New National Minimum Wage from 1st February 2011

The new national minimum wage rate came into effect from the 1st February 2011 following the signing of the Financial Emergency Measures in the Public Interest (No.2) Bill 2010 by the Minister for Enterprise, Trade and Innovation, Batt O'Keeffe, on the 19th January 2011. The National Minimum Wage has decreased from €8.65 to €7.65 per hour as of the 1st February.

New National Rates

This new National Minimum Wage applies to all new experienced adult workers who commenced employment from the 1st February 2011. In relation to employees who are under the age of 18 and would not be classed as experiences workers the follow rates apply:

• Experienced Adult Worker: €7.65 per working hour
• Under the age of 18: €5.36 per working hour
• In the first year after the date of first employment over age 18, whether or not the employee changes employer during the year: €6.12 per working hour
• In the second year after the date of first employment over age 18, whether or not the employee changes employer during the year: €6.89 per working hour

Trainees undergoing a course undertaken during normal working
hours that satisfies statutory requirements:

• 1st one third period: €5.74 per working hour
• 2nd one third period: €6.12 per working hour
• 3rd one third period: €6.89 per working hour

Does the New Wage Apply to All New & Existing Employees?

While the new National Minimum Wage automatically applies generally to new employees, employers must be aware that existing employees who are contracted to work the current minimum wage of €8.65 will still be contracted to earn €8.65 and that the new minimum rate does not automatically reduce the rate to €7.65.
Accordingly, employers should be aware that if attempting to reduce an employee’s wage to the new minimum wage, their agreement should be sought first. An employee’s wage rate is a contractually agreed term and condition of their employment and as such, agreement should be reached before attempting to alter this.

In the same sense that an employee cannot unilaterally decide to increase his/her wage, an employer is not permitted to unilaterally reduce it without running the risk of employment claims being taken. This is a basic principle of contract law in the sense that one party to a contract agrees to offer work and the other party to the contract agrees to do that work for a in return for set monetary remuneration. Some contracts may have more flexible wording, however employers should take into account custom and practice before implementing such pay cuts for existing employees.