Current lower minimum wage for young to be examined

The Low Pay Commission is to investigate whether it is appropriate for young people to continue to be paid a lower minimum wage than the rest of the workforce simply because of their age.

At present an under-18 worker can legally be paid as little as €6.06 per hour, the equivalent of 70% of the full minimum wage rate of €8.65 per hour. For the first year after the worker turns 18, the minimum rate they can be paid is €6.92 rising to €7.79 in the second year. A reduced rate is also applied to certain trainees who may have to start off on just 75% of the full minimum wage.

Thanks to Budget 2016, the full minimum wage rate is set to rise from €8.65 per hour to €9.15 and the reduced rates for young people and trainees, as detailed above, will rise commensurately.

Now, Business Minister Ged Nash has asked the Low Pay Commission to assess how the minimum wage is impacting, not just on young people, but also on women. His department said he wanted the commission, chaired by Donal de Buitléir, to examine the “appropriateness of the sub-minima rates for young people”.

Mr Nash said: “I want to have a better understanding of the impact of the national minimum wage on younger people, particularly those who may not be in employment or education. I think it is also timely that we examine if these lower rates of the minimum wage that apply to young people and those undergoing a structured training programme are appropriate.”

Ged Nash

His department said the commission is expected to complete that work by the end of February next year.

In relation to women in the workforce, Mr Nash said it was well known that the “vast majority” of those who are paid the national minimum wage are female: “Given the preponderance of women in low paid jobs, I have asked the Low Pay Commission to help us come to a better understanding of why this is so and what might be the underlying reasons for it. I have also requested that they make any recommendations they consider appropriate to address this by October 2016.”

Karan O’Loughlin, Siptu trade union’s campaigns and equality organiser, said the union welcomed the examination. She said it was well known that low pay disproportionately affects women, with estimates that two thirds of those on the minimum wage were female.

She also urged the Government to tackle precarious work — those where workers’ contracts do not guarantee hours of work and so they cannot rely on a guaranteed income.

Last week Mr Nash expressed concern at the emergence of “if and when” contracts which, the University of Limerick found last week, is being used by some employers in the retail and accommodation/food sectors to avoid even paying the minimum entitlements.