There is a national minimum wage. The hourly rate can be adjusted by the Government by order. It is currently €9.55 per hour (January 2018)..
All employees over 18 years are entitled to be paid no less than the minimum wage. Employees under 18 years must be paid at least 70% of the minimum wage.
Reduced rates may be paid to those who enter employment for the first time. 80% of the minimum wage rate must in the first year and 90% in the second year for the first two years after which the person enters employment or turns 18.
Higher rates of pay may be under a registered employment agreement or employment regulation order made by a Joint Labour Committee for the sector.
There are regulations relating to trainees, who may be paid at a rate below the minimum wage, subject to certain requirements. Since 1 February 2011 the trainee rates are as follows;
- First one-third of training course 75% of NMW;
- Second one-third of training course 80% of NMW;
- Final one-third of the training course 90% of NMW
Each one-third period must be at least 1 month and no more than 1 year.
Certain criteria must be met by the training course;
- it must be for the purposes of improving the work performance of the employee;
- the employee’s participation in the training or study must be directed or approved by the employer;
- at least 10% of the training must occur away from the employee’s ordinary operational duties;
- there must be an assessment and certification procedure or written confirmation on the completion of the training course.
The Labour Court, on the application of an employer, may grant a temporary exemption from the minimum wage based on financial difficulties for a period of between three months and one year. A majority of employees or their representatives must consent to the application and agree to abide by the Labour Court decision.
The employer must show that it cannot meet the cost of paying the minimum wage and that the only alternative would be termination of employment or layoff. The Labour Court decides the duration of the exemption and the pay rates.
Variation of Contract
An employment contract which provides for less than the minimum wage is varied to provide for the minimum level. It is not possible for the parties to the contract to agree to pay less that the minimum wage; €9.25 per hour.
An employer may not reduce an employee’s hours without reducing the amount of work required, in order to avoid the legislation. If this occurs, there is deemed to be a dispute which can be referred to the WRC. The burden is on the employer to show that the purpose of the change was not to avoid the minimum wage.
The minimum rate is applied over a reference period, which cannot be more than a month. The hours are calculated by reference to the hours worked, or where the employee is available for work and paid for such availability, the hours concerned.
Where the employee’s work hours are independently determined by him, he must provide the employer with a record of working hours in any pay period. This does not apply if his pay is likely to be at least one and a half times the minimum wage. It is an offence for the employee to give false information.
The relevant hours for the purpose of the minimum wage include overtime, time spent travelling in employment, training courses study authorised by the employer within working hours.
It does not include time spent on annual leave, sick leave protective leave parental leave, lockout, time for pay in lieu of notice time, spent travelling to work. Time spent on the daily rest breaks is counted.
Some benefits in kind count toward the national minimum wage. Excluded from the calculation of the minimum wage is non-reckonable pay including
- call out premium;
- unsocial hours premium;
- distributed tips or gratuities paid into a central fund managed by the employer and paid through payroll
- public holiday Saturday, Sunday premiums where worked;
- additional duties expenses arising out of s post of responisility;
- any payment of expenses incurred by the employee in carrying out his or her employment, including travel allowance, subsistence allowance, tool allowance and clothing allowance.
- on-call or standby allowance.
- any payments for or in relation to a period of absence of the employee from the workplace, such as sick pay, holiday pay, payment for health and safety leave under the Maternity Protection Act,
- Any payment by way of an allowance or gratuity in connection with the retirement or resignation of the employee or as compensation for loss of office.
- Pension contributions paid by the employer on behalf of the employee.
- any payment referable to the employee’s redundancy.
- any advance of payment in the specific pay reference period relating to a subsequent pay reference period.
- any payment-in-kind or benefit-in-kind, except board with lodgings, lodgings only or board only.
- any payment to the employee otherwise than in his or her capacity as an employee.
- any payment representing compensation for the employee, such as for injury or loss of tools and equipment.
- an amount of any award under a staff suggestion scheme.
