Due to the expansion of farms, taking on employees is a concept that is becoming increasingly more common. However, attracting and retaining employees can be difficult, particularly for first-time employers. Salaries in the agri-food sector tend to be low, and conditions of employment are not always as good as they should be. When hiring, it is important that the relationship is professional and complies with relevant employment legislation and Revenue regulations.
Hiring the Right Person
Selecting the right person at the outset helps avoid future problems. When hiring, the first and most important step is to list the tasks and duties you want your employee to undertake. If you are concerned about not having enough work for an employee, it may be worth investigating whether you could share an employee with another farmer.
Being clear about what you expect from the role will help you to choose the right person. When interviewing potential
candidates, check if they have relevant training and are willing to undertake future training if required. Look for evidence of certificates and references.
It is essential to formalise the Employer/Employee relationship. It is unwise to treat employees in the informal manner that sometimes applies where family members help out on the farm.
78% of survey respondents do not employ outside labour on the farm.
21% of those who employ staff, only 21% have formal employment contracts in place.
23% record annual leave and bank holidays.
65% provide payslips.
Employers and the Law
Over forty pieces of legislation govern the employment relationship. Our findings on employment practices in this year’s survey are worrying as farmers who fail to comply with their obligations can incur fines and/or face legal issues.
The main advantage of having a contract of employment is the clarity it brings when terms are agreed between the employer and the employee. Each party is clearer about the expectations of the other, providing a level of certainty in the relationship.
As this area has become much more complex and compliance- driven, many Employers outsource the HR and/or Payroll to organisations such as ifac. Outsourcing allows access to specialised expertise such as employment law, giving clients reassurance allowing them to focus on their core business.
At ifac, we discourage the practice of entering into net pay agreements with employees as it is almost impossible to quantify the overall cost to the Employer at the onset. A net pay agreement is where a farmer agrees to pay the employee an amount ‘into the hand’. Such an arrangement requires the ‘grossing up of pay’ to consider the tax, PRSI and USC liabilities, and in some cases, even the local property taxes.
The amount of tax and USC due is dependent on the employee’s allowances, tax credits and USC thresholds. This can vary greatly from one employee to another.
It is imperative that employers request an employee’s PPS Number as soon as possible, preferably before the commencement of employment.
Many farmers need help when it comes to hiring, managing and paying their employees. Comprehensive HR and payroll support is available through your local ifac office.