Two major changes to employment law, pension auto-enrolment and a rise in the minimum wage, come into effect from today.

Pension auto-enrolment is designed to help more than 760,000 workers to begin saving for their retirement.

All employees not already in an occupational pension scheme, aged between 23 and 60 and earning over €20,000 across all of their employments, will be automatically enrolled in the new scheme from today.

It will be gradually phased in over a decade, with both employer and employee contributions starting at 1.5% and increasing every three years by 1.5% until they eventually reach 6% by year ten.

The State will top up contributions by €1 for every €3 saved by the employee.

The Department of Social Protection said the vast majority of employers with eligible staff, approximately 85,000, have registered their business details.

“There is no advantage to delaying registration as contributions will become due from the first payrolls of 2026 regardless of whether the employer has registered or not,” the department said.

Not registering results in an employer building up a legal debt and running the risk of being subjected to penalties, fines and prosecution.

Meanwhile, also taking effect today is an increase of €0.65 in the minimum wage bringing the hourly rate to €14.15.

Moira Grassick, Chief Operating Officer at HR firm Peninsula Ireland, said the changes will lead to big increases in payroll costs for some employers.

“There will be a strong overlap between the employers who are heavily impacted by auto-enrolment and those who are impacted by the increase to the minimum wage,” Ms Grassick said.

“Sectors such as hospitality and retail, for example, typically have a higher proportion of younger workers who earn the minimum wage and don’t receive a pension plan.

“Essentially, businesses with a younger and more transient employee demographic are the most likely to feel the impact of these coinciding legislative changes,” she added.

The Irish Congress of Trade Unions (ICTU) General Secretary Owen Reidy said that if the Government had not reneged on its commitment to reach a living wage on 1 January 2026, the minimum wage would be increasing by €0.95 to €14.45.

“Adding on another three-year wait for a living wage until January 2029, leaves over 200,000 of the lowest paid workers, who will have worked day and night to keep services running over Christmas week, up to €600 out of pocket in 2026 alone,” Mr Reidy said.