National Minimum Wage
The National Minimum Wage Act 2000 became law on 1st April 2000. The Act applies to all employees, including full-time, part-time, temporary and casual employees except the following categories of employees who are excluded from its provisions:
(i) Close relatives of the employer such as a spouse, father, mother, son, daughter, brother and sister;
(ii) Apprentices within the meaning of the Industrial Training Act 1967 and Labour Services Act 1987 including an apprentice printer, bricklayer, mechanic, plumber, carpenter/joiner and electrician.
National Minimum Wage Rate
The national minimum wage rate at present is €9.55 (January 2018) for an experienced adult worker.
The Act provides that an experienced adult worker must be paid an average hourly rate of pay that is not less than the national minimum wage shown above in a pay reference period. A pay reference period may be a week, a fortnight or no longer than a month. For the purposes of the Act, an experienced adult worker is an employee who is not:
- under age 18 or
- in the first two years after the date of first employment over age 18, or
- a trainee undergoing a course that satisfies certain conditions which are set out below.
The gross reckonable pay earned by an employee in a pay reference period is divided by the employee’s working hours in that pay reference period. The average hourly rate of pay obtained must be not less than the minimum hourly rate of pay entitlement of the employee, as detailed in the Table below.
|Employee||Minimum Hourly Rate of Pay|
|From 1 January 2018|
|Experienced adult worker||€9.55|
|Under age 18||€6.69|
|*In the first year after the date of first employment over age 18, whether or not the employee changes employer during the year||€7.64|
|*In the second year after the date of first employment over age 18, whether or not the employee changes employer during the year||€8.60|
|In a course of training or study over age 18, undertaken in normal working hours
1st 1/3 period
2nd 1/3 period
3rd 1/3 period
NB Each 1/3 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. Minimum period of temporary exemption is 3 months and 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.
The above statutory minimum hourly rates of pay are gross amounts i.e. before
tax/PRSI is deducted.
The working hours of an employee for the purposes of the Act include,
- Any overtime hours worked in the pay reference period,
- Any time spent on standby in the workplace, and
- Any training time during normal working hours.
Working hours for the purposes of the Act, do not include,
- the time that an employee is absent from work on annual leave, sick leave, protective leave, adoptive leave, parental leave, while laid-off, on strike or time for which an employee is paid in lieu of notice.
Reckonable pay means those payments or benefits in kind that are allowable in calculating the average hourly rate of pay of an employee, in order to determine if the employee has been paid his/her minimum hourly rate of pay entitlement under the Act. The following reckonable pay components may be taken into account to determine an employee’s average hourly rate of pay in a specific pay reference period:
- Basic Pay.
- Shift premium.
- Piece and incentive rates, commission and bonuses which are productivity related.
- If an employee receives board and lodgings, board only or lodgings only from an employer, then the following amounts are reckonable:
- €0.85 per hour worked for board only (calculation at hourly rate)
- €22.56 for lodgings only per week, or €3.24 per day
- The amount of any service charge distributed to the employee through the payroll.
- Any payments under section 18 of the Organisation of Working Time Act, 1997 (zero hour protection).
- Any payment in respect of any of the above items advanced in a previous pay reference period that relates to the specific pay reference period.
- Any amount in respect of any of the above items earned in the specific pay reference period and paid no later than the next following pay reference period.
- In the case of an employee whose hours of work are not controlled by the employer, any amount in respect of any of the above items earned in the specific pay reference period and paid no later than the pay reference period in which the record of working hours is received or due to be received by the employer, or the pay reference period immediately after that.
The non-reckonable components of pay include:
- Overtime premium.
- Call-out premium.
- Service pay.
- Unsocial hours premium.
- Any amount distributed to the employee of tips or gratuities paid into a central fund managed by the employer and paid through the payroll.
- Public holiday premium, Saturday premium and Sunday premium, where any such holidays or days are worked.
- Allowances for special or additional duties including those of a post of responsibility.
- Any payment of expenses incurred by the employee in carrying out his or her employment, including travel allowance, subsistence allowance, tool allowance and clothing allowance.
- On-call or standby allowance.
- Any payments for or in relation to a period of absence of the employee from the workplace, such as sick pay, holiday pay, payment for health and safety leave under the Maternity Protection Act, 1994 & 2004 or pay in lieu of notice, but not including a payment made under section 18 of the Organisation of Working Time Act, 1997 (zero hour protection).
- Any payment by way of an allowance or gratuity in connection with the retirement or resignation of the employee or as compensation for loss of office.
- Pension contributions paid by the employer on behalf of the employee.
- Any payment referable to the employee’s redundancy.
- Any advance of a payment in the specific pay reference period relating to a subsequent pay reference period.
- Any payment-in-kind or benefit-in-kind, except board with lodgings, lodgings only or board only.
- Any payment to the employee otherwise than in his or her capacity as an employee.
- Any payment representing compensation for the employee, such as for injury or loss of tools and equipment.
- An amount of any award under a staff suggestion scheme.
- Any loan by the employer to the employee.
The criteria that a course of training or study must satisfy for the purposes of the Act, in order for an employer to pay an employee the trainee rates, are set out in appendix 1 on the next page. An employer, even if an employee changes his/her job, cannot pay an employee the trainee rates a second time unless the employee undergoes a course of training or study that is different in purpose or content from the previous training or study undertaken by the employee.
An employer must keep all records that are necessary to show whether this Act is being complied with in relation to an employee, for at least 3 years from the date any record is made. The records must be kept by the employer at the premises or place where the employee works, or if the employee works at 2 or more premises or places, the premises or place from which the activities of the employee are principally directed or controlled.
An employee may refer a complaint in relation to entitlements under the National
Minimum Wage Act 2000 to the Workplace Relations Commission.
An employee cannot refer a dispute to the Workplace Relations Commission unless the employee has written to the employer requesting a written statement of his/her average hourly rate of pay from the employer, in relation to a specific pay reference period or periods that are the subject of the dispute, and has either obtained that statement, or waited for the 4 weeks to elapse during which the employer is permitted to respond to the employee’s request.
An employee must refer the dispute to the Workplace Relations Commission within a period of 6 months from the date the employee obtained the written statement or, in the case where an employer fails to supply the written statement, within 6 months from the latest date the employer was obliged to supply the statement. This time limit may be extended to 12 months, at the discretion of a Workplace Relations Commission Adjudicator.
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