- any loan by the employer to the employee, other than an advance payment
Records and Statements
An employee must keep records to show compliance with the legislation. The records must be maintained for three years. This must show the hours worked and the wages paid. If the records are not kept, the onus is on the employer to prove compliance with the legislation. If records are kept, then the onus is on the employee to show that they are incorrect.
An employee who is paid less than one and a half times the minimum wage may request a statement from his employer of the average annual rate of pay for any period in the previous 12 months. The employer must give details in writing within four weeks. A failure to give the requested information is a criminal offence. It is necessary that the employee requests this statement before a complaint is made to the WRC.
An employee can seek compensation in court or make a complaint to the WRC in respect of non-compliance. In addition, the employer can be prosecuted.
The WRC may award arrears of the shortfall. The WRC can require corrective steps to taken. There is an appeal to the Labour Court. Where they have not implemented the employee trade union or Department can apply to the Circuit Court to implement the decision.
An employee may not be victimised for making a claim under the legislation.
Inspectors may make inspections to verify compliance.
Low Pay Commission
The National Minimum Wage Low Pay Commission Act, 2015 establishes the Low Pay Commission on a statutory basis. Its function is to examine annually and to make recommendations to the Minister, in relation to the national minimum wage. The objective is to secure that the national minimum wage is adjusted incrementally over time, having regard to changes in earnings, productivity, overall competitiveness and on the likely impact of any adjustment on employment and unemployment levels.
The Commission comprises nine persons and an independent chairman.
- three members are to have an interest in the understanding of the interest of low-paid workers;
- three members are to have an understanding of the interest of employers particularly small to medium size employers in traditionally low paid sectors; and
- three members are to have an understanding in relation to economics, labour market economics, statistics and employment law.
The Minister is to endeavour to have a gender balance in appointments. Members of the Commission are appointed for three years and may serve two consecutive terms. There is standard provision in relation to the Commission accountability to Oireachtas committees.
The Low Pay Commission may be requested by the Minister to examine, report and make recommendations on matters related generally to its functions. It is the duty of the Commission to make recommendations which are designed to set a minimum wage that
- is designed to assist as many low paid workers as reasonably practicable;
- is fair and sustainable,
- where adjustment is appropriate, that it is adjusted incrementally; and
- that over time it is progressively, increased without creating adverse consequences for employment or competitiveness.
In making recommendations, the Commission is to have regard to
- changes in earnings during the period;
- the exchange rates;
- income distribution changes;
- changes in employment, unemployment and productivity generally and sectorally;
- international comparisons, in particular with Northern Ireland;
- the need for job creation; and
- the effect on the levels of employment, competitiveness and the cost of the living.
Within three months of the receipt of a recommendation, the Minister is to decide whether to object, accept or vary the recommendations. The proposed order is laid before the Houses of the Oireachtas by the Minister who must set out the basis for any rejection or variation of the recommendation.
The Minister may make an order having regard to the economic and other factors specified in the legislation, regardless of whether the Commission in fact makes recommendations.
References and Sources
National Minimum Wage Act 2000
National Minimum Wage Act, 2000 (Commencement) Order 2000, S.I. No. 96 of 2000
National Minimum Wage Act, 2000 (Prescribed Courses of Study Or Training) Regulations 2000, S.I. No. 99 of 2000
National Minimum Wage Act 2000 (National Minimum Hourly Rate of Pay) Order 2006, S.I. No. 667 of 2006
National Minimum Wage Order 2017 SI No. 440 of 2017
National Minimum Wage Act 2000 (Section 11) Order 2011, S.I. No. 13 of 20111237
National Minimum Wage Act 2000 (Section 11) (No. 2) Order 2011, S.I. No. 331 of 20111238
National Minimum Wage Order 2015, S.I. No. 442 of 2015
Enterprise National Minimum Wage (Low Pay Commission) Act 2015
National Minimum Wage (Low Pay Commission) Act 2015 (Section 20) (Commencement) Order 2015, S.I. No. 340 of 2015
National Minimum Wage (Low Pay Commission) Act 2015 (Section 20) (Commencement) (No. 2) Order 2015, S.I. No. 411 of 2015