The Small Firms Association has branded the decision to grant a near 3% increase in minimum pay rates for building and electrical contractors "disappointing" and said the move will make it more difficult for small companies in the sector to compete.
Trade and Employment Minister Pat Breen has approved Labour Court recommendations to up minimum pay rates for contractors by 2.7%. From the beginning of October to the end of September 2020 the basic hourly rate of pay for craftspersons - including bricklayers, carpenters, glaziers, painters and joiners - will rise to €19.44 per hour, from €18.93.
The rate for category-A workers - scaffolders, crane drivers, heavy machine operators and the like - will go up to €18.86 per hour from €17.04.
From the beginning of October 2020, those new rates will rise to €19.96 and €19.37 per hour, respectively.
Minister Breen said the increases are "an important step in securing stability and growth in crucial sectors in our economy".
However, SFA director Sven Spollen-Behrens said: "Due to the high demand for tradesmen on building sites across the country, service providers in the construction and electrical sector are finding it difficult to compete against these labour rates, and to retain and attract tradesmen."
Trade union Unite cautiously welcomed the pay rises but called them "modest" and warned spiralling housing and childcare costs could cancel them out.
The Construction Industry Federation warned that the pay increases will put pressure on regional construction companies that are still in recovery mode.