The Labour Market Needs Test – what has changed? 

The Labour Market Needs Test is one of several criteria to be satisfied before an application can be made for a General Employment Permit or a Contract for Services Employment Permit. The 2024 Act removes the requirement for employers to place adverts for vacancies in print media. Instead, in advance of applying for such permits, the employer must place the adverts with the Department of Social Protection/EURES Employment Network (i.e. JobsIreland.ie) and an additional online platform for a minimum of 28 continuous days. The online platform can be any website, software or electronic technology that provides online publication of information, with the principal purpose being to publish offers of employment.

The information required to be included in the adverts has not changed.

However, no transitional arrangements have been announced for those who may already be in the process of satisfying the previous iteration of the Labour Market Needs Test and so it remains unclear whether applications submitted from 2 September 2024 will be accepted if they complied with that test. We will watch this space and let you know as we find out more. 

While many may have preferred the abolition of the Labour Market Needs Test entirely, removing the requirement to advertise a job vacancy in a national newspaper (an unfamiliar exercise for a modern workforce) is certainly welcome and makes the overall recruitment process less burdensome for employers – it is quite a straightforward step to include in any recruitment process the advertisement of future vacancies with the Department of Social Protection/EURES Employment Network and another online platform in order to satisfy the new test in the event the preferred candidate requires an employment permit.

What is the impact on subcontractor and agency arrangements? 

The modern workplace provides for a wide array of contractual arrangements beyond the usual employer and employee relationship. The 2024 Act recognises this and has expanded access to the employment permit system to employment agencies and subcontractors. 

Employment Agencies

Previously, employment agencies were strictly prohibited from being able to obtain employment permits for their agency workers. The new system will now allow for employment permits to be issued in situations where the salary of an employment permit holder is being paid by an entity other that the employer. This allows employment agencies to be listed as the employer of the employment permit holder, even when the individual will be carrying out work for a client of that employment agency and potentially be paid by that client. 

Traditional employment agencies will welcome this change as will “employers of record” which are a relatively new mechanism in Ireland.

Subcontractors

The 2024 Act will now also allow for subcontracting entities to have access to the employment permits system in the same manner as a main contractor. 

This is a welcome development for businesses, particularly those operating in the construction, telecommunications and civil engineering industries where it is increasingly challenging to find the necessary labour and which are dependent on subcontractors to assist with completing projects and satisfying contracts. Enabling subcontractors to avail of such permits will certainly help this sector. 

Improvements in efficiency and administration of employment permit system 

The primary aim of the 2024 Act is to improve efficiency in the employment permit system and, to achieve this, a number of changes are being introduced to simplify its administration including: 

a. Changing Employer 

Employment permit holders will now be able to change their employer to another employer after a period of nine months. Previously, there was an expectation that an employment permit holder would first need to complete 12 months employment with their current employer on an employment permit before they could seek to move employer. 

If they sought to move employer within that 12-month period, there would be grounds to refuse their subsequent employment permit application. The application of this rule could be waived in certain circumstances (for example, if the employee was made redundant or if the previous employer made a request). As a matter of general practice, the operation of the 12-month rule was widely considered not to be in the best interests of employment permit holders, especially those who were subject to adverse treatment in their workplace and felt they could not move for fear of not being able to obtain a new employment permit. 

There will also be discretion to grant a new permit prior to the nine-month period in cases evidencing a change of circumstances or instances of exploitation.

In addition to the above changes and specific to General Employment Permit and Critical Skills Employment Permit holders, the requirement to apply for a new employment permit has also been removed but only if the employment permit holder is moving within the same occupational classification as their existing employment permit:

(a) For General Employment Permit Holders, this means they won’t need to apply for an employment permit if they are changing to an employer within the same type of employment for which their employment permit was granted e.g. a lineworker can move to another lineworker role. 

