National Minimum Wage (Inclusion of Young Persons, Apprentices and Interns) Bill 2025: Second Stage
Seanad Éireann — 2025-12-17
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Alan Dillon (FG), Mayo

I thank all the Senators for their very insightful and important contributions to this debate. I congratulate Senator Cosgrove on the introduction of her first Bill to the Seanad, Senator Harmon on seconding it, all the Bill sponsors and those groupings who have supported this. I have no doubt significant effort, time and consideration went into the drafting of the Bill. We acknowledge that. This is an important issue. The subject of pay entitlements for young people, apprentices and those working as interns is really important. It is something that Government wants to continue to support.
When considering any changes to the national minimum wage regime, we have to make sure we strike the right balance between a fair and sustainable rate of pay for low-paid workers that does not have a significant impact, or negative consequences, for employers and competitiveness. In that regard, from the outset, it is important to note that the Government continues its commitment to fair wages, specifically for low-paid workers in our economy, and the very real progress it has made in raising the national minimum wage in recent years by way of substantial increases. I am astonished that no one has acknowledged the significance of the 33.7% increase since 2020 in the national minimum wage, from €10.10 to today's rate of €13.50. In 2024, we saw a significant uplift of 12%, or €1.40, in the minimum wage, while this year the minimum wage will increase by 80 cent, with an increase of over 6%. From 1 January next year, we will see the national minimum wage increase again by 65 cent, which represents a further 4.8% increase to €14.50. By any yardstick, that is significant and is recognition of our commitment to continue to support low-paid workers and ensure they get fair wages. These increases were and are ahead of inflation and projected wage growth and have brought about substantial real wage growth for low-paid workers in our economy. Our current rate of €13.50 an hour means that Ireland has the second highest minimum wage in the EU, second only to Luxembourg, and is among the highest in the world. That is recognition of where we have travelled since 2020. When we look at adjusted purchasing power standards, we have the fifth highest minimum wage in the EU.
The Bill proposes to make changes to the National Minimum Wage Act. The Government's view is that this a significant policy change in the operation of the Act as it is currently drafted and may be counterproductive to work under way at national and European level. On this basis, I propose that the House opposes the national minimum wage Bill 2025.
I will address the sections of the Bill separately to explain the rationale behind each of the recommendations provided. I will turn to the first group of workers that are the subject of this Bill, that is, young people. I acknowledge everyone who is in the Gallery tonight. Subminimum youth rates are the age-based regime of the national minimum wage, where those aged 19 and under can be paid a percentage of the national minimum wage. Employees aged 18 and 19 are entitled to a subminimum rate of 80% and 90%, respectively, of the overall national minimum wage. The subminimum rates for employees aged under 18 are set at 70% of the national minimum wage. The current regime of subminimum youth rates was introduced in recognition of the statutory restrictions on young workers' working hours and conditions, to protect youth employment and to avoid incentivising early school leaving.
We know that the majority of young people are not in receipt of these rates and are instead paid the full minimum wage. We also know that this is a very complex and nuanced issue. For example, the incidence of subminimum rates varies considerably among those of that age. Senator Joe O'Reilly referenced the statistic that five out of six employers do not pay the subminimum wage. If we look at those in receipt of those rates, we see that only 7% of those aged 19 receive the subminimum rate, but 46% of those aged 18 or under are paid that rate. There is a disproportionate concentration in different sectors and ceilings. We also know that subminimum youth rate employment is disproportionately concentrated in areas such as the accommodation, food and wholesale and retail sectors.
Earlier this year, as part of measures designed to support and build resilience in businesses and support competitiveness, the Government agreed to defer a decision on subminimum youth rates until 2029. This decision was considered in the context of the recent significant increases in the minimum wage. We should also remember that the current system of youth rates is based on a percentage of the full minimum wage. When the minimum wage increases, these subminimum rates also increase, with young people in receipt of those rates seeing a commensurate increase in their wages. My Department recently published an economic impact assessment of the Low Pay Commission's recommendations to abolish subminimum youth rates of the national minimum wage. That report echoes the Low Pay Commission's finding that this is a complex issue that will require the full deliberation and consideration of Government.
I will consider the treatment of apprenticeships under the National Minimum Wage Act. When the national minimum wage was introduced in 2000, it was determined that apprenticeships would be excluded from that Act. Apprenticeships were and continue to be excluded from the national minimum wage in recognition of the unique nature of apprenticeships and the fact that a long-established practice for determining rates, which adequately protects apprentices, exists. Apprenticeships offer a unique combination of education and work experience. When the national minimum wage was first introduced, it was recognised that providing an exemption for apprenticeships would promote and encourage employers to focus on training apprentices and offer opportunities for them while at the same time recognising the cost to employers in terms of time invested and productivity forgone.
