SFA: Rising National Minimum Wage talk is unwelcome

25th July 2018 | News

The Small Firms Association (SFA) has spoken out in advance of the Low Pay Commission (LPC) delivering its recommendations on Ireland’s National Minimum Wage (NMW) to Government.

The SFA, which is a proud supporter of over 8,500 small businesses and entrepreneurs across Ireland, believes the Government should not entertain the idea of increasing the NMW as it would fuel unnecessary business cost rises on growing small firms.

The LPC was said to be recommending a 30% increase to the hourly NMW later this year. This would equate to three times the level of increase recommended by the LPC in 2017, which was accepted by the Government at the time.

The Cabinet has since agreed to a 25% increase to the hourly NMW to €9.80 per hour, effective from January 2019. The Taoiseach, Leo Varadkar, said the increase represents the third rise in the NMW since the Government involving Fine Gael and the Independents came to office.

Although 120,000 workers will reportedly benefit from the NMW rise, the SFA has cited that recent minimum wage increases have added over €20,000 in costs to the average small employer’s payroll.

Sven Spollen-Behrens, Director, SFA, said: “Costs for small businesses are already shooting up. Government should not add fuel to the fire by imposing a further increase in the National Minimum Wage (NMW).

“We cannot repeat the mistakes of the recent past by allowing costs to get out of control in times of economic growth.

“In the three years since the establishment of the Low Pay Commission (LPC), the minimum wage has increased rapidly.

“For a small firm with ten minimum wage employees, their annual wage bill is more than €20,000 higher compared with 2015. This is crippling for many businesses, especially those impacted by [the UK’s impending departure from the European Union], active in low margin sectors or operating in rural areas.

“It is vital that in 2019 there is no further increase in the NMW rate.”