Paul Murphy (Dublin South West, RISE)
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172. To ask the Minister for Enterprise, Trade and Employment his views on lower minimum wages for young workers; and if he will make a statement on the matter. [44023/21]

Leo Varadkar (Dublin West, Fine Gael)
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Legislation governing the national minimum wage is set down in the National Minimum Wage Act 2000 and the National Minimum Wage (Low Pay Commission) Act 2015. These Acts provide for the setting of a national minimum wage and also provide that in specified circumstances, a reduced, subminimum rate may be applied.

The Low Pay Commission was requested, as part of its 2016 work programme, to examine the sub-minimum rates (special training and youth rates) of the national minimum wage and to report its recommendations.

The subsequent 2017 Low Pay Commission report on subminimum rates sets out a clear evidence base and rationale for its recommendations. The Commission commissioned research by the Economic and Social Research Institute (ESRI), which examined international practices in relation to the national minimum wage and subminimum rates. The ESRI research found that of the 26 OECD countries (out of 34) that have a statutory national minimum wage, just over half include subminimum rates for young people.

The Low Pay Commission considered abolishing youth rates but concluded that the minimum wage rate would then no longer offer any recognition of the difference between a young inexperienced worker and a more experienced colleague, which could lead to employers no longer seeing a value in hiring young people (and potentially impact on youth employment rates). The Low Pay Commission also concluded that abolishing youth rates could potentially act as an incentive for young people to leave education and take up employment, which could have a negative impact on their long-term prospects.

Ultimately, the Commission recommended that the youth rates should be simplified and be changed to an age-based system. The Commission also recommended that the trainee rates should be abolished. These recommendations were accepted by Government and the changes came into effect on 4 March 2019.

It is worth noting that the Commission recommended that the rate for employees under the age of 18 should also be retained in acknowledgement of the fact that such employees have a statutory restriction on their working hours and conditions under the Protection of Young Persons (Employment) Act 1996.