30c hike in minimum wage from January
MINISTERS are to sign off on a 30c increase to the minimum wage in advance of the Budget.
The hike, which will bring the lowest legal wage to €9.55 per hour, is to be discussed by the Cabinet tomorrow.
Based on recommendations made by the Low Pay Commission, the increase will come into effect from January.
It amounts to a 3.2pc increase in the national minimum wage, which is significantly ahead of the rate of inflation and will benefit at least 150,000 workers.
The Irish Independent understands Finance Minister Paschal Donohoe will formally announce the increase during his first Budget speech.
However, business representatives are likely to oppose the move, as it will increase financial demands on employers, particularly in the services sector.
It will be the second increase to the minimum wage since this Government involving Fine Gael and Independents came to office, with a 10c increase in 2016. The Programme for Government commits to increasing the minimum wage to €10.50 by 2021.
The increase is expected to come under criticism from a number of business groups who believe it will strain the finances of employers.
Employers’ group Ibec has long argued that there is no justification for the increase in minimum wage. It also said the increase will put pressure on companies already facing difficulties from Brexit and previous wage increases.
The Restaurants Association of Ireland has warned this sector is especially vulnerable to wage increases, as it presses for the 9pc hospitality VAT rate to be maintained.
The Small Firms Association also criticised the recommendation when it was discussed earlier this year – claiming that raising the minimum wage is a “barrier to job creation”.
It believes the increase could hold back the number opportunities available for young people looking to enter the labour market.