HABIC Submission to Low Pay Commission

National Minimum Wage

posted in: COVID-19 Updates, HABIC

In early October 2020, the Government approved the Low Pay Commission’s increase in the National Minimum Wage of 10 cent an hour. This represents a 10 cent increase on the current National Minimum Wage (NMW) of €10.10 per hour which will bring  it to €10.20 per hour from 1 January 2021.

There has been some controversy surrounding this announcement with the Irish Congress of Trade Unions General Secretary Patricia King and the General Secretary of the retail union Mandate Gerry Light quit the Low Pay Commission on the basis that the group’s proposed 10 cent increase did not go far enough to address the needs of minimum wage workers. HABIC on the other hand, in our Submission to the Low Pay Commission recommended that they not increase the NMW.

Since the introduction of the National Minimum Wage under the National Minimum Wage Act, 2000, the rate has been adjusted. Details of these adjustments in percentage and monetary terms can be seen below:

DateMinimum WageIncrease in NMW €%
1 April 2000€5.58 (£4.40)n/a
1 July 2001€6.00 (£4.70)0.427.5%
1 October 2002€6.35 (£5.00)0.355.8%
1 February 2004€7.000.6510.2%
1 May 2005€7.650.659.3%
1 January 2007€8.300.658.5%
1 July 2007€8.650.354.2%
19 January 2011€7.65– 1.00– 11.6%
1 July 2011€8.651.0013.1%
1 January 2016€9.150.505.8%
1 January 2017€
1 January 2018€9.550.303.2%
1 January 2019€9.800.252.6%
1 February 2020€10.100.302.9%
1 January 2021€10.200.101%

Low Pay Commission Submission

On March 6th (before we took on COVID as a nation), HABIC made a Submission to the Low Pay Commission on this very topic – National Minimum Wage. In our Submission Introduction HABIC states the following…

HABIC welcomes the opportunity to present this submission to the Low Pay Commission
regarding the appropriate National Minimum Wage for 2021. HABIC fully recognises the
requirement for the National Minimum Wage and its vital role in creating a fair society of all.
HABIC holds the view that it is essential that the National Minimum Wage reflect the
commercial realities of all industries, sectors, and regions. In this submission, HABIC argues
against any increase regarding the National Minimum Wage and proposes that the Low Pay
Commission recommend no change to the current National Minimum Wage.

In our submission to the Low Pay Commission we state The Reality of running an SME in Ireland:

The Reality
The cost of running an SME in Ireland is out of sync with the ability and willingness of the
consumer to pay higher prices for services or goods received, ultimately resulting in the
threat of substitution or in the contraction of spend ability. Therefore, any additional increase
in the national minimum wage will, without doubt, result in job losses and SME closures.
Like ISME, HABIC hold the position that incremental and modest increases in the National
Minimum Wage does not support the low-paid in a real and substantial manner. It will not
remove poverty traps for vulnerable workers. If government want to really support these
workers, they need to move more towards reducing the Cost of Living in Ireland.
Furthermore, the uncertainty of the effects of Brexit on the Irish economy and, most recently,
the threat of the Coronavirus leaves the economy and all enterprises in a vulnerable and
unknown position.

This submission was written and submitted on Mar 6th, we knew then very little of what 2020 would hold for us all as consumers, workers and business owners. Despite the considerable lobbying for the living wage, the increase of 1% is lower than the average increase over the past number of years.

That said – it is important now as you plan for your business in 2021 and as you set your KPI’s for the year, that you are mindful of this increased cost.

Should you wish to read our full Submission to the Low Pay Commission on the National Minimum Wage – Read More!

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