National minimum wage increase may be deferred over no-deal Brexit

The introduction of a proposed increase in the national minimum wage could be deferred for a couple of months until March of next year in the event of a no-deal Brexit.

Minister for Employment Affairs and Social Protection Regina Doherty will this week bring proposals to the Cabinet which would see the national minimum wage for adults increase by 30 cent to €10.10 per hour.

Increases in the national minimum wage in recent years have generally been approved by the Government in the autumn on foot of recommendations from the Low Pay Commission and come into effect at the start of January.

However it is understood that as part of the proposals being considered by Cabinet this week, the increase in the national minimum wage may be deferred until March if there is a no-deal Brexit.

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Government sources said this would be aimed at providing a “breathing space” for employers who would have to deal with the fallout from a no-deal Brexit.

The current national minimum wage stands at €9.80 per hour for adult workers.

Taoiseach Leo Varadkar told the biennial conference of the Irish Congress of Trade Unions (Ictu) in July that the national minimum wage was likely to exceed what he described as the "psychological barrier" of €10 per hour next year.

Endorsed

A 30 cent rise in the national minimum wage would be slightly more than the 25 cent increase which was recommended by the Low Pay Commission last year and subsequently endorsed by the Government.

The commission was established by the Fine Gael/Labour coalition in 2015 to advise ministers on the appropriate rate for the national minimum wage.

It comprises an independent chairman appointed by the Government as well as representatives of unions, employers and campaign groups who came through a public appointment process.

Increases in the national minimum wage over recent years have generally been welcomed by trade unions, but employers’ representatives have tended to be more critical.

Acceptable

The national minimum wage is different to the living wage, which is the amount which social campaigners argue is the level of earnings required to provide an acceptable standard of living.

Earlier this year, a report produced by the Living Wage Technical Group deemed the living wage in Ireland to be €12.30 per hour.

Mr Varadkar told the Dáil in July that the national minimum wage in Ireland was now the second highest in the European Union, adding that the country was "far" from being behind the curve.