Payment of Wages

The main piece of legislation governing how employees can expect to be remunerated is the Payment of Wages Act, 1991. This establishes a range of legally acceptable modes of wage payment and also defines the circumstances in which deductions may be made and the nature of deductions permitted. The main provisions of the Act are outlined in this section and include:

  • Payment of Wages (General):
    Defines the methods and frequency of wage payment, and what and when deductions may be made.
  • National Minimum Wage:
    Details the rates and categories of the minimum wage – rates change in 2016 check here for details.
  • Payment of Training & Study:
    Details how to ensure the correct payment is made where employees attend for training and study.

 

National Minimum Wage

The Minimum Wage was introduced in Ireland by the National Minimum Wage Act. It states an hourly wage above and equal to which employers must pay employees. Exceptions exist for both employees who are close relatives to the employer, and those undertaking structured training schemes, such as apprenticeships. In 2015, the Low Pay Commission was appointed to examine and make recommendations to the Minister on the appropriate level of the national minimum wage and related matters, on an annual basis.

The NMW was set at €5.58 when first introduced and has increased steadily in the following years (apart from one brief decrease which was reversed). It currently stands at €9.25 as of 1st January 2017.

The sub-minimum rates for young people and certain trainees are to continue to be applied as follows:

For young people these are:

  • 70% of adult rate                     Those aged under 18
  • 80% of adult rate                     For the first year from date of first employment aged over 18
  • 90% of adult rate                     For the second year from date of first employment aged over 18

For those in structured training during working hours these are:

  • 75% of adult rate                    1st one third period
  • 80% of adult rate                    2nd one third period
  • 90% of adult rate                    3rd one third period


Does the increase in the Minimum Wage mean other Wage Levels must be increased?

ISME has argued that increasing the National Minimum Wage would damage job growth as SMEs are still recovering from the recession and, in many cases, have yet to benefit from the economic recovery.

This increase to the NMW may lead to requests from other employees for wage increases in order to preserve the differential between their salary/rate and the minimum wage.

The Act that introduced the NMW specifically states that the introduction of the National Minimum Wage is not a justification for pay increases for other employees.