Tuesday, 25 May 2021
Department of Public Expenditure and Reform
It is important that Ireland’s statutory National Minimum Wage and the Living Wage concept are not confused. The Living Wage has no legislative basis and is therefore not a statutory entitlement. It currently stands at €12.30 per hour according to the Living Wage Technical Group document 2020.
The National Minimum Wage is a statutory entitlement and has a legislative basis. The Low Pay Commission annually assesses the appropriate level of the National Minimum Wage. The current national minimum hourly rate of pay, since 1 January 2021, is €10.20 per hour, as set out in the National Minimum Wage Order (No. 2) 2020.
The suggested Living Wage at €12.30 per hour based on the Civil Service 37 hour standard net working week equates to an annual salary of €23,747.
Detailed data on civil service staff indicates that only some 0.2% of staff (FTE) in the civil service are on salary points less than €23,747. Further to this, all civil servants are paid at rates above the minimum wage of €10.20 per hour.
Those currently on an annual salary of less than €23,747 may be receiving remuneration in excess of the suggested living wage through additional premium payments in respect of shift or atypical working hours or are on salary scales that progress to the suggested living wage and above through incremental progression.
Building Momentum - A New Public Service Agreement 2021-2022 provides for a general round increase in annualised basic salary for all public servants of 1% or €500 (whichever is greater) on both 1 October 2021 and 2022, as well as the equivalent of a 1% increase in annualised basic salaries to be used as a Sectoral Bargaining Fund (in accordance with Chapter 2 of the Agreement) on 1 February 2022. The Agreement is heavily weighted towards those at lower incomes with headline increases of approximately 5% for the lowest paid public servants. These groups will also benefit more from other measures in the Agreement including the overtime rates and premia payment adjustments. By the end of the Agreement, the annualised pay increases will almost eliminate the cohort of civil servants earning less than the suggested living wage.
More broadly, the Low Pay Commission has, on request of the Government, formally begun work on examining how Ireland could move towards a Living Wage. The study will examine the design of a living wage in an Irish context and consider the policy, social and economic implications. It is expected that the report will be completed in the second half of 2021.