Tuesday, 12 March 2019

Ceisteanna (675)

Willie Penrose


675. Deputy Willie Penrose asked the Minister for Employment Affairs and Social Protection if her attention has been drawn to the impact the abolition of training rates is having upon small businesses that are under pressure due to significant rates of VAT, PRSI, rates and other costs in their attempt to employ young persons as an apprentice; if training grants will restored in such circumstances; and if she will make a statement on the matter. [12041/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Employment)

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 (NMW) and also provide that in specified circumstances, such as younger workers and trainees, a reduced, sub-minimum rate may be applied.

In September 2015, the then Minister requested the Low Pay Commission to examine the appropriateness of the sub-minimum rates as provided for in the National Minimum Wage Act 2000 with regard, in particular, to their impact on youth unemployment rates and participation in education.

The Commission undertook a consultation process on this subject in line with its evidence based approach to making recommendations to Government and received 15 submissions in total. The Commission's final report was published on 20 February 2018.

Having examined all available evidence and submissions, and considered a range of options, the Commission recommended the abolition of training rates. The Commission had heard evidence in submissions of the training rates being paid in order to reduce wage costs rather than as part of a structured training programme. The Commission found that the lack of clear definitions around training rates left them open to abuse. In light of these considerations and the low usage of the training rates the Commission was of the view that training rates should be abolished. The Commission encouraged sectors to register for state approved apprenticeship programmes, which are under the remit of the Department of Education and Skills, if they felt that a period of structured training was required.

In its report the Commission also recommended simplifying the rates of minimum wage for those aged under 18 to 20 as follows:

- Employees under 18 would receive a minimum of 70% of the NMW

- Employees aged 18 would receive a minimum of 80% of the NMW

- Employees aged 19 would receive a minimum of 90% of the NMW

- Employees aged 20 and over would receive the full NMW.

These recommendations were accepted by Government and the amendments to make the necessary legislative changes to the National Minimum Wage Act 2000 were implemented via the Employment (Miscellaneous Provisions) Act 2018. The changes came into effect on 4 March 2019.

The Low Pay Commission is an independent authoritative body on matters relating to the national minimum wage and I am confident that the Commission gave consideration to the impact of any recommendations it made in regard to training rates.

I trust this clarifies the matter for the Deputy.