Further to the National Minimum Wage Order 2023, there has been an increase in the national minimum wage (NMW) which came into force from 1 January 2024.
The NMW has increased for those who are 20 or over will increase
to €12.70 per hour. This then impacts the NMW for other
age groups. Accordingly the NMWs are as follows:
- For 19
year olds, €11.43 per hour (which is 90% of the NMW);
- For 18
year olds, €10.16 per hour (which is 80% of the NMW); and
- For
under 18 year olds, €8.89 per hour (which is 70% of the
NMW).
It is worth remembering that there are certain narrow exceptions to the
application of the NMW which are outlined in the National Minimum Wage Act
2000. The exceptions are where the employer is a sole trader, and employs
a spouse, parent, grandparent, child, step-child, step-parent, grandchild or
half-brother or half-sister. Otherwise there is an exception for those
defined as a craft apprentice within the meaning of the Industrial Training Act
1967, or the Labour of Services Act 1987.
On the other hand, there are certain sectors where there are specific
minimum rates of pay which will be higher than those outlined above.
In terms of calculating an employee’s hourly rate of remuneration,
remuneration includes the following:
- An
employee’s basic salary;
- Any
shift premiums;
- Piece
and incentive rates;
- Commission
and bonuses which are productivity related
- Board
and lodgings;
- Service
charges;
- Zero
hours payments.
The following cannot be included for the purposes of calculating of
remuneration:
- Overtime
premiums
- Call-out
and unsocial hours premiums;
- Service
pay;
- Any
tips or gratuities distributed and paid through the central pay role;
- Public
holiday premiums and Saturday and Sunday premiums;
- Allowances
for special or additional duties including those of a post of
responsibility;
- Expenses
such as travel allowances, subsistence allowances, tool allowances and
clothing allowances.
- On-call
or standby allowances
- 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
payment-in-kind or benefit-in-kind, except board with lodgings, lodgings
only or board only;
- Any
payment to the employee not made for their role 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 above serves as a brief reminder of the upcoming changes to the NMW
in Ireland which came into force on 1 January 2024 and how to calculate
remuneration for the purposes of determining an employee’s hourly rate.
For more on
this or any other Human Resources or Health & Safety issues you require
assistance on please do not hesitate to contact the HR Desk.
Kind
regards,
Cyril
Keegan
Manging
Director
HR Desk
Mobile:
086 737 1221 Office: 049 43 55969, Email: ckeegan@hrdesk.ie Web: www.hrdesk.ie
