Dáil Éireann Debate, Wednesday - 1 May 2024
238. Deputy Rose Conway-Walsh asked the Minister for Children, Equality, Disability, Integration and Youth the estimated cost of a 1 cent increase in wages in the childcare sector if the State were to directly subsidise the increase; and if he will make a statement on the matter. [19903/24]
Amharc ar fhreagraI firmly believe the level of pay for early years educators and school-age childcare practitioners should reflect the value of their work for children, families, society and the economy.
The State is not the employer and therefore does not set the pay or conditions for employees in either early learning and care (ELC) or school-age childcare (SAC) services.
However, there is now, through the Joint Labour Committee (JLC) process, a formal mechanism established by which employer and employee representatives can negotiate minimum pay rates for ELC and SAC services, which are set down in Employment Regulation Orders (EROs). This is an independent process from the Department and neither I, nor my officials, have any role in the proceedings of the JLC and any associated negotiated minimum pay rates, the cost of which is borne by the employer.
Among other objectives, Core Funding supports the ability of service providers to meet the additional costs resulting from the EROs for Early Years Services, which came into effect in September 2022, as it provides increases in funding to early learning and childcare service providers to support improvements in staff wages, alongside a commitment to freeze parental fees.
On the basis of 2022 data supplied by Partner Services taking part in the Core Funding Scheme, the estimated cost to employers of raising the current ERO minimum pay rates by 1 cent per hour is approximately €350,000 per year, inclusive of employer-related costs (PRSI, etc).
In relation to this estimate, the following should also be noted:
• The cost estimates do not attempt to account for the potential cost implications for the wages of staff who are currently earning more than 1 cent per hour above current ERO minimum rates, therefore the 1 cent cost cannot be proportional extrapolated to estimate other additional costs e.g. a 2 cent cost would not be simply calculated by doubling the €350,000 1 cent cost.
• The cost estimates are based on staff who had an hourly wage recorded in service providers’ submissions for Core Funding, but the Core Funding data has been extrapolated to provide an estimate for all staff working in the sector.
• Current wage data was provided by service providers and may contain inaccuracies, but the has been adjusted upward on the assumption that all staff should earn at least the legally-binding minimum rates of pay specified in the EROs. The cost estimates are for the additional cost to employers of bringing staff from their current wage or the minimum pay rates set out in the EROs, whichever is higher, up to a pay rate of 1 cent more per hour for each of the minimum pay rates in the EROs.
• The cost estimates only relate to staff and managers covered by the current EROs, i.e. the estimates exclude the cost of ancillary staff.
