Level 5 – What an Employer needs to know

20 October 2020

The Irish Government announced last night that level 5 restrictions will come into place for the whole of the Republic of Ireland from midnight on Wednesday 21 October 2020. The restrictions are planned to remain in place for 6 weeks.

These restrictions mean that only essential services and retailers can remain open from midnight on 21 October 2020. The Government has announced a list of ‘essential retailers’ and they encompass amongst other things, banks, laundries, retailers who sell food, beverages, pharmacies, retailers selling health, medical or orthopaedic goods or similar items for animals and pets, retailers selling goods for the essential upkeep of homes or businesses, fuel services and hardware stores.

The Government had introduced a Temporary Wage Subsidiary Scheme (TWSS) in March 2020. The TWSS came to an end on 31 August 2020 and was replaced by a new scheme, the Employment Wage Subsidiary Scheme (EWSS).

The EWSS is still in force and it differs to the old TWSS in its operation.

The EWSS provides that businesses who have been impacted by Covid-19 and who have suffered a decrease of 30% in turnover (or orders) can apply to the Revenue Commissioners to avail of the EWSS. Businesses must also have a valid tax certificate to be eligible.

The EWSS is available to employers who keep their staff on the pay roll during the Pandemic. Staff can be on reduced hours or on temporary lay off so long as they remain on the books and in employment.

If eligible these business will receive a flat rate subsidy per week towards qualifying employees who are on their pay roll. This means that employers will receive a specific subsidy/payment to assist in paying employees wages during the Pandemic and the rate payable will be based on the gross weekly salary of the employee.

As of midnight on 21 October 2020 the subsidiary rates payable under the EWSS are:

  • €203.00 for an employee who earns more than €151.00 per week and less than €203.00 per week
  • €250.00 for an employee who earns more than €203.00 per week and less than €300.00 per week
  • €300.00 for an employee who earns more than €300.00 per week and less than €400.00 per week
  • €350.00 for an employee who earns more than €400.00 per week and less than €1,462.00 per week

No subsidy is paid for employees who are paid less than €151.50 or more than €1,462 gross per week.

However unlike the TWSS the new EWSS is a subsidy scheme which means that the employers will receive a backdated subsidy in relation to eligible employees rather than have Revenue contribute towards the weekly wages of employees. Employers are also required to resume payment of PAYE if availing of the EWSS. Businesses will need to apply to Revenue to participate in the EWSS. Employers also need to complete a monthly review to ensure the business remains eligible for EWSS.

For further information please contact Maura Connolly, Partner and Head of Employment & Employee Benefits, Kate Field, Associate or another member of the Employment & Employee Benefits Team at Eugene F Collins.

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