(b) For Critical Skills Employment Permit Holders, they will be able to change employer across a broader category of employments e.g. a civil engineer may move into a different type of engineering role

Employment permit holders will be restricted to a maximum of three change of employer applications and certain requirements will need to be satisfied with each application. However, unlike new employment permit applications, it will not be necessary to satisfy the Labour Market Needs Test prior to each change of employer application. That will be welcome news to some employers and employees, but it is perhaps a curious decision. It is possible this will result in some employers actively poaching employees who have been working on an employment permit for at least nine months with competitors and who they can then employ without needing to satisfy a Labour Market Needs Test. 

b. Progression and Promotion

While not always required, where there was a material change to an employment permit holder’s terms and conditions of employment, such as a promotion, uplift in salary, change in employment location or change in role, then the Department could require the permit holder to undergo an entirely new employment permit application process.

The 2024 Act aims to improve the status and employment opportunities of employment permit holders and reduce accidental non-compliance with employment permits legislation by removing this requirement if the employment permit holder is promoted, receives an uplift in salary or is subject to an internal transfer within the employing company provided the permit holder will be using the same skills and the employment remains eligible for an employment permit. 

c. Indexation

Provision has been made to ensure remuneration thresholds for employment permits remain in line with average wage growth and to prevent future stagnation in these thresholds. Under the 2024 Act, the Minister can carry out a yearly review of the remuneration thresholds for employment permits using average wage growth calculated by the CSO. The intention of indexation is to increase the attractiveness of Ireland as a work destination and to ensure employment permit holders will continue to be able to afford to live in Ireland. However, it may have the opposite effect on employers who might experience remuneration increases as prohibitive to accessing a wider labour market. 

Also, at the beginning of 2024, increases to minimum remuneration thresholds for employment permits were announced with further increases proposed to be introduced on an incremental basis over the next few years. It will be interesting to see if the proposed increases to the minimum remuneration thresholds for employment permits will be implemented in early 2025 in light of this new indexation provision. 

d. Automatic Cancellation of Employment Permits

The Department does not allow an individual to hold more than one employment permit at any one time. This frequently caused logistical headaches for those applying for employment permits as they would need to cancel an existing and valid employment permit to allow for the grant of a new employment permit; often leaving an employment permit holder in right to work limbo. 

To address this, upon grant of an employment permit, the Minister will automatically cancel any other employment permit which is valid for that employment permit holder and will notify the employer identified on the employment permit.

e. Amending Employment Permit Applications

In an effort to eliminate, or at least reduce, the need to re-submit entirely new employment permit applications, the new Act gives the Minister the power to make an amendment to an application in certain circumstances. 

f. New six-month rule 

The 2024 Act requires employment permit holders to commence employment within a period of six months from when the employment is granted or comes into force. Previously, there was no cutoff date. This is aimed at ensuring permits are utilised promptly and to reduce delays in filling labour shortages. 

Seasonal Employment Permits 

While it has been widely anticipated, we will have to wait until 2025 for the introduction of the new Seasonal Employment Permit. 

The Seasonal Employment Permit will be a short-term employment permit allowing non-EEA nationals to work for a maximum of seven months per calendar year in a seasonally recurrent employment. This is designed to support specific economic sectors such as horticulture and agriculture in addressing labour market shortages. 

To acquire a Seasonal Employment Permit, the employer will need to be pre-register as a seasonal employer and will be issued with a certificate to confirm its status. This certificate will need to be renewed every 12 months, but it will also be transferable. Appropriate arrangements for accommodation and health insurance will also need to be made by the pre-approved seasonable employer. 

A pilot scheme for this new permit will be launched in 2025 and we await further information on this once the detail of the new scheme is published. 

Conclusion

The 2024 Act introduces significant changes to the employment permits system, making it more flexible, user-friendly, and above all, responsive to changing labour market needs. Employers should familiarise themselves with the changes, not only to ensure compliance, but also to take full advantage of the new opportunities being introduced.
For further information or support in relation to the changes to the employment permits system, or immigration law generally, please contact Declan Groarke.