Seanad debates
Tuesday, 24 October 2023
Nithe i dtosach suíonna - Commencement Matters
Low Pay Commission
1:00 pm
Martin Conway (Fine Gael)
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The Minister of State, Deputy Richmond, is very welcome to the House, as always.
Fintan Warfield (Sinn Fein)
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I am grateful to the Cathaoirleach for selecting this Commencement matter and the Minister of State for coming to the House to discuss it. It involves a simple ask of the Government: when does it expect to receive the report of the Low Pay Commission on youth rates of the minimum wage? I ask the Minister of State to provide a clear timeline for publication of the report when he receives it.
I tabled this Commencement matter having read the transcript of the meeting of the Oireachtas Joint Committee on Enterprise, Trade and Employment last week. I was particularly concerned that the chairperson of the commission considered the estimated number of people on sub-minimum rates of youth pay to be a small number. I hope that is not a reflection of the priority given to the report by the commission. I am sure it is not a reflection of such but, as one cannot be certain from inside this House, I decided to table a Commencement matter to ascertain when the Government expects to receive the report.
The number of people affected by sub-minimum rates of pay is certainly not small. The Central Statistics Office, CSO, places it at 34,000. As Deputy Barry pointed out at the committee meeting to which I referred, if there is an estimated 150,000 people on the minimum wage, we are talking about one quarter of those workers earning below the minimum wage. As the Minister of State will be aware, those aged 16 or 17 can be paid 70% of the minimum wage, those aged 18. 80% of the rate and those aged 19, 90%. A person is not legally entitled to the minimum wage until he or she reaches the age of 20. In its pre-budget submission, the National Youth Council of Ireland, NYCI, noted that, based on a 35-hour working week, an 18-year-old will earn more than €4,000 less in a year than a 20-year-old performing the same role. The NYCI stated that sub-minimum rates are discriminatory, leave young workers open to exploitation and put many young people providing for themselves and their families in financial difficulty at a time of high costs. It also notes that Ireland is one of only four countries in the EU27 to have age-based rates in place for young workers.
When does the Government expect to receive the report on youth rates of the minimum wage? Is there a timeline for publication of the report following its receipt from the Low Pay Commission?
Neale Richmond (Dublin Rathdown, Fine Gael)
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I am grateful to Senator Warfield for submitting this timely and important Commencement matter. Before I get into the specifics of the sub-minimum wage rate, it is important to lay out the context in which we are discussing it, with regard to the national minimum wage. We all know it has increased as part of the budget to €12.70 per hour. That will come into effect from 1 January. This represents an €1.40 increase, or 12.4%, on the current national minimum wage. This is the tenth increase to the minimum wage since 2011. It is a significant one that should not be underestimated. The increase in the national minimum wage will mean that those working under certain conditions, under the ages of 18, 19 and 20, will receive corresponding increases in their pay, as they are currently entitled by law. I will not go into the rates, as Senator Warfield has laid them out already.
The current system of sub-minimum rates is based on the recommendations of the Low Pay Commission, which last examined this issue in 2017. We are six years on now. It is important to note that many employers are already paying workers under 19 the full minimum wage and they are entitled to disregard the sub-minimum rates where they want to. Last year, the then Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Leo Varadkar, requested the Low Pay Commission to again examine the issues relating to retaining or removing the sub-minimum or youth rates and to make recommendations on the subject. The Low Pay Commission takes an evidence-based approach to its work and asked the Economic and Social Research Institute, ESRI, to conduct background research on the issue. I understand that this research report has been submitted to the commission and will be published by the ESRI early next month.
During the summer, the Low Pay Commission held a targeted stakeholder consultation on the sub-minimum rates issue, which will also inform its deliberations on this work. The commission is made up of both employer and employee representative groups, which take all matters and perspectives into consideration when making any recommendation to Government. The Low Pay Commission has indicated that it intends to submit its report and recommendations to the Minister, Deputy Coveney, before the end of the year. There has been no change to this timeline. The Low Pay Commission has been working to this timeline since it commenced this work. The Minister, Deputy Coveney, will then publish the commission’s report, while considering its contents and recommendations and the appropriate next steps.
Fintan Warfield (Sinn Fein)
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I appreciate the Minister of State's response. There is no reason to believe that we will not have a report by Christmas, a year on from the commencement of the draft report. I failed to reference the issue of low pay for migrant workers and young workers, particularly women, since there is a gender aspect to this, as well as single parents, people with disabilities and people who face multiple forms of discrimination. They still have a far higher probability of being on the minimum wage or being low-wage earners than other groups. I thank the Minister of State for coming in and the Cathaoirleach for accepting the Commencement matter.
Neale Richmond (Dublin Rathdown, Fine Gael)
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The Senator briefly on a couple of issues that I could speak for much longer than a minute about. I would appreciate the chance to come back into the House to perhaps have a wider discussion. One thing I would be heartened about, parallel to this, is that in second quarter of this year, we recognised the job rates and decrease in unemployment, and 75% of people returning to work were women. That shows progress in bringing people back into the workforce. I fundamentally agree with the Senator and I would like to work further to make sure that people are going in at a higher wage rate. That is a topic for a totally different issue and day. Specifically on sub-minimum rates, once that report is published, we will consult, and I will be more than happy to come in and discuss it with the House. As I said, we hope to make a decision on this early in the new year, once we receive the report.
Martin Conway (Fine Gael)
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I thank the Minister of State. I will pass on his interest in coming in for a wider discussion to the Leader. I am sure that would be facilitated and it would be very much appreciated. As always, I thank the Minister of State for his time. We understand how busy he is but he always makes time to come into the Seanad and we appreciate it.