Pearse Doherty (Donegal, Sinn Fein)
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61. To ask the Minister for Enterprise, Trade and Employment to outline any plans to remove sub minimum wages and any economic impact assessment that has been carried; and if he will make a statement on the matter. [21465/25]

Peter Burke (Longford-Westmeath, Fine Gael)
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The National Minimum Wage Acts allow for lower, or sub-minimum rates of the minimum wage for those employees aged under 20. Those aged less than 18 years can be paid 70 per cent of the full minimum wage rate, while those aged 18 years and 19 years can be paid 80 and 90 per cent of the full rate, respectively.

As the deputy is aware, the Low Pay Commission recommended the abolition of sub-minimum rates in March 2024.

The Low Pay Commission highlighted in its report that this is a complex issue. They have said Government will need to give their findings and recommendations detailed consideration and deliberation.

The recommendations were accompanied by a research report by the ESRI. While this study provides valuable information on the incidence and characteristics of sub-minimum employment in Ireland, during 2022, it stops short of modelling the impact of making changes to youth rates.

My Department has commissioned an economic impact assessment of the Commission’s recommendations.

The economic impact assessment will provide us with more up-to-date data on the use of sub-minimum rates and will independently evaluate the economic impact of possible changes to the sub-minimum wage regime in Ireland by:

• Modelling the impact of making changes to youth rates on firms of different size and in different sectors and regions, and
• Examining any potential unintended impacts of making changes to youth rates, such as increased unemployment of younger workers and the possibility of young people exiting formal education in favour of entering the workforce.

This is a complex and nuanced issue, but this Government is committed to fair and sustainable wages for all workers. The National Minimum Wage increased to €13.50 per hour on 1st January, an increase of over 6% which is ahead of projected wage growth across the economy.

The current system of youth rates is based on a percentage of the full minimum wage; when the minimum wage increases, these sub-minimum rates also increase, with young people in receipt of these rates seeing a commensurate increase in their wages.

Recent significant increases in the minimum wage show Government’s continuing commitment to fair wages for the lowest paid workers in our economy, but it is also important to acknowledge the challenges the enterprise sector has faced over the last number of years.

We know that the use of sub-minimum youth rates is largely concentrated in the accommodation, food, and retail sectors, and that these are sectors that have reported facing considerable cost pressures.

Government recently approved the acceleration of the development of a new whole-of-government Action Plan on Competitiveness and Productivity, alongside a suite of immediate measures designed to bolster business resilience and support competitiveness.

As part of the immediate measures designed to bolster business resilience and support competitiveness Government has agreed to defer any decision on sub-minimum youth rates of the National Minimum Wage.

It is important that we give this issue the full care and deliberation it requires, and to not rush into a decision that could have unintended consequences, for young people, for employers, and considering the current economic uncertainties, it is important to proceed with caution to allow for a more comprehensive understanding of the evolving landscape.