Bid to cut proposed rise in minimum wage by half
A LATE bid is to be made to cut by more than half a proposal to increase the island’s minimum wage.
The recommendation is going to the States next week to raise the minimum wage from £10.65 to £12 an hour from 1 October.
But the Committee for Economic Development, which had already expressed concerns about the proposal to its sponsoring committee, Employment & Social Security, now wants to limit the increase to the cost-of-living rise, setting a new rate of £11.25 and £10.15 for under-18s, or failing that, £11.55 an hour.
Its president Neil Inder intends to lay an amendment during debate.
He said that his committee understood ESS’s reasoning, but felt that it had significant concerns which had been raised by employers.
The committee said it was worried that the proposed rise, at 12.7%, was ahead of inflation and the increase in median earnings, and would come into force as employers were paying extra for secondary pension contributions.
‘Industry feedback was that an increase of the proposed level would be difficult for employers, particularly in the retail sector,’ said Deputy Inder.
‘The combined impact is a significant pressure on those employers with lower wage employees, which may impact the number of employment roles that they are able to offer.’
He warned that combined with increases in employer contributions on social security and pensions, there was a ‘risk of continued upward pressure on retail prices’.
If Economic Development’s proposal was to be rejected, it has also picked up a proposal from the Policy & Resources Committee to defer the full increase to 60% of median earnings for a year, and go for a halfway position of £11.55, a rise of 8.5%, from October, likely rising to about £12.45 in 2025. The rate for under-18s would go up to £10.40 an hour, a 7.8% increase.
A proposal in Jersey to raise its minimum wage from £11.64 to £13 an hour from next April is also being criticised by employer groups.
The island’s Chamber of Commerce has said that there may be business ‘casualties’ as a result. One small employer has calculated that the move would cost his business an extra £900 a week but he could not afford to increase prices by 11.7% to compensate.
