Instead, States members agreed that the adult minimum wage and young person’s minimum wage would rise in line with inflation, to £8.70 per hour and £8.25 per hour respectively from January.
In 2018, the States agreed to the principle that the minimum wage should be increased in increments over five years so that it eventually reached 60% of the island’s median wage in 2023.
In March this year median earnings for islanders were found to be £34,409 per year.
Employment & Social Security president Peter Roffey said it could not ignore the warnings from businesses and it also did not want to freeze the minimum wage.
‘What we’re proposing today goes against the established policy of the States of Deliberation. However, we feel it’s the right thing in these circumstances.
‘We’re disappointed in many ways not to be suggesting the third of the five annual steps. If we had been it would have meant the minimum wage going up by 5.9% next year.
‘However we consulted widely and the feedback was overwhelming that not only would an increase in the minimum wage of that sort of magnitude cause difficulty for many industries in Guernsey, but in this particular Covid-impacted world of this year, it could actually post an existential threat to a number of businesses.’
The changes mean that the island’s adult minimum wage will be 34p higher than the rate in the UK, but 21p less than the UK’s living wage measure.
Deputy Roffey stressed that these were ‘exceptional times’ and he confirmed that they were not relinquishing efforts to help the lowest paid.
‘I do put it on record that it is not us abandoning the target of moving to the target of 60% of median earnings, it’s simply a one-year pause with the intention, although of course we will look at the circumstances of the time, but the firm intention is to resume that process next year and therefore reach that 60% target in 2024 instead of 2023.’
The vote was 37 in favour of the proposals, with two absences, and only Deputy Simon Vermeulen voted against it.