Minimum wage – deep divisions over proposed 30c increase
On 18 July, the Low Pay Commission published its yearly report on the National Minimum Wage, which included a number of recommendations to Government:
- The rate of the National Minimum Wage for an experienced adult worker should increase by 30c to €9.55 per hour
- Employers’ PRSI should be amended to remove the anomaly created by the sudden increase in the rate of employers’ PRSI from 8.5% to 10.75% of weekly earnings of €376
- Provision should be made for the display of basic entitlements in all places of employment where the minimum wage is in operation
For the first time since the Commission’s establishment in 2015, the three members with an employer background did not support the recommendation on the minimum wage rate. In a minority report they stated that the proposed increase is “of such a magnitude as to be outside of our statutory brief” and “it is not an evidence based conclusion”.
In February 2017, the Small Firms Association made a written submission to the Low Pay Commission, urging the Commission to take account of the varied circumstances and prospects of small businesses and communities in Ireland. It stated that across-the-board pay increases are not appropriate at this time and there is no evidence basis for a change in the minimum wage. Reacting to the publication of the Low Pay Commission’s report, the SFA issued a statement to the press, outlining why an increase in the minimum wage would act as a barrier to job creation. The print, broadcast and online coverage of the SFA’s position is summarised in the media update section of this e-zine.
The final decision on the rate of the National Minimum Wage will be made by Cabinet and announced in Budget 2018 in October, with any change coming into effect on 1 January 2018. Given the warm welcome that the Taoiseach, Tánaiste and Minister Finian McGrath of the Independent Alliance gave to the recommendations at the launch of the report, it looks likely that the rate increase will be accepted by Government.
The SFA will continue to give voice to the small business perspective on this issue in advance of the formal announcement of the 2018 rate in Budget 2018. If you would like to share your views or the impact on your business, contact Linda Barry, Acting Director, on 01 605 1626 or email@example.com.