MOST EMPLOYEES AGED between 15 and 19 receive more than the sub-minimum wage, according to new research from the Economic and Social Research Institute (ESRI).
The minimum wage in Ireland in 2023 is €11.30 per hour. However, current legislation allows employers to pay young workers a sub-minimum youth rate.
Those aged below 18 years can be paid 70% of the full, adult minimum wage rate. Those aged 18 years can be paid 80% of the full rate and those aged 19 years can be paid 90% of the full rate.
Sub-minimum youth rates in Ireland have received criticism by policymakers, both nationally and internationally, for being too low to ensure a decent standard of living for young people.
While all employees aged 15 to 19 could legally be paid a sub-minimum youth rate, just under one-quarter are actually paid this rate. The remaining three-quarters earn a higher wage, the ESRI study found.
Therefore, very few employees in Ireland are on a sub-minimum youth rate. Just one in every 140 employees earns a sub-minimum youth rate. This is equivalent to approximately 15,000 individuals.
Just over half (55%) of sub-minimum youth rate employees are women and 77% work in either the accommodation, food or retail sectors.
Approximately 80% of sub-minimum youth-rate employees classify themselves as students.
Legislation in Ireland also exempts apprentices, people employed by a close relative, and prisoners involved in non-commercial work from being paid minimum wage.
As a result, these groups can be paid below the full minimum wage rate.
An estimated 1,500 employees state that they are paid below the minimum wage due to being employed by a relative, while an estimated 6,500 indicate that they are apprentices.
It is estimated that another 6,500 employees report earning less than minimum wage for “other reasons”. This “other” category potentially captures individuals being paid below minimum wage illegally.
The ESRI said it has no data on the number of prisoners earning below the minimum wage.
“Sub-minimum youth rates in Ireland have received a lot of attention in recent months, as they have been criticised by some policymakers as being too low to allow a decent standard of living for young people,” report author Dr Paul Redmond said.
“Our research shows that very few employees are on a sub-minimum youth rate. Most young people who could legally be paid a sub-minimum youth rate are actually on higher pay. Of those that are on sub-minimum youth rates, the majority work in either accommodation, food or retail and most are students,” he said.
The research was carried out by the ESRI and funded by the Low Pay Commission.
Chairperson of the Low Pay Commission Ultan Courtney said: “The Low Pay Commission has been asked to make recommendations on these youth rates. We make evidence-based recommendations, and this research will be of great importance to us in our consideration of this important issue and will inform our recommendations.”
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