For the second year in a row, employees in the construction industry are due to receive a pay increase this summer.
From 1 August 2026, the second phase of the Sectoral Employment Order (Construction Sector) 2024 will come into effect, granting those working in the construction sector with increased hourly rates of pay and improved pension contributions.
Employers need to prepare for the implications these changes will have on payroll, employee contracts, and other HR documentation.
What is the Sectoral Employment Order (Construction Sector) 2024?
The Sectoral Employment Order (Construction Sector) 2024 sets out minimum rates of pay and other conditions, such as sick pay and pension entitlements, for those employed in the construction sector.
This order outlined pay rate increases for both August 2025 and August 2026, aiming to enhance the appeal of the construction sector to potential workers. This initiative is expected to positively influence housing and infrastructure development across Ireland.
Last year, eligible workers received a 3.4% increase in their minimum hourly wage. In August 2026, construction workers will receive an additional 3.2% increase. Employees will also receive increased pension contributions.
The order categorises workers into different groups, such as Category A (scaffolders with four or more years of experience) and craftspeople (including bricklayers, carpenters, and painters). The minimum rates of pay will vary based on these categories.
Understanding Sectoral Employment Orders
A Sectoral Employment Order (SEO) is a legally enforceable order that mandates employers in specific sectors to provide their employees with defined minimum pay rates, sick pay entitlements, or pension contributions. Typically, a trade union or employer organisation initiates the request, prompting the Labour Court to examine the employment conditions within that sector. The Court assesses remuneration, sick pay, and pension provisions before recommending the establishment of an SEO for the industry.
What should employers do next?
Once this update is in place, business owners in the construction industry should ensure that all relevant changes are reflected in the company’s HR documentation and in their employees’ pay packets.
Given that each category of worker will now receive a different minimum rate of pay, it’s important to conduct a full payroll audit to ensure that everything is in order and that these changes are depicted accurately within all relevant HR documentation.
Need help with navigating pay increases?
For more information, or for hands-on assisstance with amending your HR documentation to comply with the Sectoral Employment Order (Construction Sector) 2024, you can contact Peninsula on your dedicated HR advice line.
If you are not a Peninsula client yet, call us on 1800 719 216 for a complimentary HR consultation.
