Employment & Social Security wants to make it illegal for employers to pay anyone over the age of 18 less than £10.65 an hour from 1 October. The current minimum is £9.55 an hour.
The proposals are out to consultation, with a States debate expected in July.
‘The committee recognises that this is a high percentage increase. However, it also notes that in recent years Guernsey’s minimum wage rates have fallen behind those of other comparable jurisdictions,’ said ESS president Peter Roffey.
Jersey’s minimum wage is already £10.50 an hour and is due to be increased in November. The UK’s national living wage has been £10.42 since April.
‘There is a statutory duty to consult, but to change our mind about the proposed rates there would need to be a fairly overwhelming response to the consultation, with evidence of the damage that this change would do to the economy,’ said Deputy Roffey.
ESS also wants to increase the minimum wage for workers under the age of 18, but only in line with the latest annual inflation rate of 8%, after the States agreed last year to abandon its policy of equalising the adult and young persons’ rates.
The latest proposed increase in the adult rate would be the penultimate step in a five-year plan of setting the minimum wage at 60% of median earnings. Median earnings are currently just under £39,000 a year. But the five-year plan was paused during the Covid pandemic.
‘Guernsey is not doing anything extraordinary here,’ said Deputy Roffey.
‘The whole point of doing this over a five-year period was so that employers had warning in advance.
‘We’d quite like the minimum wage rate to be as high as possible without damaging the economy or causing job losses. We’re confident 60% of median earnings doesn’t go too far.’
An adult minimum wage of £10.65 an hour from October would lift the rate to £1.30 an hour higher than if it had been increased only by inflation since the five-year plan was agreed in 2018, an additional £2,700 a year for a 40-hour week.
‘Our suspicion is that very few people are actually paid the minimum wage, but some are, and it’s an important indicator of what as an island we consider unacceptable wages,’ said Deputy Roffey.
Jersey’s States agreed last year to legislate for a minimum wage equal to a living wage calculated every year by a local charity. That living wage rate is currently £11.27 an hour.
Deputy Roffey said that once Guernsey’s minimum wage reached the target of 60% of median earnings his committee ‘would probably ask the States where it wants to go from there’.
Responses to the consultation are required by Thursday.