In general, all experienced adult workers are entitled to receive the minimum wage pursuant to the terms of the Minimum Wage Act 2000.  There are limited exceptions to this rule that allow an employer to pay below the minimum wage rate to certain employees.

The minimum wage in Ireland is set to increase by 6% from €8.65 to €9.15 on 1 January 2016. This increase has been offset to a limited degree by the changes to employers’ PRSI. Employers of Class A employees earning between €356.01 and €376.00 a week will pay employer PRSI at the rate of 8.5% (previously 10.75%), from 1 January 2016.

Working hours

The law ensures that employees obtain the minimum rate only when they are actually working. Working hours include overtime, time spent travelling on official business and time spent on training courses that are authorised by the employer during normal working hours. However, it is not necessary to include time on standby or on call at a place other than a place of work.

Sub-minimum rates

It is permissible to pay sub-minimum rates to an employee where he/she is not an experienced adult employee. An experienced adult employee is an employee who has been employed, in any capacity, for any two years over the age of 18.

The sub-minimum rates of pay for 2015 and 2016 are set out below:

Click here to view table.

For example, from 1 January 2016 the minimum rate of pay for an employee who is over 18 and who has less than one year’s employment experience is €7.32.

The sub-minimum rates may change going forward as the Minister for Business and Employment, Ged Nash has requested the Low Pay Commission to review the area of sub-minimum rates.

Trainee Rates

Employers are also permitted to pay reduced rates to employees who are over 18 and undergoing a course of structured training or directed study which is authorised or approved by his/her employer.

REAs and sectoral employment orders

The Industrial Relations (Amendment) Act 2015 provided for both registered employment agreements and sectoral employment orders. In 2016, it is expected that these mechanisms will influence the minimum wage rates in certain employments and/or sectors.

For example from 1 October 2015, the new employment regulation orders for the security and contract cleaning sectors have come into effect. Security industry staff have secured a pay increase from €10.01 to €10.75 per hour. Contract cleaners are now entitled to be paid €9.75 per hour. Workers from both sectors will also benefit from enhanced overtime rates and other improved terms and conditions.

Checklist for employers

The following items are worth remembering in relation to the Minimum Wage Act:

  • Are you capturing an employee’s correct working hours to determine if he/she is receiving minimum wage?
  • Is there any scope for applying the sub-minimum rates or trainee rates?
  • Employers are required to keep records to demonstrate their compliance with the Minimum Wage Act for at least 3 years.