Tánaiste Leo Varadkar has received government approval to accept the Low Wage Commission’s recommendation to increase the national minimum wage to €11.30 per hour from 1 January 2023.
This represents an increase of 80 cents, or 7.6 percent, on the current national minimum wage of €10.50 an hour and will result in at least 164,700 people receiving a pay rise.
For those earning the national minimum wage who work a 39-hour week, this means a pay increase of €31.20 per week or more than €120 per month or €1,600 per year.
Mr Varadkar also revealed that the Low Pay Commission has set an indicative national living wage for 2023 of €13.10 per hour.
The intention is to phase in the living wage by 2026, when it becomes mandatory.
In the meantime, it is revised annually as a benchmark for employers.
He also announced that he will enact the Sick Leave Act on January 1, 2023. This law will, for the first time, introduce an entitlement for all employees to employer-paid sick leave in addition to state sick pay.
Announcing the increase in the minimum wage today, Mr Varadkar said: “We want to reward work and make work pay more. Minimum wage workers are some of the hardest working people in Ireland and deserve to be paid more, especially at a time of rising prices.
“Therefore, the government has agreed to accept the Low Wage Commission’s recommendation to increase the national minimum wage by 80 cents to €11.30 from January 1st. It is estimated that at least 164,700 people and possibly more will be eligible for this increase, with many others at slightly higher pay levels also receiving a nudge increase.
The increase in the national minimum wage also means that those working under certain conditions, under the age of 18, 19 and 20, will receive corresponding wage increases as they are entitled to a percentage of the full minimum wage rate. The Tánaiste has asked the Low Pay Commission to review youth tariffs and make recommendations on the subject next year.
Following today’s announcement, the initial entitlement to statutory sick leave from the employer is up to three days of medically certified leave per year.
The regulations state that this will be capped at 70 percent of gross wages, with a daily maximum of 110 euros. Sickness benefit is granted by the Department of Social Protection from the 4th day and for up to two years.
Earlier, the government had been asked to halt the proposed 80 cent hike in the national minimum wage, which was due to be approved by the cabinet.
Sven Spollen-Behrens, managing director of the small business association, said the increase in the hourly rate from 10.50 euros to 11.30 euros from January 2020 “ignores the reality of small businesses”.
He called for maintaining the current wage rate and postponing the government’s plan to gradually introduce a new living wage instead of the minimum wage.
The Small Firms Association’s call comes as ISME warned that an increase in the minimum wage will result in shorter hours for workers.
“The costs for small business owners are higher than ever before,” said Mr. Spollen-Behrens.
“It is disappointing that the government is now complementing this with a further increase in the national minimum wage.
“An increase in the minimum wage would add to the existing significant cost pressures that small businesses face — energy, transportation, insurance, materials, technology, and operating costs in general are all increasing in price faster than small businesses can keep up.”
He said this is not the only increase in labor costs to be imposed on small businesses in the coming months.
Mr. Spollen-Behrens pointed out that a statutory sick pay system is to come into force in the last quarter of this year and an automatic pension savings system is to be set up next year.
Workers are to start registering for the pension system in 2024.
He said labor costs are the most significant driver of doing business in small businesses, accounting for 82 percent of total monthly expenses.
“These cumulative impacts are of great concern to Ireland’s small businesses,” he said.
“Ireland cannot allow its competitiveness to be undermined by government-imposed costs,” he said. “The energy crisis makes it all the more important to control the costs that are within our domestic control. The 2023 budget must provide security and maintain competitiveness.”
He said the government must ensure comprehensive help for small businesses to deal with the energy crisis by ensuring that policy decisions do not exclude the smallest employers.
Meanwhile, ISME chief executive Neil McDonnell previously said raising the minimum wage was not a solution to a cost-of-living crisis.
He said it’s understandable that people facing tremendous cost-of-living pressures will look to their wage packages to help plug the gap from inflation.
“Employers will not be able to fill that gap,” he told Newstalk.
Maeve McElwee, Ibec’s director of employer relations, said there was a lot of focus on employers’ ability to keep people in employment.
She said where companies can’t afford the increased labor costs, things get really tough.
Meanwhile, the General Secretary of the Irish Trades Union Congress, Patricia King, said the 80 cent increase was insufficient.
Speaking to Claire on RTÉ today, she said that while employers must rise to the energy challenge, so do workers.
She said minimum wage workers are not making a decent living and “cannot be sacrificed on the altar” by not getting the pay rises they need due to inflation.
Ms King said there are many employers who are able to pay the increase and they are already receiving various programs and subsidies from the government.
https://www.independent.ie/irish-news/news/tanaiste-leo-varadkar-announces-increase-in-the-national-minimum-wage-by-80c-with-164700-people-to-benefit-41988541.html Tánaiste Leo Varadkar announces an 80 cent increase in the national minimum wage that will benefit 164,700 people