By Anne-Marie Walsh

Copyright independent

But unions claim a proposed 65c increase is not enough and another “slap in the face” to low-paid employees.

It is understood that the Government is considering a hike in the region of 55c to the €13.50-an-hour minimum rate in the Budget.

This would be lower than a Low Pay Commission recommendation of a 65c, or 5pc, increase.

Chair of the Irish Small and Medium Enterprises Association (Isme), Finbarr Filan, who is a Centra retailer and postmaster in Sligo, said the business group believes the minimum wage should be linked to inflation.

He added a 5pc increase would put “undue pressure on businesses” following substantial increases in recent years.

Today’s News in 90 Seconds – September 20th

“That’s just unsustainable for businesses,” he said.

Mr Filan added he fully understands why there is a need to increase salaries, but there was no point in doing this if a business did not remain viable.

“The minimum wage has become the floor from which businesses can employ people,” he said, adding it has a “step effect” that pushes up pay for workers across the country.

People have to start reading the tea leaves

“Most businesses are making -decisions to cut hours as they try to stay viable. We all want our staff to have a good standard of living but they have issues with housing, healthcare, childcare and energy costs, and we can’t keep forcing those costs back on businesses.

“We are now going from the best -little country in the world to do business to the most expensive country in the world to do business… People have to start reading the tea leaves.”

David Broderick, director of the Small Firms Association (SFA), said the proposed increase in the national minimum wage flies in the face of reality and would “suffocate” small businesses.

He said spiralling costs are impeding small businesses from hiring more staff and called for a temporary PRSI rebate in Budget 2026. “Many small businesses will not be able to cope with this latest hike in the minimum wage as it will raise all -other wage brackets on a pro-rata basis,” he said.

Meanwhile, Greg Ennis, Siptu deputy general secretary for the private sector, said an increase in the region of 67c would be “another slap in the face” from the Government to low-paid workers.

He said the Government promised these workers that a living wage would be achieved next year.

Mr Ennis claimed the Government misled workers by pushing this out to at least 2029 within weeks of being elected..

He said the Government may well push ahead with a €1bn tax cut by way of Vat reduction to employers within the hospitality sector. Mr Ennis said this was a sector notorious for low pay and poor terms and conditions of employment.

Meanwhile, Kathryn Walsh, director of policy at the National Youth Council of Ireland, said it is only fair that young workers paid below the minimum wage are supported if the hospitality sector benefits from a Vat reduction.