Low Pay Commission

Posted in : HR Updates ROI on 13 August 2015
Caroline Reidy
The HR Suite
Issues covered:

The National Minimum Wage (NMW) was first introduced in April 2000 at €5.59.

Caroline McEnery, Managing Director of the HR Suite was one of the 6 commissioners and a chair appointed to the Low Pay Commission by the government last March to examine the national minimum wage rate currently set at €8.65.

On an annual basis, this new body will advise Government on the appropriate rate for the National Minimum Wage.

Caroline was one of six commission members who backed the proposal to raise the rate by 50 cent in April 2016. In making the decision the commission considered the regional aspects and the cost of living in essentially a three tiered economy made up of Dublin, major cities like Cork and Limerick and then the rest of the country.

As a member of the low pay commission Caroline’s fundamental concern is to balance a basic statutory minimum pay rate that is fair, with one that is sustainable and which allows employers to continue to create quality sustainable jobs.

The commission have examined the employment and unemployment rates generally, how earnings have changed since the minimum wage was last increased and what impact a change to the minimum wage would have on employment, the cost of living and on national competiveness.

Many of the employees on the minimum wage are those within the services sector and there lies the biggest challenge for employer wage cost management eg hotels, restaurants and retail and where their wage bill constitute one of their largest overheads.

It has been recommended by the commission that any increase would be implemented later next year, to give seasonal employers a chance to get through the early and often quieter months of the year.

The rate has been viewed by the commission as a sustainable increase and they are hopeful that the government will implement it in the upcoming October budget. The commission made strong recommendations to the government that the anomalies that currently exist for both employees and employers in relation to PRSI and taxation variances need to be addressed if a wage increase is to make a difference in real terms for employees and employers.

This article is correct at 13/10/2015

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Caroline Reidy
The HR Suite

The main content of this article was provided by Caroline Reidy. Contact telephone number is +353 66 710 2887 / +353 86 775 2064 or email info@thehrsuite.com

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