Three major employment developments are on the horizon for 2026. Employers should be preparing now for the introduction of the EU Pay Transparency Directive, the Employment (Contractual Retirement Ages) Act 2025, and the EU Platform Workers Directive. Each of these reforms brings significant new obligations, requiring employers to review and adapt their existing policies, procedures, and systems.

1.    Pay Transparency: EU Directive 2023/970
The EU Pay Transparency Directive (2023/970), adopted in 2023, must be transposed into Irish law by 7 June 2026. This Directive introduces a robust framework to enhance pay transparency and address gender pay gaps within the workplace. The Irish Government has not yet published draft legislation, so it is still difficult for employers to understand the impact of the changes in the absence of any guidance. However, employers must try to prepare for June as best they can. 

Key Requirements:

• Employers must disclose the initial pay level and pay progression criteria for job vacancies early in the recruitment process. This includes specifying starting salaries or salary ranges in job advertisements and ensuring pay criteria are accessible and transparent.
• Employers will be prohibited from asking job applicants about their salary history.
• Employees will have the right to request information on their individual pay level and the average pay levels, broken down by gender, for workers performing the same or equivalent work.
• Employers will need to categorise employees using a neutral job evaluation model, assessing roles based on objective criteria such as knowledge, skills, and responsibilities, while avoiding stereotypical assumptions.
• Pay data analysis must cover all elements of remuneration, including discretionary payments and benefits, not just basic pay.

Reporting Obligations:

• Larger employers will be subject to detailed annual reporting on gender pay gaps, covering both mean and median gaps for base and variable pay, the proportion of male and female employees receiving variable pay, and gender distribution across pay quartiles.
• Employers with over 250 employees will be required to report annually by June 2027, with phased deadlines for mid-sized employers.
• Where reporting reveals unexplained gender pay gaps exceeding 5%, employers must conduct a joint pay assessment with worker representatives and take corrective action where unjustified disparities exist.
  Preparation Steps:
• Employers should review current pay practices to ensure all pay differences are justified by objective criteria and properly documented.
• Establish transparent pay practices, ensuring job descriptions accurately reflect actual duties and that pay criteria are consistently applied and accessible.
• Adapt recruitment practices to comply with the new requirements, including the prohibition on seeking salary history and the obligation to disclose pay information.
• Prepare HR and payroll systems for enhanced data collection and reporting.
• Educate managers and staff about their rights and obligations under the Directive.
• Monitor legislative developments and be ready to adjust policies as further guidance emerges.
   

2.    The Employment (Contractual Retirement Ages) Act 2025
Signed into law on 16 December 2025 and awaiting commencement, the Employment (Contractual Retirement Ages) Act 2025 represents a significant shift in how retirement is managed in Ireland. The Act introduces a consent-based model for contractual retirement ages set below the State pension age (currently 66), except where a maximum retirement age or service length is mandated by law or where an employee is still on probation. While the Act has not yet been enforced, employers should still be aware of the impact of the changes when dealing with employees nearing retirement age.

Key Provisions:

• Employees who do not wish to retire at the contractual retirement age can formally notify their employer between three months and one year before reaching that age.
• Upon notification, the employer cannot enforce the contractual retirement age and must respond in writing within one month, providing reasons why continued employment cannot be accommodated. The employer must demonstrate that any refusal is based on a legitimate aim, and that the aim is both appropriate and necessary.
• This marks a departure from the previous regime, where contractual retirement ages were generally enforceable if included in the contract. Now, employers must justify and document retirement decisions transparently.
• If an employee disputes the employer’s response, they may bring a claim to the Workplace Relations Commission. Remedies include reinstatement, re-engagement, or compensation of up to two years’ remuneration or €40,000 (whichever is greater).
• Employers are prohibited from penalising or threatening employees for submitting a notification.
• Failure to provide a response is an offence, subject to a Class A fine (up to €5,000), imprisonment, or both. This liability extends to individuals involved in the decision-making process, and the Workplace Relations Commission is responsible for prosecutions.

Preparation Steps:

• Review and update contracts and retirement policies to ensure that any sub-pension age retirement is justifiable.
• Establish clear internal procedures for responding to employee notifications, including timelines and requirements for providing reasoned responses.
• Train HR staff and managers to apply the new framework consistently and to understand both organisational and personal liabilities.

3.    The EU Platform Workers Directive 2024/2831
The EU Platform Workers Directive (2024/2831), adopted in October 2024, must be transposed by 2 December 2026. It seeks to clarify the employment status of platform workers, enhance transparency, and ensure protections in cross-border situations. The issue of clarifying the employment status for employees and self-employed individuals in Ireland has been topical in recent years due to Supreme Court decisions and guidance from bodies such as the Revenue Commissioners and the Workplace Relations Commission. This new Directive goes further by focusing on workers who obtain work through platforms such as food delivery apps or taxi apps.

Scope and Key Features:

• Platform work is defined as work organised, allocated, or managed via a digital labour platform—such as websites or mobile apps —where tasks are performed for payment at the request of a customer. The Directive applies regardless of whether the worker is formally classified as an employee or self-employed, as long as there is a contractual arrangement facilitated by the platform.
• The Directive covers situations involving intermediaries and applies to any ‘digital labour platform’ operating within the EU, regardless of where it is established, provided the work is performed in the EU.
• A central focus is “algorithm accountability”: platforms must ensure transparency and fairness in how automated systems assign tasks, monitor work, and process payments. Human oversight and data impact assessments will be required.
• A key change to be aware of is that the Directive introduces a rebuttable presumption of employment where the platform exercises direction or control over the work, potentially shifting the burden onto platforms to prove genuine self-employment. This means that if the platform provides instructions in relation to jobs or exercises control over individuals working through it then under the Directive there will be an assumption that the individual is an employee and not an independent contractor. If an issue arises as to the status of this individual it will be for the platform to prove that the individual is not an employee. This is a huge change for platforms working in Ireland and follows recent case law on the issue pf employment status. Employers should ensure they are familiar with the current test under Irish law in this regard.

Preparation Steps:
•    Assess whether any aspect of the organisation constitutes “platform work” under the Directive.
•    Review how platform work is managed, including the use of automated systems and data processing.
•    Monitor legislative developments and prepare to adapt practices as the transposition deadline approaches.