National Minimum Wage

Throughout Ireland, employers have a legal duty to pay their staff correctly and no less than the National Minimum Wage. How much they receive is dependent on their age.

It's vital you comply with the laws on the National Minimum Wage. Not doing so could mean you underpay your employees, face claims against you, and potential reputational damages to your business.

In this guide, we'll look at what the National Minimum Wage is, who's entitled to it, and how much they should be paid.

What is the National Minimum Wage?

The National Minimum Wage is the legal minimum hourly rate that employees must receive. This rate of pay applies to:

• Full-time
• Part-time
• Temporary
• Casual employees
• Seasonal workers

However, this doesn't stop you from paying your employees a higher wage.This legal entitlement comes under the National Minimum Wage Act 2000. It's vital you pay your employees correctly, failure to do so is against employment law.

What is the National Living Wage?

The National Living Wage is a new living wage that makes an acceptable standard of living possible. Ireland will begin this enforcing this pay in 2026, and those elligible will receive 60% of their median wage for any given year.

However, the National Minimum Wage will stay in place until it's fully phased in.

Who is entitled to the National Minimum Wage?

Most employees are entitled to the National Minimum Wage, however not everyone is. Ensure you know the difference so you work out the correct pay.

The below aren't entitled to receive this payment:

• Close relatives of the employer (if they're a sole trader). For example a spouse, civil partner, or parent.
• A craft apprentice under the Industrial Training Act 1967, or the Labour of Services Act 1987.

What are the National Minimum Wage rates?

There are different minimum rates of pay for employees depending on their ages. For example, workers aged over 20 and above must receive €11.30 per hour.

Other rates are as follows:

• Age 19: €10.17 per hour.
• Age 18: €9.04 per hour.
• Age under 18: €7.91 per hour.

These rates came into force as of January 2023. Remember, there are different rates of pay in certain sectors, more information can be found on the Government website.

National Minimum Wage increase from January 2024

From January 2024, the National Minimum Wage in Ireland will increase. For example, the new rate for people aged 20 or over will be €12.70 per hour.

Other increases are as follows:

• Age 19: €11.43 per hour.
• Age 18: €10.16 per hour.
• Age under 18: €8.89

What payments can be included in the National Minimum Wage?

There are several payments that are included within someone’s National Minimum Wage, for example normal gross wage or basic salary.

Other examples include:

• Normal gross wage or basic salary.
• Shift allowance.
• Any bonuses or commissions.
• Zero hours
• Board and lodgings (€1.01 an hour, or €26.07 a week respectively).

What cannot be included in the National Minimum Wage?

As well as knowing what's included, it's also important you know what to not include in someone's National Minimum Wage payment.

For example:

• Any expense payments.
• Shift premiums, including overtime, Sunday working, unsocial hours, or callouts.
• Tips or gratuities that are paid into a central fund.
• Pay in kind or benefit in kind.
• Payment received when someone is absent from work, for example holiday or sick pay.

Can you pay employees more than the National Minimum Wage?

Yes, employers can choose to pay their employees more than the Minimum Wage rate. However, any average hourly pay given to employees must not be less than the Minimum Wage rate.

This hourly rate of pay is calculated by dividing their gross pay by their normal working hours in their pay reference period. This is typically monthly or weekly - but must not be longer than one month.

You must select a pay reference period for each employee when they start employment with you. How long you use must be included within a written statement in their terms of employment.

Can an employee ask for a statement explaining their average hourly rate of pay?

Yes, an employee can request a statement regarding their average hourly rate of pay within the last 12 months. You must provide this to the employeeh within four weeks of the request being made.

Included in the statement should be:

• Details of their pay and what payments are included.
• Their working hours.
• Their average hourly pay.
• The minimum hourly rate of pay they're entitled to.

You must sign the statement and keep a copy of it for 15 months.

What happens if you cannot afford to pay employees the National Minimum Wage?

If your business is struggling and you cannot afford to pay your employees the National Minimum wage, you can make a claim to the Labour Court for an exemption.

If granted, you may be exempt from paying the minimum rate for between three months and one year. However - only one claim is allowed.

You must have the majority of your employees consent to the claim being made. As well as being able to show you're unable to pay the minimum wage without the exemption, and if you have to - you may need to dismiss members of staff.

What happens if you don't pay your employees the National Minimum Wage?

If you don't pay your employees the National Minimum Wage that they're legally entitled to, a claim may be made to the Workplace Relations Commission.

You must never victimise or dismiss an employee for asking to be paid the National Minimum Wage. If you dismiss someone for asking for a basic employment right, they may claim unfair dismissal.

As well as the above, you cannot lower an employee's working hours to avoid paying them more. Doing so may lead to more claims being raised against you, which could lead to financial damages to pay.

Get expert advice on the National Minimum Wage from Peninsula

As an employer, you must pay entitled employees the National Minimum Wage. This ensures you're complying with employment law and paying your staff for the work they do.

Failure to do so could lead to your employees being underpaid, claims being raised against you, and the potential for reputational damages to your company.

Peninsula offers 24/7 HR advice which is available 365 days a year. Want to find out more? Contact us on 0818 923923 and book a free consultation with one of our HR consultants.