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What You Should Know

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National Minimum Wage

The National Minimum Wage applies to all employees, including full-time, part-time, temporary and casual employees, except the following categories or employees who are excluded from its provisions:

  • Employees who are close relatives of the employer, such as a spouse, father, mother, son, daughter, brother or sister;
  • Employees undergoing structured training such as an apprenticeship (other than hairdressing apprenticeships)

For the purposes of the Act, the following payments are regarded as wages:

  • normal basic pay, as well as any overtime
  • shift allowances or other similar payments
  • any fee, bonus or commission
  • any holiday, sick or maternity pay
  • any other return or payment for work (whether made under the contract of employment or otherwise),
  • any sum payable to an employee in lieu of notice of termination of employment.

The following payments are not regarded as wages:

  • any payment of expenses incurred by the employee in carrying out his/her employment
  • any payment by way of a pension, allowance or gratuity in connection with the death, retirement or resignation of the employee or as compensation for loss of office
  • any payment referable to the employee's redundancy
  • any payment to the employee otherwise than in his/her capacity as an employee
  • any payment in kind or benefit in kind.

The current (and previous) National Minimum Wage rates as they apply to certain categories of employees are listed in the table below -

Employee

NMW Hourly Rates from 1st January 2017

NMW Hourly Rates from 1st January 2016

Minimum Hourly Rate of Pay (01/07/2011 - 31/12/2015)

 % of NMW

Experienced Adult Worker

€9.25

€9.15

€8.65

100% 

Under age 18

 €6.48

€6.41

€6.06

70% 

In the first year after the date of first employment over age 18, whether or not the employee changes employer during the year *

 €7.40

€7.32

€6.92

 80%

In the second year after the date of first employment over age 18, whether or not the employee changes employer during the year *

 €8.33

€8.24

€7.79

 90%

In a course of training or study over age 18, undertaken in normal working hours **

First 1/3rd period

 €6.94

€6.86

€6.49

 75%

Second 1/3rd period

 €7.40

€7.32

€6.92

80%

Third 1/3rd period

 €8.33

€8.24

€7.79

 90%

NB - Each 1/3rd period must be at least 1 month and no longer than 12 months.

Experienced adult worker named by the Labour Court in granting a temporary exemption to an employer from paying the national minimum hourly rate of pay.

NB - The minimum period of temporary exemption is 3 months and the maximum period is 12 months.

Labour Court will decide the lower hourly rate of pay that the employee must be paid for the period of the temporary exemption.

* Employment experience prior to age 18 is not taken into account for these rates.

** Training must be as prescribed by the Minister in regulations.
(Please see S.I. No. 99/2000 - National Minimum Wage Act, 2000 (Prescribed Courses of Study Or Training) Regulations, 2000)

The National Minimum Wage Act may be viewed or downloaded HERE.

The Order setting the new National Minimum Wage rates from 1st January 2016 may be viewed HERE.

The Order giving effect to the New National Minimum Wage Rates from 1st January 2017 is available for viewing or download HERE.

Sunday Premium

If not already included in the rate of pay, an employee is generally entitled to paid time off in lieu or a premium payment for Sunday working.

An employee is entitled to the premium payment for Sunday working payable to a comparable employee in a collective agreement in force in a similar industry or sector. This means that the Sunday premium, if not already paid, will be equivalent to the closest applicable collective agreement which applies to the same or similar work under similar circumstances and which provides for a Sunday premium.

The premium can be in the form of:

  • An allowance
  • Increased rate of pay
  • Paid time off
  • Combination of the above.

PayslipPayslips

Employers are obliged to arrange that a written statement of wages be given to every employee with every payment of wages. If wages are paid by credit transfer, the statement of wages should be given to the employee as soon as possible after the credit transfer has taken place, In every other case, the statement of wages must accompany the wage payment.

Every statement of wages must show the gross amount of the wages payable to the employee and itemise the nature and amount of each deduction. The Payment of Wages Act places an obligation on the employer to treat the information contained in a pay statement with confidentiality.

