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.
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.
Owen Reidy, Secretary General of the Irish Congress of Trade Unions, welcomed the introduction of pension auto-enrolment.
"I would say to employees who have concerns about it - this is the best way to get an increase from your employer and from the State for essentially what is deferred pay, which is what pensions are," Mr Reidy said.
"It's a good thing all around, we would hope that employees will stick with it," he added.
Workers who are auto-enrolled can opt out of the scheme after six months.
Adrian Cummins, CEO of the Restaurants Association of Ireland, said that pension auto-enrolment "will add an extra percentage on to wage inflation" for that sector.
"We're a high cost industry, so that means our margins are being eroded every day," Mr Cummins said.
"We acknowledge that there is a pensions time bomb in the country," he said, but added: "I think the Government needs to say out publicly, this is a cost to business, we acknowledge that and we need to have negotiations with the industry in terms of how we alleviate that cost into the future."
The Minister for Social Protection has said that around 90% of employers with employees eligible for pension auto-enrolment have registered with the scheme since registrations went live on 1 December.
"We've 85,000 employers are registered with over 675,000 employees," Dara Callearly said. "That's about 90%."
"I think there's huge support and huge buy-in to it on the ground" he told RTÉ's News at One programme.
The minister confirmed that employers who do not engage with the National Automatic Enrolment Retirement Savings Authority will face fines.
However he said that the scheme was "not a burden at all" despite the fact that it is being introduced alongside a rise in the minimum wage.
An increase of €0.65 in the minimum wage is also taking effect today, bringing the hourly rate to €14.15.
"It's an investment in their staff, the people that make their businesses happen," Mr Calleary said.
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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.
Mr 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.
Additional reporting: Laura Fletcher
