Govt should reject proposed minimum wage increase - SFA

The Small Firms Association has called on the Government to reject the proposed increase in the national minimum wage in the forthcoming budget to help small businesses cope with rising labour-related costs.

In its pre-budget submission, the SFA said there is a critical need to halt further wage hikes proposed by the Low Pay Commission to ensure the survival of viable enterprises.

In July, it was reported that the Low Pay Commission had recommended that the minimum wage should increase by 5.6%.

If the proposals are accepted by the Government, it would see the rate rise by 79 cent an hour from €14.15 to €14.94.

In its submission, the SFA said that the minimum wage has moved from €9.15 in 2016 to €14.15 in 2026.

"While the national minimum wage increased by 54.6% in the same period, the Consumer Price Index (CPI) increased by roughly 25% cumulatively from 2016 to 2026," according to the SFA.

SFA Director David Broderick said Budget 2027 must not include another increase in the minimum wage.

"The Minister must reject the proposed increase by the Low Pay Commission to allow small businesses to better cope with ongoing increases in labour-related costs in recent years," Mr Broderick said.

Business group Ibec has described the proposed increase as extremely concerning for employers as it is nearly double what some companies can afford or anticipated.

In its Pre-Budget Submission, the Irish Congress of Trade Unions (ICTU) called for a €1 increase in the minimum wage.

ICTU said that if the Government is serious about people's living standards it has to end gimmicks and giveaways, and invest in the workers that make the country run.