Minimum wage is reportedly set to increase on Budget Day

The minimum wage is reportedly going to rise and there are concerns over how smaller businesses will cope with the increases.

The government plans to increase the minimum wage by €1.40 to €12.70. Yet, according to the Irish Independent, financial measures to soften the blow for employers will also be introduced. The increase amounts to 12% on top of the current rate of €11.30.

The plans are in line with proposals made by the Low Pay Commission to the government earlier in the year.

The increase means that those working 39 hours a week would earn an additional €54.60 per week from the start of 2024.

The government is working on supporting smaller businesses with minimum wage increases.

The wage increase will come as a relief to those struggling with rising inflation, high-interest rates, and the multitude of factors brought about by the cost-of-living crisis.

However, there are concerns that small and medium-sized businesses will be disproportionally affected by the 12% increase, with government ministers working on a "mechanism" to support high energy rates and higher labour costs.

Amid the news of the increases, some smaller businesses have said they are looking to automation and raising their prices in order to cut costs.

The Irish Independent reports that the government is considering a commercial rates waiver or an extension of the Temporary Business Energy Support Scheme (TBESS) to help smaller businesses cope with rising costs.

Taoiseach Leo Varadkar said: "We’re looking at a mechanism whereby we can give some help to small businesses in particular in the Budget and that’s a recognition that small businesses in particular, they’re facing increased energy costs, they’re also facing a lot of increased labour costs, in part because of government decisions to increase the ­minimum wage and bring in things like statutory sick pay."

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