A statement of wages which includes an error or omission is a valid statement of wages providing it can be shown that the error or omission was due to a clerical mistake or was made otherwise accidentally and in good faith. 

Deductions

An employer is allowed to make the following deductions from an employee’s wage:

  • Any deduction required or authorised by law (e.g. PAYE or PRSI)
  • Any deduction authorised by the term of an employee's contract (e.g. pension contributions, or particular till shortages)
  • Any deduction agreed to in writing in advance by the employee (e.g. health insurance subscription, sports and social club membership subscription) 

Special restrictions are placed on employers in relation to deductions (or the receipt of payments) from wages, which -

  1. arise from any act or omission of the employee (e.g. till shortages, bad workmanship, breakages), or
  2. are in respect of the supply to the employee by the employer of goods or services which are necessary to the employment (e.g. the provision or cleaning of uniforms).

Any deduction (or payment) from wages of the kinds described at a. or b. above must satisfy the following conditions -

  1. the deduction (or payment to the employer) must be provided for in the contract of employment in a term whether express or implied and, if express, whether oral or in writing
  2. the amount of the deduction (or payment to the employer) from wages must be fair and reasonable having regard to all the circumstances including the amount of the wages of the employee,
  3. the employee must be given at some time prior to the act or omission, or the provision of the goods or services, written details of the terms in the contract of employment governing the deduction (or payment to the employer) from wages. When a written contract exists, a copy of the term of the contract which provides for the deduction or payment must be given to the employee. In any other case, the employee must be given written notice of the existence and effect of the term.

Any deduction (or payment to the employer) arising from any act or omission of an employee, in addition to meeting the requirements set out at (I) to (iii) above, must satisfy the following conditions:

  1. the employee must be given particulars in writing of the act or omission and the amount of the deduction (or payment) at least one week before the deduction (or payment) is made,
  2. the deduction (or payment) must be made no later than 6 months after the act or omission became known to the employer. However, if a series of deductions (or payments) are to be made in respect of a particular act or omission, the first deduction (or payment) in the series must be made within the 6 month period.

Where an employer makes a deduction from wages (or receives a payment from the employee) to compensate for loss or damage arising from any act or omission of the employee, the deduction must comply with the conditions set down at (i) to (v) above. In addition, the deduction (or payment):

vi. must be of an amount not exceeding the loss or damage sustained by the employer,

A disciplinary fine, where provision for such is made in the contract, may be deducted as well as a deduction for loss or damages. Any such fine would, of course, be subject to the conditions set down at (i) to (v)

Any deduction (or payment to the employer) from wages for the supply to the employee of goods or services which are necessary to the employment must meet with the requirements set out at (i) to (iii) above. In addition, any such deduction (or payment) must comply with the following conditions:

  1. the deduction (or payment) must not exceed the cost to the employer the deduction (or payment) must not exceed the cost to the employer of providing the goods or services. In other words, the employer should not stand to profit by the sale of the goods or services to the employee,
  2. the deduction (or payment) must be made no later than 6 months after the supply of the goods or services to the employee. However, if a series of deductions (or payments) are to be made in respect of the supply of a particular good or service, the first deduction (or payment) in the series must be made within the 6 month period.

NOTE - Non-payment of wages or any deficiency in the amount of wages properly payable by an employer to an employee on any occasion will be regarded as an unlawful deduction from wages unless the deficiency or non-payment is attributable to an error of computation.

Joint Labour Committees

Joint Labour Committees (JLCs) are bodies established under the Industrial Relations Acts to provide machinery for fixing statutory minimum rates of pay and conditions of employment for particular employees in particular sectors. They may be set up by the Labour Court on the application of (i) the Minister for Jobs, Enterprise and Innovation, or (ii) a trade union, or (iii) any organisation claiming to be representative of the workers or the employers involved. A JLC is made up of equal numbers of employer and worker representatives appointed by the Labour Court and a chairman and substitute chairman appointed by the Minister for Jobs, Enterprise and Innovation. JLCs operate in areas where collective bargaining is not well established and wages tend to be low.

