The Irish Small & Medium Enterprises Association (ISME) is today calling on employers bodies to step down from the Low Wage Commission.
The call comes after the body recommended a 30c rise in the minimum wage, working out at around €12 per week for those working full time.
Trade union Unite said that the new National Minimum Wage rate of €9.55 is still over €2 short of the Living Wage, calculated this year as €11.70 per hour.
However, ISME maintains that the recommendations are unsupported by evidence, and that wage increases must be based on productivity.
ISME director Neil McDonnell says it simply is not feasible.
"The issue is that the Commission has not justified the increase in any way," he said.
"It is required by the terms of reference to do so, it has recommended a 30c per hour increase in the minimum wage, and that would appear to have been accepted by the Government.
"And for that reason, we think, the employers' representatives that are serving are no longer serving a useful purpose, and they should stand aside from that low pay commission."
He added: "When we asked business owners about their own pay this year, 62% said they would not increase their earnings from the business.
"The businesses which can afford pay increases are paying them. The businesses which cannot, will not. It is that simple. Low-skilled and no-skilled workers will not have their earnings increased by lifting the minimum wage. This can only happen through gains in productivity.
"If Government is earnest in improving the lot of the lower paid, it will invest heavily in skills-based training in this year’s budget"
"Meanwhile, it is clear that the Low Pay Commission has ceased to provide objective, evidence-based reasoning behind setting the minimum wage. The employer representatives should no longer grace this political charade with their presence and should resign from the LPC now."