Government announces plans to replace current minimum wage with a new 'living wage'
The Tánaiste and Minister for Trade, Enterprise and Employment Leo Varadkar has outlined his proposal to bring in living wage to be phased in over the next 4 years starting next year.
Making the announcement on 14 June, the Tánaiste said that 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 (LPC) to conduct research and report to him on how best the government can progress to a living wage. The proposal announced in mid-June 2022 are based on 18 recommendations made by the LPC on the progression to a living wage.
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
The Tánaiste said that his intention to phase in the living wage is because of what he described as a really uncertain period ahead. He added that he will be will be listening to employers’ views on these draft proposals.
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