Forum recommends £8.32 minimum wage
The Employment Forum has recommended that the minimum wage should increase by 3.8 percent to £8.32 per hour from 1 April 2020. The recommended increase exceeds the latest increases in average earnings and the cost of living for the fifth consecutive year, giving a real terms wage increase of 1 percent.
The recommended hourly rate of £8.32 would apply to all employees aged 16 and over and would give employees an additional 30 pence per hour, or £12.00 each week for employees working a 40-hour week.
Helen Ruelle, Chair of the Employment Forum said, “We are very grateful to those who responded to our consultation and to stakeholders who took the opportunity to discuss the issues with the Forum in person. We received good quality information this year including the latest releases from Statistics Jersey and the advice of the Fiscal Policy Panel.
“This year, the economic climate has weakened, with an economic slowdown forecast in both 2019 and 2020, there is more uncertainty given the increased risk of a ‘no-deal’ Brexit and plans for government support for productivity improvements are still in development. We heard this year, much more than in previous years, that employers are feeling the impact of external pressures that are outside of their control and many are finding it difficult to recruit staff.”
The Forum is required to take into account the aspiration of the States Assembly that the minimum wage should reach a figure equivalent to 45 percent of average earnings by 2020, subject to economic conditions and the impact on competitiveness and low-paying jobs in Jersey.
The Chair of the Forum explained, “The mean weekly earnings figure (£770) was very high compared to last year, having increased by £30. This meant that an increase of at least 8 percent would have been required to reach the States aspiration. When the target year of 2020 was agreed by the States in early 2018, the significant economic changes and level of uncertainty for 2020 could not have been predicted. The States’ aspiration is not a fixed objective that the Forum is required to meet without taking into account the findings in our review.
“The Forum agreed that the recommended increase should continue not to fall below the cost of living increase but could not justify an 8 percent increase in the context of the economic advice and the consultation responses. A 3.8 percent increase exceeds the latest increases in earnings and prices giving a real terms wage increase of 1 percent. We know that minimum wage increases can be challenging for employers that have a large proportion of lower paid staff which can have knock-on effect across the entire wage bill.”
The Forum is also recommending the following increases from 1 April 2020:
- A Year 1 trainee rate of £6.24 per hour where training is undertaken in the first year of a new trainee role.
- A Year 2 trainee rate of £7.28 per hour where an employee has been a Year 1 trainee for one year and will continue to undertake training for up to one further year.
- An increase of 3.8 percent in the maximum amounts that an employer may offset against minimum wage pay where staff accommodation, or accommodation with three meals each day, is provided.
The Minister for Social Security will consider the Forum’s recommendations and she will lodge a proposition to make any changes to the Law later this year.
The Forum’s recommendation is available on the States website www.gov.je/minimumwage
Copies may also be obtained from the Forum’s Secretary; [email protected] or 447203