The so-called “50:50 Rule” is a fundamental administrative criterion within Ireland’s employment permit regime. It is enforced by the Department of Enterprise, Trade and Employment (DETE) as a measure to ensure a balanced workforce composition between nationals of the European Economic Area (EEA), European Union, and Switzerland, and third-country nationals employed in the State.
Legal and Administrative Basis
According to DETE:
“DETE does not issue employment permits for jobs in businesses where at the time of application more than 50% of workers are from outside the EEA. This is called the ‘50:50’ rule.”
In practice, this means an application for an employment permit will be refused where, at the time of submission, more than half of the workforce based in Ireland are non-EEA nationals.
This requirement applies equally to large corporations and small enterprises and focuses exclusively on employees physically located in Ireland, regardless of global staffing or multinational structure.
Specified Exceptions
There are specific, limited exceptions to the 50:50 Rule, which allow employment permits to be granted despite non-compliance with the general threshold:
1. Newly Established Companies (Relevant Only for General Employment Permits – GEP)
Where an employer has been registered with the Revenue Commissioners for less than two years as an employer, the 50:50 Rule does not apply, provided that:
- The company is a client of Enterprise Ireland or IDA Ireland; and
- A letter of support is submitted by either of these agencies.
This exemption is designed to encourage foreign direct investment and support early-stage companies, particularly in export-driven or innovation sectors.
2. Employment Permits Issued Before 1 October 2014
The 50:50 Rule does not apply to employment permits granted prior to 1 October 2014. Renewals or modifications of such permits are exempt from the current ratio requirements.
3. Single-Employee Companies
Where the applicant will be the only employee of the business in Ireland at the time of application, the 50:50 Rule is not triggered.
Upcoming Change Effective from 2 September 2024:
This exemption has been revised. As of 2 September 2024:
- The first application for an employment permit by an employer with no existing employees will remain exempt;
- However, when a second application is submitted for the same employer, the 50:50 Rule will automatically apply;
- In other words, from the second application onwards, the employer must ensure that at least half of the workforce in Ireland consists of EEA/Swiss nationals.
This development will significantly impact start-ups and sole traders, necessitating a proactive workforce planning strategy.
4. Contract for Services Arrangements
Where a non-EEA contractor or sub-contractor is engaged through a contract for services, compliance with the 50:50 Rule may be demonstrated by:
- The client company;
- The contractor; or
- A relevant subcontractor.
This exception recognises the fact that international contractors may not yet have a majority-EEA workforce, particularly in highly specialised technical sectors.
If you have any queries about employment permits in Ireland, please feel free to contact our team at info@mcgrathmullan.ie
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