Sectoral Employment Order (SEO) Update for the Construction Industry

On 7 November 2024, Ireland’s construction sector received a notable regulatory update with the approval of a new Sectoral Employment Order (SEO) by the Minister of State for Business, Employment, and Retail. This new SEO, which supersedes the previous SEO of 2023, will take effect on 1 August 2025, which sets updated minimum pay rates, pension contributions, and sick pay entitlements for approximately 46,600 qualifying construction workers. 

What’s Changing from 1st August 2025 and again in 2026?

Planned increases from 1st August 2025 and again to increase 1st August 2026:

• Craftspersons: €23.00 per hour, increasing to €23.74 per hour
  
• Category A Workers: €22.32 per hour, increasing to €23.03 per hour.
  
• Category B Workers: €20.71 per hour, increasing to €21.37 per hour.
  
• Apprentices: Entitled to a percentage of the Craft rate,
  - Year 1: 33.33%
  - Year 2: 50%
  - Year 3: 75%
  - Year 4: 90%
  
  
  
• New entrants to Sector over 18: €16.74 per hour, increasing to €17.28 applicable for two years.

Effective 1st August 2025

Sick Pay Contributions

Total weekly contribution is increasing by €3, this will be split up by:

• Employers: €2.37 per week.
• Employees: €0.63 per week.

Effective 1st August 2025 and increasing 1st August 2026

Minimum Pension Contributions

• Employers: €31.87 weekly (€6.37 daily), increasing to €32.89 weekly in 2026 (€6.58 daily)
• Employees: €21.27 per week (€4.25 daily), increasing to €21.95 weekly in 2026 (€4.39 daily)

Key Takeaways

1. Enhanced Employee Benefits: Construction workers will benefit from a 3.4% minimum pay increase in August 2025, followed by an additional 3.2% in 2026. Improved pension contributions and sick pay entitlements further enhance employee benefits.

2. Boosting Sector Appeal: The new SEO is designed to make construction a more attractive career choice, particularly for apprentices, in response to Ireland's growing demand for skilled workers in housing and infrastructure development.

3. Managing Commercial and Legal Risks: Mandatory wage increases could affect contract values. Contractors should carefully review terms, especially those including fluctuation or legislative variation clauses. Clients should assess where financial risks may arise amid escalating costs for materials, energy, and labour.

4. Financial and Compliance Preparation: Construction firms need to update budgets, revise employment contracts, and adjust project bids to align with the SEO standards, ensuring compliance and mitigating financial exposure