but also for creating workplaces that are fair, transparent and resilient in a rapidly evolving labour market.

Footnotes

1 Revenue Commissioners v Karshan (Midlands) Ltd t/a Dominos Pizza [2023] IESC 24

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.