Employment Regulation Orders

An Employment Regulation Order (ERO) is an instrument drawn up by a Joint Labour Committee (JLC), adopted by the Labour Court, and given statutory effect by the Minister for Jobs, Enterprise and Innovation. The ERO fixes minimum rates of pay and conditions of employment for workers in specified business sectors: employers in those sectors are then obliged to pay wage rates and provide conditions of employment not less favourable than those prescribed.

Where an ERO applies, a prescribed notice must be posted up in the place of employment setting out particulars of the statutory rates of pay and conditions of employment for the sector.

An employer of workers to whom an Employment Regulation Order applies must keep records of wages, payments, etc., and must retain these records for three years.

Any breaches of an Employment Regulation Order may be referred to the Workplace Relations Commission for appropriate action.

The Employment Regulation Orders listed below are currently in force -

Title Effective Date
Employment Regulation Order (Security Industry Joint Labour Committee) 2017 (S.I. 231 of 2017) 1st June 2017
Employment Regulation Order (Contract Cleaning Joint Labour Committee) 2015 (S.I. 418 of 2015) 1st October 2015
Employment Regulation (Amendment) Order (Contract Cleaning Joint Labour Committee) 2016 (S.I. 548 of 2016) 27th October 2016

A Registered Employment Agreement (REA) is a collective agreement made either between a trade union or unions and an individual employer, group of employers or employers’ organisation, which relates to the pay or conditions of employment of specified workers. The effect of registration is to make the provisions of an REA binding. An REA can deal with any matter that comes under the general heading of pay or conditions of employment. An Agreement may provide for the variation of any of its provisions. Each REA must contain a disputes procedure that is binding. Any contraventions of a Registered Employment Agreement may be referred to the WRC for appropriate action.

On foot of a request, from a trade union of workers, a trade union or an organisation of employers, or a trade union of workers jointly with a trade union or an organisation of employers, to the Labour Court, it can carry out an examination of the remuneration, sick pay or pension scheme of workers in a particular economic sector.

The Labour Court, having considered the applicable economic factors may make a recommendation to the Minister for Jobs, Enterprise and Innovation to make a “sectoral employment order” for such matters as remuneration (overtime, unsocial hours, Sunday working, travelling time etc.), pension or sick pay scheme. If there is a difference in pay rates or less favourable pension scheme or sick pay scheme between a contract and a sectoral employment order the greater amount of pay or better pension scheme or sick pay scheme will apply.

Joint Industrial Councils

Joint Industrial Councils (JICs) are voluntary negotiating bodies for particular industries or parts of industries that are representative of employers and trade unions. A Council, provided that it fulfils certain conditions, may register with the Labour Court as a Joint Industrial Council under the Industrial Relations Acts. The rules of such Councils must provide for the referral of disputes to the Council for consideration before resort is made to industrial action. A registered JIC may request the Labour Court to appoint a chairperson and secretary to the Council.

Methods of Payment

Under the Payment of Wages Act, 1991, the following methods of payment, among others, are permitted -

  • a cheque or bank draft drawn on any of the commercial banks or a Trustee Savings Bank
  • a Payable Order or Warrant, issued by a Minister of the Government, Local Authority, etc.
  • a Postal Order, Money Order or Payable Order Warrant issued by or drawn on An Post
  • a credit transfer to an account specified by the employee
  • cash

Employers are required to make alternative arrangements for wage payment where a strike or other industrial action affects a financial institution and as a result of which cash is not readily available to employees who are paid wages other than in cash. In such circumstances, wages may be paid with the employee's consent by another one of the legally acceptable modes of wage payment (other than cash) listed in Section 2(1) of the Act. Otherwise, the employer must pay the wages in cash.

 
 
 
 
 
 

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