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Another increase to the National Minimum Wage?




Following an increase in the national minimum wage to €9.15 per hour on 1 January 2016 (see our previous blog here), the Low Pay Commission (the “LPC”) has now issued its second report recommending a further increase to €9.25 per hour in 2017 -  a modest 1.1% increase but one in excess of the current inflation rate. This report was submitted to Government on 19 July and the Minister for Jobs, Enterprise and Innovation has indicated that it will be considered in detail in the context of Budget 2017. The current Programme for Government has committed to increase the minimum wage to €10.50 by 2020.

According to the report, the purpose of the LPC is to recommend minimum wage rates to help low-paid workers, without causing a significant adverse impact on employment or the economy. In making its recommendation, the LPC is obliged to consider a range of issues, including: current rates of unemployment; the cost of living; international comparisons; and national competitiveness.  The recommendation was made following Brexit and the report itself commented that certain sectors of the economy are particularly exposed to the volatility of sterling and will be disproportionately affected. It seems that the recommendation was made in the absence of data to assess the impact of the LPC’s last recommendation (the increase from €8.65 to €9.15 per hour).  As a curious aside, the recommendation was not supported by 3 of the 9 members and the minority statements include some strong and potentially divisive statements expressing their views.

The full report is available here.