Tánaiste outlines proposal to bring in living wage for all

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Building on his work to date to improve terms and conditions for workers, the Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar recently outlined his proposal to introduce a living wage for all employees, starting from next year. He will now consult with various interested parties, including employer and worker representative groups, unions and the public on the draft plan.

Last year, the Tánaiste asked the Low Pay Commission to conduct research and report to him on how best the government can progress to a living wage. The recent proposals are based on these recommendations.

The Tánaiste said:

“Better terms and conditions for employees must be one of the legacies of the pandemic. The living wage will build on the programme of improvements we are making, from introducing mandatory sick pay, to auto enrolment for pensions, to putting in place the laws, regulations and infrastructure to give people more flexibility over how and where they work.

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“Thank you to the Low Pay Commission and NUI Maynooth for all their work and research. The proposal I am outlining is based on the LPC’s recommendations. It’s really important we get the balance right and I think this proposal achieves that, however I will be listening over the coming weeks for feedback before bringing a final plan to Government later this year.”

Proposal for introducing a living wage for all workers:

  • the living wage will be set at 60% of the median wage in any given year, which in 2022 would be €12.17 per hour. The national minimum wage is currently €10.50 per hour
  • the national minimum wage will remain in place until the 60% living wage is fully phased in, in 2026, but will increase over the years as usual, closing the gap between it and the living wage
  • from 2026, we will no longer have a national minimum wage, the living wage will be the floor and will be mandatory for all employers
  • depending on prevailing economic circumstances, it is proposed to give the Low Pay Commission discretion to introduce the full living wage faster or slower than the 4 years proposed

Research carried out by the National University of Ireland, Maynooth for the Low Pay Commission includes evidence that a statutory wage floor set at 60% of the median wage of all workers could be implemented without substantial effects on employment.

The Low Pay Commission’s report on the Living Wage, and the accompanying research report, are available at Publications from the Low Pay Commission (www.gov.ie)