Minimum wage rise ‘could place businesses at risk’
A rise in the minimum wage due to come into effect next year could prove detrimental to many Irish businesses, it has been warned.
The Irish government has approved the Low Pay Commission recommendations to raise the minimum wage to €9.55 an hour from January 2018.
Taoiseach Leo Varadkar said around 150,000 employees across the country could benefit from the move.
But HR Team employment law specialist Breda Scott has warned that a rise will have serious implications for employers and in turn, the people they employ.
Ms Scott explains: “The proposed rise will see and overall increase in employment costs to firms with lower paid workers.
“For some small businesses already struggling, and who cannot pass on the rise in costs, it could be the straw to break the camel’s back
“What we could see, especially within sectors that historically employ low-wage workers - like retail and hospitality - is a cut to working hours, recruitment placed on hold and even the loss of jobs.
“Employers will want to maximise productivity in relation to employment costs and it’s vital they manage staff accordingly.”
At 30 cent, the hourly rise would represent a wage increase of 3%.
“We would urge all employers to take the appropriate steps in adjusting the salaries and wages of employees ahead of the January 2018 introduction of the new rate. Businesses need to ensure they stay compliant with employment legislation to avoid any risk,” Ms Scott added.
Employers looking for further information and advice can visit hrteamservices.com or contact HR Team on 0044 28 71 271882.