Fergus O'Dowd
Question:136. Deputy Fergus O'Dowd asked the Minister for Enterprise, Trade and Employment his views on concerns raised by a small company (details supplied); and if he will make a statement on the matter. [45604/23]
View answerWednesday, 18 October 2023
Questions (136)
Written answers
The Low Pay Commission was established in 2015 as an independent body. It consists of an equal number of representatives with employee interests, employer interests, and independent members. The Commission makes recommendations on the National Minimum Wage to the Minister for Enterprise, Trade and Employment.
The National Minimum Wage seeks to find a balance between a fair and sustainable rate for low paid workers and one that will not have significant negative consequences for employers and competitiveness. As it is legally enforceable, it provides protection for workers.
The Low Pay Commission has an evidence-based approach to arriving at its recommendations. In making its recommendations, the Low Pay Commission is obliged to consider, among other factors, changes in earnings during the relevant period, changes in income distribution, and whether employment and unemployment have been increasing or decreasing.
The Commission is also obliged to consider the likely effect that any proposed order will have on levels of employment and unemployment, the cost of living, and national competitiveness.
In November 2022, the Government agreed to introduce a National Living Wage, set at 60% of hourly median wages, by January 2026. The €1.40 per hour increase in the National Minimum Wage, announced as part of Budget 2024, can be considered the second year of a proposed four-year path towards reaching the living wage of 60% of the median wage which is in line with the recommendations of the Low Pay Commission.
It is preferable to move towards a living wage gradually, using a procedure that takes account of prevailing economic conditions and that ensures that the minimum wage will continue to increase in future as economic conditions improve. The Government is supportive of the Low Pay Commission and the work it has carried out since its foundation and respects the independence of the Low Pay Commission.
As part of Budget 2024, the Government also introduced the Increased Cost of Business Scheme (ICOB) which will benefit up to 130,000 small and medium enterprises by providing financial support to those firms which have been most impacted by additional business costs.