Minimum wage rise could be brought in months early

It is proposing that the adult minimum wage rises by about £20 a week from £9.05 to £9.55 an hour from 1 October – three months before the uplift usually occurs.

The move to £9.55 equates to a salary of £19,864, based on a 40-hour working week, and is a 5.5% increase, set against the current cost of living of 5.9%.

The committee said that given it was an increase being made just nine months after the last rise, the cost of living over that period was 4.2%, and the move was also in line with the States’ intent to increase the minimum wage to 60% of median earnings, which is now set to happen in October 2024.

However it intends to put off plans to equalise the young persons’ minimum wage with the adult rate, instead settling for a 10% differential, which will see the wage for 16- and 17-year-olds rise from £8.60 to £8.95 rather than £9.25.

The proposed new rates will see the island’s minimum wage rates largely keep pace with the other Crown Dependencies and the UK.

A consultation exercise saw broad agreement on the proposal for the adult wage, though concerns were raised generally about the cost of living, and one representation noted the general acceptance that those on lower incomes should be supported, particularly at this time.

Views on the proposal for younger workers were more mixed and Economic Development came out against the higher rise, concerned that it might prove a disincentive to employers to offer jobs to under-18s.

ESS said that, by majority, it agreed that ‘a modest differential in pay on the basis of age can be justified and is appropriate’.

However the States will have the final say when the recommendations are debated in July or September.