The Convenience Stores’ and Newsagents’ Association (CSNA) has expressed concern that the increase in the minimum wage – planned by the Low-Pay Commission (LPC) for next year – will be unaffordable for many small businesses.
The LPC is expected to recommend to the government that it increase the minimum wage by 12% next year.
If implemented, this would be a rise of €1.40 an hour, bringing the rate from €11.30 to €12.70.
Living Wage
Last year, the government announced plans to introduce the new national Living Wage to replace the minimum wage by 2026.
This will be phased in over a four-year period, starting this year, and set at 60% of the hourly median wage.
Vincent Jennings, CEO, CSNA, pointed out that a 12.4% increase in the National Minimum Wage (NMW) will increase the annual gross-wage bill for an employee on 39 hours per week on the NMW by €2,840, plus PRSI.
This additional cost to employers’ gross-wage bill excludes the cost of the St Brigid’s Day public holiday, introduced this year, and the contingent cost of an additional two days’ statutory sick pay.
The government has also indicated its intention to introduce auto-enrolment – an action that will cost all employers in providing for this – in 2024.
‘Ripple Effect’
Jennings, who is a former LPC commissioner of six years, expressed a concern that the “ripple effect” will come into play if an increase of this magnitude is adopted.
“It is well known that the majority of workers peg their earnings to a benchmark. In this case, a benchmark is the NMW.
“Anyone currently earning €12-14 per hour will feel justified in seeking to maintain that differential, and so a knock-on effect across our sector can be anticipated. Taoiseach Leo Varadkar – when, as Tánaiste, was commending the Living Wage Report – suggested as much, that increases to the NMW improves the earnings of many tens of thousands more,” he added.
“The LPC’s recommendation should reflect the ability of small employers to pay realistic, affordable rates of pay. It is unfortunate that the current composition of the LPC does not have anybody representing small and medium-size enterprises.
“Our members are responsible employers and will not disregard sensible increases to the NMW once they are based on discernible facts. Increases that are two and three times greater than inflation make it difficult for us to see that the Low-Pay Commission is acting in everyone’s interest.”
Read More: Living Wage: Employers Are Becoming Increasingly Concerned, Warns CSNA
© 2023 Checkout – your source for the latest Irish retail news. Article by Donna Ahern. For more retail news, click here. Click subscribe to sign up for the Checkout print edition.
