Cut Employer PRSI, RGDATA & Local Jobs Alliance tell Government

Cut Employer PRSI to support SME businesses to deal with high cost Government initiatives: RGDATA & Local Jobs Alliance

Finance Minister Michael McGrath has said the Local Jobs Alliance submission will be considered in the Budget deliberations, WHEN RGDATA Director General Tara Buckley raiSed this issue at the Retail Forum.

In their joint submission to Trade Minister Simon Coveney RGDATA and the Local Jobs Alliance revealed that new statutory obligations hikes the cost of each and every employee by as much as 17%.

“A range of new statutory employment obligations introduced by the State, our collective membership is facing a significant increase in employment costs which many will not be able to address without significant State support or intervention” they wrote.

“An analysis of the new State measures suggests that the range of new obligations will impose an additional annual average cost on employers of at least €4,200 per employee (17%). While this figure is calculated for employees on the National Minimum Wage, the costs and overall impact will be proportionately higher for employees being paid higher rates on the basis of relativities.”

The additional costs include:

• The proposed 12.4% increase in the National Minimum Wage (NMW) will increase the gross wage bill for an employee on the NMW by €3,154 per annum with similar relative rates of increase applying on higher rates of pay).
  • The St Brigid’s Day Bank Holiday introduced this year costs employers €110
  per employee on the NMW.
  • The contingent cost of five days statutory sick leave will be €550 per employee
  per annum.
  • Auto enrolment, when introduced, will cost an additional €386 per annum per
  employee.

“For some sectors, the increases also come at a time when they are facing higher VAT
rates while all businesses continue to face additional high costs for insurance, banking
and energy” RGDATA said.

“Unless some provision is made in Budget 2024 to support and assist SME businesses
to respond to these new State imposed costs, the implications for our collective
members will be extremely serious.

“While it is a matter for Government to come forward with specific measures to address the additional State imposed employment costs now facing businesses, the following measures, if structured appropriately could help offset the worst potential impacts of these changes:

• A 50% rebate/reduction on Employers PRSI – businesses are expected to shoulder
costs that were previously absorbed by the State. If businesses are expected to
bear these costs, a 50% rebate on Employers PRSI for 36 months for SMEs would
make a contribution to the additional costs incurred.
• A State contribution to businesses to cover additional costs – this could be done
through a direct payment to businesses (an Employment Solidarity Payment) or an
agreed offset in respect of PAYE collected by an employer to an amount
determined to make a realistic contribution to the increased employment costs.