Abolition of training rates of pay urged

The Low Pay Commission has recommended abolishing training rates of pay and say rates of pay for youth should be graded by age until they achieve the level of the national minimum wage.

The recommendations are contained in the second Low Pay Commission Report on the Sub-Minima Rates of the National Minimum Wage, published yesterday.

The current sub-minima rates relate to exceptions from the national minimum wage, such as those under 18 years of age, those over 18 who are in a first job for up to two years, and those over 18 who are undergoing a prescribed course of study or training.

In examining the issue, the commission said it was “concerned that the lack of clear definitions around the training rates may leave them open to abuse”.

The commission reviewed data from the CSO’s Quarterly National Household Survey for part of 2016 and found an average of just 1.5% of all employees, or around 22,500, reported earning less than the “adult rate” national minimum wage, which was then €9.15.

Around a quarter of those affected said they were on a special training rate and a similar percentage were on an age-related rate, but one third of those affected gave a non-specific “other reason” response as to why they were being paid as they were.

Other factors considered included Ireland’s high proportion of NEETs (people not in employment, education, or training) compared with European counterparts, and whether sub-minima rates for young people acted as an incentive for employers to hire young, inexperienced workers, or whether they discriminate against younger workers.

The report concludes that “an employee should not receive less than the statutory minimum wage unless as part of a proper apprenticeship programme already approved by the State”, thereby scrapping training rates.

It recommends the current rate for employees under the age of 18 should be retained, and for those in their first year of employment over the age of 18, the commission recommends a change to an age-based system.

“Under the proposed system, a rate of 80% of the national minimum wage should be payable for those aged 18 and a rate of 90% of the national minimum wage should be payable upon the employee turning 19,” it said.

Employees under 18 would receive a minimum of 70% of the wage, employees aged 18 would receive a minimum of 80% of the wage, rising to 90% for employees aged 19, and those aged 20 and over would receive the full national minimum wage .