Apprentices are employees and all of the 78 apprenticeship programmes are undertaken under a contract of employment. For the majority of apprenticeships, the rate of pay is agreed between the apprentice and the employer, with the employer paying the apprentice during both the on-the-job and off-the-job training elements. For the 25 craft apprenticeship programmes, the minimum rates of pay applying under the employment contract are either agreed within the relevant sector or are set out in legally binding sectoral employment orders recommended by the Labour Court.
I am fully aware of the importance of apprenticeships as an education and training route for our people, and of the importance of apprenticeships in our economy. Many have recognised that importance. The Government is strongly committed to continuing to grow and strengthen Ireland's apprenticeship system. We have demonstrated this with substantial investment in expanding apprenticeships in recent years, with investments of €67 million, €77 million and €79 million over consecutive budgets from 2024 to 2026. This amounts to a more than doubling of the annual allocation since 2020. This investment will deliver significant results. Annual apprenticeship registrations have increased from 5,326 in 2020 to 9,352 by the end of 2024. Furthermore, the Department of Further and Higher Education, Research, Innovation and Science is committed to developing a new action plan for apprenticeships to cover the period from 2026 to 2030. This new action plan, which is a programme for Government commitment, has a headline target of 12,500 annual apprenticeship registrations by 2030, with approximately two thirds concentrated in craft and construction-related disciplines.
A public consultation will seek the views of all stakeholders on how the system can be improved and then made more inclusive and better aligned to our national skills needs. That will commence shortly. We want to hear back from the sectors that desperately need these skilled apprenticeships and very much hope this will be an inclusive consultation process. Any evidence submitted as part of this consultation will inform the development of the action plan and the development of evidence-based policy on the exemption of apprentices from the national minimum wage.
The final category of workers covered by the Bill is interns. The Government believes all workers should be rewarded for the work they perform and that no individual should be exploited by performing work and not being rewarded fairly. The Government strongly believes genuine internships, based on a training opportunity, can be mutually beneficial for interns who gain first-hand real-world experience, and for employers who gain from having another individual to perform tasks, often with a fresh perspective in the case of current students and recent graduates. It is important to protect genuine internships and, in this regard, we have been careful with any legislative change we consider. I understand the Private Members Bill is particularly concerned with arrangements where a person is undertaking work of benefit to an enterprise or other host organisation with the danger that such internships could be exploitative. Arrangements which may be described as internships are not defined by Irish legislation. The designation "intern" by itself has no bearing on the determination of the employment status of an individual engaged. Under current employment law, a person is either a trainee, a volunteer or an employee, where employees are protected by the National Minimum Wage Act and are accordingly entitled to the protections of that Act. Therefore, while the Government acknowledges the intent of this Bill, it does not necessarily provide any additional and enforceable rights to interns not already available in the current legislation.
All individuals engaged under a contract of employment are covered under the National Minimum Wage Act 2000 and are thus entitled to the national minimum wage. An important point is that a contract of employment is defined as any contract, however it is described, whereby an individual agrees with another person to do or to perform personally any work or service for that person or a third person. There is no exemption in law from the obligation to pay the rates laid down in the National Minimum Wage Act when actual work is being performed. Therefore, national minimum wage rates apply to work experience placements, work trials, internships and any other employment practice, regardless of the duration of the engagement. The right to receive the minimum wage when work has been performed cannot be waived in a contract, and any provision in an agreement to do so is void as a matter of law.
It is also important I highlight the work being done at EU level on the EU traineeship directive. The Commission proposed the directive in March 2024 with two objectives: to improve and enforce the working conditions of trainees as workers and to combat regular employment relationships being disguised as traineeships. For Ireland, it is important the directive does not create a third category of worker. A trainee with an employment contract or employment relationship is entitled to the suite of employment protections, the same as any other employee. We want to ensure the directive does not create a third category of worker which could entitle trainees to fewer or greater employment protections when compared with others.
While the intent of this Bill is commendable and its subject matter deeply important, we must ensure the legislative response is robustly assessed, informed by evidence and provided for within an appropriate legislative framework. It is for these reasons I have recommended this Bill be opposed. Given the reasons I have outlined, particularly the recent Government decision on subminimum youth rates of the national minimum wage, the forthcoming public consultation on and development of the action plan for apprenticeships, the current protections of interns and the negotiation of the EU traineeship directive, I urge the House to reject the National Minimum Wage (Inclusion of Young Persons, Apprentices and Interns) Bill 2025.

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Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/seanad/2025-12-17/debate/main
Retrieved: 2026-08-14T04:54:28+00:00
Sitting date: 2025-12-17