National minimum wage to increase from February 1

Over 127,000 workers in Ireland are set to benefit from a rise in the national minimum wage, after the government said it would increase it from next month.

The national minimum wage will increase from €9.80 to €10.10 from February 1. The government said this is due to “the strong growth in earnings across the economy over the last year and thanks to greater clarity in the UK regarding their plans for Brexit”.

In October last year, the government accepted the proposal to increase the minimum wage by 30 cent per hour. This followed the recommendation of the Low Pay Commission, an independent body tasked with examining the appropriate rate of the statutory minimum wage. However, a decision was taken then to postpone any increase until there was greater clarity regarding Brexit and the ability of business to absorb an increase.

The Minister for Employment Affairs and Social Protection, Regina Doherty TD said: “With this most recent increase in the National Minimum Wage, an employee on minimum wage who works a full 39-hour week will now receive an additional €11.70 per week, or an extra €608.40 gross per year. In fact, since 2016, a minimum wage employee working a 39-hour week has received a gross pay increase of €2,331.”

Ms. Doherty added: “Since 2015, we have increased the minimum wage by 13.2 per cent – ahead of the rate of inflation – thereby ensuring real increases in the earnings of the lower paid. All types of work should pay well and it is my determination that a job should really lift people out of poverty. The ongoing increases in the minimum wage help to ensure that happens.”

In order to ensure that the increase in the minimum wage does not result in employers attracting a higher level of PRSI charge solely due to this increase, the employer PRSI threshold will increase from €386 currently to €395 from February 1, 2020.