Members will be all to aware that our labour costs remain our most significant expense, and that the past four years have seen unprecedented additional costs to the hourly rates awarded to employees by the Low Pay Commission. The NMW in 2020 was €10.10(previously €9.80), and now stands at €13.50, almost 34% more, yet CPI was 22% (source CSO).
These awards that have an almost immediate “ripple” effect throughout much of our workforce who are renumerated in excess of the National Minimum Wage but wish to maintain their “differential” to those that are on the NMW.
What we know for certain is that, from January 1st 2026, those employees aged between 23 and 60, who do not have a work pension scheme and who are earning annually in excess of €20,000 will be enrolled automatically into the new system (Auto Enrolment).
What we also know is that employers must, by law, contribute 1.5% of the employees’ gross earnings to this pensions pot. We also know that employees who are now obliged (for the first six months) to have 1.5% of their gross wages docked will have a reduced pay packet unless there is an increase in their hourly rate.
We know that if there is to be a change to the NMW it has been always set to come in Week one of the New Year. While the deliberations and recommendations of the Low Pay Commission are not generally known until the Budget in October, the Association, and practically all other employers representatives made it clear to the LPC that for a variety of reasons, the increases recommended for 2026 must be tailored to account for the introduction of Auto Enrolment and its effect on payroll costs, must not exceed inflation and have due regard to the uncertainty and volatility of trade in general, and our service sectors in particular.
We note that a Joint Labour Committee (JLC) for the Security Industry agreed an increase, with effect from August 1st 2025 in the hourly rate of 91cent (up from €14.50 per hour to €15.41 per hour).
This is in excess of 6.25%, and if applied to the NMW would translate into an 85 CENT additional hourly rate, which will, we remind you, have the AE contribution to be added to the entire gross salary. The effect of such an increase would make it extremely difficult for an industry that is struggling to cope with a Cost of Living AND Cost of Doing Business crisis.
We are sending you separately a Survey designed to influence Fine Gael policymakers to accelerate reliefs and reduce costs as a balance against some of the pain inflicted to our sector.
We urge you to take the time to respond.
