Policy on employment agencies clarified

IMPACT – MEDIUM

What is the change? Irish labor authorities have clarified the definition of employment agencies and the distinction between agency staff and direct employees of a company for purposes of determining whether an agency qualifies as an employer and is thus eligible to apply for employment permits.

What does the change mean? If an employment contract provides for a foreign national to perform work or services for a person or entity other than the employment agency, the employment agency is not considered the employer and cannot apply for an employment permit for the worker.

• Implementation time frame: Ongoing.
• Visas/permits affected: Employment permits.
• Who is affected: Employment agencies and companies that contract with them to recruit and sponsor foreign workers.
• Impact on processing times: To avoid delay and requests for additional information, applicants should include a copy of the employment contract in the employment permit application to demonstrate that the worker is not under the direct supervision of another employer.
• Business impact: The policy clarifies that Irish authorities will look to an employment contract to determine whether the foreign national is a direct employee of the employment agency or an employee of a third party. Employment agencies may only apply for employment permits for their direct employees; however, this does not preclude them from applying for permits for workers who are placed at a client site as long as they remain directly employed by the agency (paid by the agency and under its direction and supervision).

Background: Employment agencies are governed by the Employment Agency Act 1971 and a registry of licensed employment agencies is maintained by the Workplace Relations Commission. The Department of Jobs, Enterprise and Innovation clarified its policy in response to queries about when an employment agency is considered an employer for purposes of applying for employment permits. While the Employment Permits Act does not preclude an employment agency from applying for employment permits per se, if a foreign national is under a contract to work for a third party, the employment agency is not considered the employer.

BAL Analysis: The policy announcement is a welcome clarification in a complex area for employment agencies that provide staff, recruitment and human resources services, and the companies that use them.

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.

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