Further to the National Minimum Wage Order 2023, there has been an increase in the national minimum wage (NMW) which is applicable 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.

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