Retail body opposes move to remove lower than minimum wage rates for under 20s

Retail Excellence Ireland (REI), the largest representative body for the retail industry in Ireland, has called for the retention of the existing lower than minimum wage rates for those under 20.

Jean McCabe, CEO of REI, appeared along with Neil McDonnell, CEO of ISME before the Joint Committee on Enterprise, Trade and Employment on Wednesday on foot of the Low Pay Commission recommending the abolition of sub-minimum rates.

The National Minimum Wage acts currently allow for lower, or sub-minimum rates, for those aged under 20. The minimum wage for those aged 19 is 90% of the prevailing rate, for those aged 18 it is 80% and for those aged 17 and under it is 70%.

Ms McCabe said that the recent increase in the national minimum wage, along with several other rising costs, had had a significant negative impact on retailers, and the abolition of sub-minimum rates would have a similarly detrimental effect.

She said: “Sub-minimum rates are a critically important part of the retail environment in Ireland. Not only do they allow companies to manage labour costs, but they also provide crucial opportunities and learning experiences for younger workers. Early work experiences provide a very useful platform for young people to learn how to engage in a work environment, deal with customers, develop soft skills and a strong work ethic.”

She added: “If we removed sub-minimum rates, then employers may face a domino effect of more experienced staff requesting higher wages to reflect their seniority, adding to financial strain for already stretched businesses.”

She said that abolishing the rates would also deter employers from employing inexperienced personnel, therefore impacting on future career opportunities.

REI made a number of recommendations to the committee, including:

Develop programs to support businesses in hiring and training young workers.

Evaluate the effectiveness of the current LPC structure and decision-making process to ensure recommendations are made with full consideration of their wider economic and social impacts.

Engage with educational institutions and bodies like Solas to understand how reduced part-time work opportunities might impact students' career readiness and develop strategies to mitigate potential negative effects.

“By taking a more comprehensive, nuanced approach to youth employment and wage regulations, we can better support both young workers and the businesses that provide crucial early career opportunities,” Ms McCabe said.