Paul Murphy (Dublin South West, Solidarity)
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11. To ask the Minister for Enterprise, Trade and Employment if he will abolish subminimum wages for young workers; and if he will make a statement on the matter. [6496/25]

Paul Murphy (Dublin South West, Solidarity)
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Will the Minister finally abolish the legalised discrimination and super-exploitation of young people in this country who are currently legally paid as little as €9.50 an hour, purely on the basis of their age? Will he abolish these subminimum wage rates whereby those under 18 can legally be paid less than the minimum wage? The can has been kicked down the road for years now. It is time to abolish these rates.

Alan Dillon (Mayo, Fine Gael)
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I thank Deputy Murphy for raising this really important matter. As he will be aware, the Low Pay Commission recommended the abolition of the subminimum rates in March 2024. The Low Pay Commission highlighted in its report that this is a complex issue. It stated that the Government will need to give the findings and recommendations detailed consideration and deliberation, and highlighted the need for the Government to take its own legal advice on this really important matter. I agree with the commission that this is a complex issue. Our Department is giving these findings and recommendations its full consideration. Our Department has commissioned an economic impact assessment of the commission’s recommendations. These recommendations were accompanied by a research report by the ESRI. While the study provides valuable information on the incidence and characteristics of subminimum employment in Ireland during 2022, it stops short of modelling the impact of making changes to youth rates in the here and now.

Recent significant increases in the minimum wage show the Government’s commitment to fair wages for low-paid workers in our economy, but it is also important to acknowledge the challenges being faced by the small and medium enterprise sector in recent years. We know the use of subminimum youth rates is largely concentrated in the accommodation, food and retail sectors and that these sectors have reported considerable cost pressures in recent times. It is important we give this issue the full care and the deliberation it requires, rather than rushing into a decision that could have unintended consequences for young people and employers. The Government will make a decision on these rates after the economic impact assessment has been completed and any required legal advice is available to us.

Paul Murphy (Dublin South West, Solidarity)
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The Minister of State says we should not rush into a decision. It is two years since this Dáil passed a Bill that I brought forward to abolish these rates. The Government brought in a timed amendment to delay it for a year so the Low Pay Commission could report. The Low Pay Commission studied it with the ESRI study, as the Minister of State said, and it came out with clear recommendations. The Minister of State says he agrees with the commission that the Government needs to consider it. Does he agree with the commission's very clear recommendation that subminimum wage rates for employees of 18 and 19 years of age should be abolished no sooner than 1 January 2025? Similarly, the rates for those under 18 should also be abolished. The recommendation is absolutely clear. Is the Minister of State saying business costs are a consideration here? If he is, he is going against the recommendations of the Low Pay Commission, which make clear that would not stand up under EU law. The EU law on adequate minimum wages states that any exceptions need to have objective justification. Business costs and the Minister looking after low-paying employers does not count as an objective justification. He may well be in breach of the EU directive.

Alan Dillon (Mayo, Fine Gael)
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Gabhaim buíochas leis an Teachta. Certainly, it is a more nuanced issue than he is suggesting. It is really important that our Department compiles the economic impact assessment which will provide more up-to-date data. The previous Low Pay Commission and ESRI reports on the use of subminimum rates were back in 2022. We want to independently evaluate the economic impact. We also want to model the impact on making the changes to the youth rates on firms of different sizes and in different sectors, such as accommodation, hospitality and retail, and also within the regions. We also want to examine any potential unintended impact from making changes, such as an increase in unemployment of youth workers and also the possibility of young people exiting formal education in favour of entering the workforce. It is complex. It has been referred to the issues we need to assess. We have made substantial support available and given a commitment to support workers. We have a very strong record of introducing new workers' rights and we have also seen the introduction of many measures relating to the minimum wage, requests for remote working and statutory sick leave, as well as tips and gratuities which was a recent progressive initiative undertaken by the Government.

Paul Murphy (Dublin South West, Solidarity)
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Where is the nuance? Will the Minister of State tell me why 18-year-olds should be legally paid 80% of the minimum wage? They cannot tell their landlord they will only pay 80% of the rent. They cannot give a supermarket 80% of the cost of their groceries. What is the objective justification for paying a young person less than the minimum wage purely on the basis of his or her age?

When is the economic impact assessment going to happen? The Department officials came before the committee in September and said they had started it - it was another exercise in kicking the can down the road - and it would be ready in six to nine months. Six months have now passed. When is it going to be ready? It is time to stop kicking the can down the road. The issue is not enormously complex. It is clear we now have an obligation under the EU directive on minimum wages to get rid of this because there is no objective justification for it. That is what the Low Pay Commission is saying. Instead, the Department is allowing itself to just represent the interests of some of the lowest-paying employers in the country - people who want to employ workers on less than the minimum wage. There is no objective justification for that. It is fundamentally unjust.

Alan Dillon (Mayo, Fine Gael)
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Go raibh maith agat. It is an issue I have raised with the Department in preparation for today's Oral Questions. We do want this economic impact assessment to be provided, evaluated and reviewed. As I said, we have made substantial increases in the national minimum wage. The current system for youth rates is a percentage of the full minimum wage. They have also seen an increase in recent times. We have also made progressive changes in policies impacting all workers across all ranges, including banning zero-hour contracts, enacting the tips legislation and learning from the pandemic around statutory sick pay. We have, therefore, undertaken substantial measures. However, we must also consider the real impact, cost and competitive pressures on certain sectors, such as in hospitality, retail and accommodation. This aspect needs to be factored in before we make any decision concerning the implementation or abolition of the subminimum youth rates. We will take this in the context of moving forward in the months to come.