Under the euro changeover, from January 1st, employers must quote all wages, commission, bonuses, etc in the new currency and notify their employees of what this is. Due to the conversion rate (1 euro = £0.787564), it will be necessary to round the calculations.

Although the legislation provides that the rounding off must be done in favour of clients and customers, it does not give any precise guidelines for employees. However, the Payment of Wages Act, 1991 provides that no deduction can be made from an employee's wages without the employee's express prior written consent. It would therefore appear that an employer would be required to round up rather than round down.

It is important for all employees to ensure that the final conversion figure represents all salary and bonuses they were receiving at the time of the conversion. Where an employer fails to include the entire remuneration for an employee in doing the conversion, the employee will be entitled to seek a payment of up to twice the deduction or one week's gross wages, depending on the circumstances, under the 1991 Act. Statements accompanying pay slips should show the gross amount of pay and any deductions in euros.

To ensure the smooth running of your business, and to protect against employees making serious errors in dealing with the new currency, it is advisable that appropriate training and instruction be provided. While this may seem over-elaborate, it is for the employer to decide what training is appropriate in the context of the currency changeover. It would be very difficult for an employer to take disciplinary action against an employee for repeated errors with conversion, if appropriate training has not been provided.

Ensuring price lists, charge-out rates and agreed fixed prices carry their euro equivalent may require amendment to both accounting systems and marketing or advertising material. Employees should therefore be advised as to what their new charge-out rate is in order to ensure that over-billing or under-billing does not occur. Again, employees may not be lawfully disciplined for failures that they have not been properly notified of, or trained to deal with.

Certain employment protection legislation provides for statutory payments in certain circumstances; for example, the minimum wage and statutory redundancy payments. These figures will also have to be converted and rounded up so as to be quoted in euro. Since July, the national minimum wage rate has been £4.70, and from January 1st next this will be quoted as €5.97. Similarly, the statutory ceiling for the calculation of redundancy payments under the Redundancy Payments Acts 1967-1991, which is currently £400 per week or £20,800 per year, will be quoted as €508 per week or €26,411per year.

While the changeover date is January 1st, employers who pay staff by way of cash payment or cheque may continue to pay in Irish pounds up to February 9th next. As of this date, however, the pound will no longer be Irish legal tender. Similarly, any cheque drawn in pounds after this date will be returned marked "out of date". It is therefore important for employers who are currently paying by cash or cheque to advise their employees and ensure that they will begin paying in euro by February 9th next at the latest.

It has been possible for employers to conduct tax matters relating to their employees in euro since January 1st, 1999. However, most employers chose not to do so. For these employers, payroll systems for the short tax "year" (April 6th, 2001 to December 31st, 2001) have been operated in punts and employers will have completed their P35 returns in punts with any P35 balancing payments in euro.

The monthly P30 return form for December 2001, to be filed by January 14th, 2002, must be in euro. Employers can calculate December 2001 PAYE/PRSI liability in pounds, but must convert these amounts to euro. From January 1st next, all P30 and P35 returns will be expressed in euro and must be completed in the new currency. The Revenue will issue employee certificates of tax credits and or tax deduction cards in euro to employers before January 1st, 2002.

Bryan Dunne is a solicitor in the Employment and Equality Law Department of Matheson Ormsby Prentice