Around 80% of an estimated 15,000 teenagers who are paid the sub-minimum wage “youth” rate are students, according to new research.
The study also found that three-quarters of teenagers who could legally be paid the sub-minimum wage rate are receiving higher pay.
The minimum wage in Ireland is €11.30 per hour, but young workers can legally be paid the sub-minimum “youth rate”.
Those aged below 18 can be paid 70% of the “full” minimum wage rate, those aged 18 can be paid 80% of the full rate, while those aged 19 can be paid 90% of the full rate.
In its pre-Budget submission, the National Youth Council of Ireland called for an end to youth minimum wage rates and argued that Ireland is one of four EU countries to have such age-based rates.
It said that an 18-year-old in the same 35-hour-a-week job as a 20-year-old will earn €4,000 less over a year under these rates.
A new study funded by the Low Pay Commission and carried out by the Economic and Social Research Institute (ESRI) examined employees being paid below the national minimum wage.
It found that while all employees aged 15–19 could legally be paid the sub-minimum youth rate, just under a quarter are paid it, with the rest on a higher rate.
According to the research, one in every 140 employees, or around 15,000 people, earn a sub-minimum youth rate.
Around 80% of this group of employees classify themselves as students.
Just over half of sub-minimum youth rate employees are women and 77% work in either the accommodation, food, or retail sectors.
Legislation in Ireland also exempts apprentices, people employed by a close relative, and prisoners involved in non-commercial work from being paid minimum wage, meaning they can be paid below the full minimum wage rate.
An estimated 1,500 employees state that they are paid below the minimum wage due to being employed by a relative, while an estimated 6,500 indicate that they are apprentices, according to the research.
It is estimated that another 6,500 employees report earning less than minimum wage for “other reasons”, potentially capturing individuals being paid below minimum wage illegally.
The ESRI said it has no data on the number of prisoners earning below the minimum wage.
An author of the report, Dr Paul Redmond, said: “Sub-minimum youth rates in Ireland have received a lot of attention in recent months, as they have been criticised by some policymakers as being too low to allow a decent standard of living for young people.
“Our research shows that very few employees are on a sub-minimum youth rate.
“Most young people who could legally be paid a sub-minimum youth rate are actually on higher pay. Of those that are on sub-minimum youth rates, the majority work in either accommodation, food, or retail and most are students.”
Ultan Courtney, chairperson of the Low Pay Commission, welcomed the publication of the report.
“The Low Pay Commission has been asked to make recommendations on these youth rates,” he said.
“We make evidence-based recommendations, and this research will be of great importance to us in our consideration of this important issue and will inform our recommendations.”
The minimum wage will increase to €12.70 per hour from January 1st as part of Budget 2024, meaning the corresponding youth rates will also rise.
By Gráinne Ní Aodha, PA
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