Emer Higgins (Dublin Mid West, Fine Gael) | Oireachtas source

As the Deputy will be aware, the Low Pay Commission was asked in 2022 to examine the issues around retaining or removing the sub-minimum youth rates of the national minimum wage and to make recommendations on the matter. The Low Pay Commission asked the ESRI to conduct background research on the issue under the terms of the Low Pay Commission and ESRI partnership agreement. This ESRI report on sub-minimum wages in Ireland was published in November 2023. The ESRI study examines the incidence and the characteristics of young employees who are paid below the full national minimum wage rate. The Low Pay Commission has conducted an in-depth review of the sub-minimum youth rates and, informed by stakeholder consultation and the ESRI report, developed its recommendations on these rates. I published the Low Pay Commission’s report on sub-minimum youth rates of the national minimum wage just last month.

As the Deputy is aware, the Low Pay Commission has recommended the removal of all sub-minimum youth rates of the national minimum wage. What is really interesting is the commission highlighted in its report that this is a complex issue. It has said the Government will need to give its findings and recommendations detailed consideration and deliberation, and it highlighted the need for the Government to take its own legal advice on the matter. That is what we are now going to do. I have also committed to commissioning an economic impact assessment of the recommendations. The terms of reference for that are being considered. The economic impact assessment will model the impact of making changes to youth rates on firms of different sizes and in different sectors. It will also consider the likely changes to the national minimum wage given the Government’s decision to progress to a living wage set at 60% of the median wage.

This is quite a complex and nuanced issue. For example, the sub-minimum rates varies considerably across different age groups. Some 45% of 15- and 16-year-olds are in receipt of sub-minimum rates, but fewer than 5% of 19-year-olds are paid these rates. In addition, the use of sub-minimum youth rates is largely concentrated in the accommodation, food and retail sectors and these are sectors we know are under pressure.

To answer the Deputy's direct question, we will make a decision on this important issue when the results of the economic impact assessment and the legal advice are available to us.

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