IBEC says five months not enough time to bring in 'considerable increase' to minimum wage

The Small Firms Association has said most of its members plan to give pay rises this year based on their ability to do so, after the Government raised the minimum wage by the 30c.

The Government yesterday increased the minimum wage by up to €12 a week in January in a move employers claim is not affordable and could threaten jobs.

Taoiseach Leo Varadkar said the decision to increase the minimum wage by 30c an hour would benefit up to 150,000 workers. Only those on full hours will earn up to an extra €12 a week.

This will bring the minimum wage to €9.55 an hour.

Employers group IBEC has also said there is no justification for the increase.

IBEC say the raise will put pressure on companies already facing difficulties from Brexit and previous wage increases.

Director of Employer Relations Maeve McElwee says they are not being given much time to adjust to the changes.

She said: "Five months is a very short period of time when you consider that this is a 10% cumulative increase since January 2016. That's a very considerable increase that employers in these sectors have been required to take on board.

"Five months is not an extensive planning period and we would call on the Government to consider some sort of staging of the implementation of this particular increase."

Mr Varadkar, flanked by his Independent Alliance colleague, Disabilities Minister Finian McGrath, said the increase would benefit those who get up early, work nights as well as weekends.

However, small firms took issue with the increase. Linda Barry, acting director of the Small Firms Association, said: "Two-thirds of SFA members plan to give pay rises this year, but increases will be based on the performance of the individual worker and the ability of the business to pay.

"An increase in the minimum wage imposed by Government, on the other hand, would ignore the realities facing many small businesses, especially those operating on low margins, including in rural areas and in sectors exposed to Brexit.

"Constant increases in the National Minimum Wage, however, create uncertainty and represent a barrier to job creation. This could pose a particular challenge for young people looking to enter the labour market, as 15-24 year olds make up almost 40% of those on the minimum wage."

Retail Ireland, the Ibec group that represents the retail sector, expressed concern at the Low Pay Commission recommendation to increase the wage, which led to the Cabinet’s decision.

Retail Ireland director Thomas Burke said: “With little to no inflation in consumer goods and growing concern over the impact Brexit is already having on the retail sector, there is absolutely no economic basis for a further increase to minimum wages.”

Rising costs are threatening the viability of retail businesses in Ireland and in turn jeopardising thousands of jobs in the sector, said Mr Burke.

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