The Labour Court has recommended the increase, following conflicting submissions from employer and trade union groups.
The Irish Business and Employers’ Confederation (IBEC) had pressed for a freeze, warning that any increase would push up the cost of goods and services, “making Ireland even more expensive”.
The unions, including Mandate, representing shop staff, wanted the rate upped to E8.75 an hour, claiming the low-paid had not benefited from the Irish economic boom. However, those on the minimum wage were removed from the tax net in the last budget, making the current Irish rate the highest in the EU in net terms.
Since it was first introduced in 2000, at E5.59 an hour, there have been three increases in the Irish minimum wage. According to the Chambers of Commerce of Ireland, this fourth enhancement will cost Irish businesses an extra E250,000 an hour.
At present, because of a record low unemployment rate of around 4%, Irish supermarkets are already paying most staff well above the minimum wage, in a bid to retain them.
Part-time and immigrant workers stand to benefit most from the latest increase, though employers fear it could create pressure for wage improvements further up the scale.
The Labour Court’s recommendation has still to be approved by government, but that is regarded as a formality.
In Britain, the Low Pay Commission is due to report to government on the minimum wage at the end of this month, outlining recommendations for the future.