ESS links minimum wage increase near inflation

The Employment & Social Security Committee has brought in consistent improvements to minimum wage, but this time around it has halved last year's increase, which took the adult rate to £12.

Minimum wage changes would normally be proposed later in the year, but with the upcoming election ESS have put out their proposal this week.

ESS has proposed for the minimum wage to rise to £12.60 for workers aged 18 and over, while 16 and 17-year-olds would have a minimum rate of £11.35, rising from £10.80.

Between January 2019 and October 2024, there has been a plan to increase adult minimum wage gradually to reach the target of 60% of the median earnings of employees in Guernsey.

In February 2025, the committee carried out a targeted consultation in respect of two options for proposed minimum wage rates. These were to increase the adult minimum wage rate to either £13 per hour, in line with Jersey, or by 5% to £12.60.

Following the consultation process, it was decided to go with the latter option.

The committee noted that the minimum wage rates was not intended to reflect a living wage, particularly as different households with different family compositions have different financial needs.

Rates of inflation have begun to fall, but they remain higher than typical, with RPIX having fallen from a peak of 8.5% in December 2022 to 4.0% in December 2024, and it is expected to fall further in the coming quarters.

As part of the consultation for the latest proposals, the committee approached industry representative organisations, unions and relevant civil society groups.

In total 22 were approached and 12 responded.

Economic Development noted concerns that increases to minimum wage rates would result in price rises and adjustments to business’ wider wage structures and would therefore be inflationary. It wanted the wage level to match the rate of core inflation.

Of the other respondents, four indicated their support £13 per hour proposals, while a further four respondents explicitly supported the lower rate.

Two did not explicitly support either, while a further two opposed both options.

‘Some respondents noted that many employers are facing increased pressures including higher than normal rates of inflation and business costs associated with the implementation of the statutory requirement to enrol employees in a workplace pension,’ said Deputy Roffey in the policy letter.

‘There was some concern that, if wages were also to increase, this may need to be reflected in the prices some businesses charge for goods and services.’