Employment Law & HR Advice
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
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 €10.20 as of 1st January 2021.
The sub-minimum rates for young people are to continue to be applied as follows:
For young people these are:
- 70% of adult rate (€7.14) Those aged under 18
- 80% of adult rate (€8.16) Those aged 18
- 90% of adult rate (€9.18) Those aged 19
Since 4th March 2919 trainee wage rates have been abolished.
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.