Ireland Update: Beware Bogus Self-Employment

Misclassification of workers engaged by a company as “independent contracts” rather than “employees” can be a very costly mistake for businesses. In the event of an audit by the Revenue Commissioners, if it is considered that the true nature of the relationship between the individuals engaged and the business is an employment relationship, then the company engaging the individuals will be held liable to account as employer for PAYE, PRSI (including employer’s PRSI (currently, 8.8% or 11.05% depending on annual earnings levels)) and USC, as applicable. In addition, Irish employment legislation will automatically imply a host of employment rights and employer obligations into the relationship. Some of these obligations, for instance payment for annual leave accrued, public holidays and statutory redundancy payments, carry a further potential liability.


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