First published: October 4th 2022
Last updated: June 9th 2023
The Government signed off on an eighty-cent increase in the National Minimum Wage for 2023. From 1 January, 2023 the minimum rate of pay will go to €11.30 per hour.
For more information on Irish minimum wage rules see our guide here.
As well as minimum wage legislation, employers in certain industries must provide staff with minimum levels of pay and employment conditions as set out in any applicable Employment Regulation Order (ERO) or Sectoral Employment Order (SEO).
In this post, we take a look at minimum wage rates under EROs and SEOs……
What is an ERO?
An ERO is drawn up by a Joint Labour Committee (JLC). A JLC is made up of equal numbers of employer and worker representatives and aims to establish minimum working conditions for employees in certain sectors. Typically, the sector will have no history of collective bargaining and staff on low wages.
Once the terms are set, the ERO is adopted by the Labour Court, and given statutory effect by the Minister for Enterprise, Trade and Employment. Once in place, the ERO obliges employers in the relevant sector to pay the minimum wage rates and provide the prescribed conditions of employment to staff.
There are currently three EROs in effect.
Early Learning and Childcare Employment Regulation Orders
Two new EROs addressing the Early Years Services Sector came into effect on 15 September 2022. The new minimum rates of pay range from €13 per hour for early years educators to €17.25 per hour for graduate managers.
The ERO applies to approximately 27,000 staff and it is estimated that more than 70% of childcare workers have received a pay rise under the scheme.
Contract Cleaning Employment Regulation Order
A new ERO for the Contract Cleaning Industry came into effect on 1 April 2022. The new ERO replaced a 2020 version and raised the statutory minimum rate hourly rate for contract cleaners to €11.50. The ERO also provides for another increase to €11.90 per hour from 1 April 2023 and a further increase to €12.30 per hour from 1 April 2024.
Security Industry Employment Regulation Order
There has been an ERO in place for the Security Industry since 2017. A new ERO for the security sector was scheduled to come into effect on 29 August 2022. The new ERO included increases in minimum wage rates to €12.50 per hour from 29 August 2022 and €12.90 from 1 February 2023.
The new ERO has not come into effect as scheduled, however. Three smaller security companies secured an injunction preventing the ERO from taking effect pending the outcome of a judicial review hearing. The judicial review hearing is due to commence in early November.
What are SEOs?
SEOs are legally binding orders that require employers in specific sectors to provide staff with certain minimum rates of pay and pension contributions.
Following a request from a trade union or an employer’s organisation, the Labour Court can conduct an examination into the terms and conditions of employment relating to remuneration, sick pay and pension provision in relation to a particular sector of the economy.
The Labour Court can then make a recommendation to establish a SEO for that particular sector which needs to be given statutory effect by the Minister for Enterprise, Trade and Employment.
There are currently three SEOs one of which remains deadlocked in an ongoing legal battle.
Mechanical Engineering Building Services Contracting Sector Sectoral Employment Order
In effect since March 2018, this SEO sets the statutory minimum rates of pay for workers employed in the Mechanical Engineering Building Services Contracting sector. It also requires employers in the sector to establish pension and sick pay schemes.
Construction Sector Sectoral Employment Order
In effect since February 2022, this SEO sets the statutory minimum rates of pay for workers in the construction sector. Employers must operate in the construction sector under the SEO and workers are categorised into craftspeople, construction operatives, new entrant operatives and apprentices. It also requires employers in the sector to establish pension and sick pay schemes.
A Labour Court recommendation for new minimum pay and pension contribution rates for workers in the construction sector was formally approved in April 2023.
The new minimum rates of pay and conditions under the Sectoral Employment Order (SEO) for the construction sector will commence on 18 September 2023.
A further increase will take effect 5 August 2024. For further details on this SEO please see our summary here.
Electrical Contracting Sector Sectoral Employment Order
Although scheduled to come into effect since February 2022, this SEO remains in legal limbo. The SEO sets out the minimum rates of pay, pension and sick pay entitlements for workers and apprentices in the Electrical Contracting Sector but has not yet come into force.
Much like the recent legal action by smaller employers in the security sector, an association of electrical contractors, National Electrical Contractors Ireland (NECI) have been engaged in a long-running legal battle to prevent this SEO from coming into effect.
Most recently, the NECI have received notification from the Chief State Solicitor’s Office that the State will consent to an order of the High Court quashing the Electrical Contracting Sector SEO.
Minimum wage risks
It’s vital for employers to ensure they comply with minimum wage rules whether they fall under primary legislation like the National Minimum Wage Act or secondary legislation like EROs and SEOs.
Failing to adhere to the law could lead to expensive payment of wages claims. The WRC ordered employers to pay over €1.4 million in unpaid wages in 2022.
Peninsula’s employment law experts can help you manage national minimum wage payments, or any other questions related to employee pay.
Peninsula clients also receive bespoke workplace documentation and policies that are regularly updated in line with any changes in employment law.
Speak to one of our experts today on 1800 719 216.
