Minimum wage set to increase in new year

The National Minimum Wage is set to increase to €11.30 per hour from January 1, 2023.

The new rate 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 and Minister for Enterprise, Trade and Employment Leo Varadkar made the announcement after the Government accepted the recommendation of the new pay rate by the Low Pay Commission.

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.

“We want to reward work and ensure that work pays more," the Tánaiste said. "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 the 1st of January. 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.

Referring to the 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.