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EOR and PEO in Ireland: the risks of operating without a licence

Under the Employment Agency Act 1971, employment agencies in Ireland must hold a licence to carry out their business. And if you’re a PEO (Professional Employer Organisation) or an EOR (Employer of Record) you’re probably considered to be an employment agency.


Here’s why:

An employment agency is a business that recruits and/or employs individuals to be assigned to third parties under their supervision and direction – i.e. agency workers. This includes individuals on temporary and permanent contracts.


So, an agency worker is:

· contractually employed by an employment agency

· assigned to work for another organisation under their supervision and direction on either a temporary or a permanent contract


An agency worker is not:

· an independent contractor

· an employee from a managed service company where the business is responsible for managing and delivering the service (for example, a cleaning company)

· a worker on the Workplace Experience Programme, Community Employment, TÚS or any Department of Social Protection vocational training or re-training scheme


So, what happens if an employment agency in Ireland operates without a licence?

The initial penalty is a Class C fine not exceeding €2,500. If the offence is ongoing, that can rise to a further Class D fine not exceeding €1,000 a day. As these are considered to be criminal offences, there is also a risk that the business can be forced to shut down.


And…


Where an offence is proved to have been committed with the consent, approval or facilitated by wilful neglect of any director, manager, or secretary, they can be considered personally responsible and fined for breaking the law.


In order to ensure compliance, authorities may enter and inspect your premises, inspect your books and records, and require you to provide information to prove that you are operating legally.


Our advice? Stay on the right side of the law!

At PEO Legal, we provide legal and compliance advice for professional employer organisations and staffing companies around the world. For support getting your employment agency licence, or with any other point of cross-border employment law, get in touch today.

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