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02 Oct 2022

Increase in the National Minimum Wage and the 2023 Living Wage announced

Increase in the National Minimum Wage and the 2023 Living Wage announced

Details of new Sick Pay scheme were also announced

The Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar has received Government approval to accept the recommendation of the Low Pay Commission to increase the National Minimum Wage to €11.30 per hour from January 1, 2023.

This represents an 80 cents increase, or 7.6%, on the current National Minimum Wage of €10.50 per hour and will see at least an estimated 164,700 people get a boost to their wages.  For someone on the National Minimum Wage working a 39-hour week, this translates to a pay increase of €31.20 per week or more than €120 per month, or €1,600 per annum.

The Tánaiste also announced that the Low Pay Commission has set an indicative National Living Wage for 2023 of €13.10 per hour. The intention is to phase in the Living Wage between now and 2026 when it will become mandatory. In the meantime, it will be revised annually as a benchmark for employers.

The Tánaiste also announced that he will commence the Sick Leave Act on January 1, 2023. This Act will, for the first time, introduce an entitlement for all employees to sick leave paid by their employer in addition to illness benefit from the State.

Announcing the increase in the Minimum Wage today (Wednesday September 14), the Tánaiste said:

“We want to reward work and ensure that work pays more. Minimum wage workers are among the hardest working people in Ireland and deserve to be paid more, particularly at a time or rising prices. 

“So, the Government has agreed to accept the Low Pay Commission’s recommendation to increase the National Minimum Wage by 80 cents to €11.30 from January 1. At least 164,700 people, and possibly more, are estimated to be in line for this increase, with many others on slightly higher pay levels also receiving a knock-on increase.  

“I hope that this increase, along with the other measures that will be announced as part of Budget 2023, will help to protect the lowest paid workers from the rising cost of living. Our objective is to put more money in people’s pockets and reduce the cost of living.

“Since 2015, the National Minimum Wage has increased from €8.65 per hour to its current rate of €10.50 per hour, and will now increase to €11.30 in January, 2023 keeping pace with inflation. I want to thank all the members of the Low Pay Commission for their considered recommendation and report.”

The increase in the National Minimum Wage will also mean that those working under certain conditions, under the ages of 18, 19 and 20, will receive corresponding increases in their pay, as they are entitled to a percentage of the full minimum wage rate.

The Tánaiste has asked the Low Pay Commission to examine youth rates and make recommendations on the issue next year.

The report of the Low Pay Commission in relation to the National Minimum Wage will be published later today.

Living Wage:

The Tánaiste also announced that the Low Pay Commission has set an indicative National Living Wage for 2023 of €13.10 per hour.

The Tánaiste said: “I want to move from a minimum wage to a living wage so that work pays more.  Earlier this year I received the Commission’s recommendations on phasing in a living wage for Ireland. And in June I outlined a proposal to introduce a living wage for all employees. 

“The Low Pay Commission has recommended setting a fixed threshold at 60% of the median wage.”

Officials are currently reviewing the responses to the recent public consultation on these recommendations and working with their colleagues across different Government departments to consider how best the Commission’s recommendations could be implemented. The Tánaiste will return to Government next month for final decision on the phasing in of a living wage.

Sick Pay:

The Tánaiste also announced that he will commence the Sick Leave Act on January 1, 2023. This Act will, for the first time, introduce an entitlement for all employees to sick leave paid by their employer in addition to illness benefit from the State.

The initial entitlement to statutory sick leave from employer will be up to three days’ medically certified leave in a year. Regulations will provide for this to be capped at 70% of gross pay subject to a daily maximum of €110. Illness Benefit is available from the Department of Social Protection from day 4 and for up to two years.

Speaking about the commencement of the Sick Leave Act, the Tánaiste said:

“Nobody should have to go to work when they are sick for fear of having no income. It’s not good for them or their co-workers. For the first time, there will be an entitlement for almost all employees to paid sick leave. The entitlement is based on the calendar year.

“This is a very important new right for all employees and was a personal priority for me as Minister. Given the current challenging business environment and inflation in particular, I have concluded that the fairest and most appropriate approach is to introduce the entitlement on January 1, 2023.”

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