Following last week’s announcement from Jersey’s Government that the minimum wage would increase to £10 per hour, the amount has been increased to £10.50 per hour from 1st November.
This will replace and enhance the planned incremental rise to £10 per hour from 1st October in advance of a further January increase, neither of which will now take place. Only enacting one rise in Jersey’s minimum wage over the next few months means businesses will not need to deal with an unnecessary administrative burden so close to October’s payroll and Islanders on the minimum wage will have more money in their pockets before Christmas.
A single minimum wage rise to £10.50 from 1st November represents a 14% increase compared to current levels. Trainee rates will rise by the same percentage.
Subject to States approval, offset rates (allowances which can be deducted from an employee’s pay when accommodation and/or food is provided) will rise by just over 26% from 1st January 2023 to bring them back in line with previous practice.
The Chief Minister, Deputy Kristina Moore, said: “Many States Members have made clear to the public our support for moving towards a living wage in Jersey. I committed, as part of the Government’s 100-day plan, that we should hasten this progress by lifting the minimum wage to £10 per hour. We are now in the position to go further and raise it to £10.50 before Christmas. This will give hard working families the support they need during the cost-of-living crisis.”
The Social Security Minister, Deputy Elaine Millar, will make a Ministerial Order to increase the minimum wage to £10.50 an hour from 1st November having reviewed the Jersey Employment Forum’s report and recommendations. She will also lodge Regulations to increase offset rates from January.
The Minister had noted the Forum’s recommendation that the minimum wage be increased to £10.10 an hour from 1 January 2023 and offsets increased by 20 per cent at the same time.
Deputy Millar said: “I’m very grateful to the Employment Forum for preparing a comprehensive report and I’ve considered carefully what they had to say, especially about the results of their consultations with businesses, trade unions and the wider Jersey community.
“The percentage of workers at or close to minimum wage rates has fallen steadily in recent years, but it is important to continue to increase minimum wage rates as quickly as we can. The increase to £10.50 in November helps Islanders most affected by the cost of living more quickly than a staggered uplift and also reduces the admin burden on businesses.”
The Minister for Economic Development, Tourism, Sport and Culture, Deputy Kirsten Morel, said: “I understand the pressures the increase to £10.50 places on businesses and other organisations but there has been a need to balance the needs of employers with the need to get more money into people’s pockets in order to help with rising costs, and this rise is an important part of the Council of Ministers’ commitment to helping Islanders deal with rising prices. I am pleased to see a substantial increase in the accommodation offset rates from January which will help employers of seasonal workers, and I will work with businesses and our agricultural sector in particular to support them through this period.
“I also welcome the Employment Forum’s support for the actions I’m taking to work closely with rural businesses to look at ways in which Government can support them.”
Marcus Calvani, Co-CEO of the Jersey Hospitality Association, said: “The JHA has welcomed the news that the Social Security Minister has changed her original plan to increase the minimum wage to £10 per hour on 1st October. This would not have given businesses enough time to make the necessary changes to payroll and work out the impact on their costs.
Having consulted with the Chamber of Commerce, we were concerned to learn that a further increase to £10.80 had been planned by the Minister for 1st January 2023. Therefore, we support the decision to make one change in November to increase the minimum wage to £10.50 and would like to acknowledge the work carried out by Chamber.
“Hospitality is often criticised for paying low wages when actually the opposite is true. Staff earn good hourly rates and receive benefits, such as tips and meals, that make the financial package our industry pays more attractive than many others.
“We are living through a time when prices are rising everywhere and if businesses are facing higher costs, then that will be reflected in the prices for all goods and services that consumers will have to pay. If you take hospitality, increased pay helps our employees cope with the rising cost of living, but we must look at what the corresponding higher prices in Jersey will do to the visitor economy.
“As Jersey becomes increasingly expensive, does that make us less desirable for visitors at a time when our main market from the UK is already feeling the pinch? Surely, we need to be considering how to drive more visitors to the island by making ourselves more appealing and therefore increasing the money that flows into our economy.”
The process also involved consultation with the Jersey Chamber of Commerce. Chamber CEO, Murray Norton, said: “I am grateful to the Chief Minister and Ministers for listening and accepting these sensible proposals from Chamber and acting quickly to rescind the previous Ministerial Order. However, we see no reason why the 20% rise in the offset could not be lodged to go before the assembly in mid-November to mirror that of the rise in the minimum wage.
“The current economic pressures are shared by businesses and individuals. Greater engagement with Chamber and Government support for businesses will be required in the forthcoming Government Plan.”
For comparison…
- Guernsey’s minimum wage is currently £9.05 for adults. This rate became effective as of 1st January 2022.
- England’s minimum wage is currently £9.50 for 23 year olds and over, but £9.18 for 21-22 year olds and £6.83 for 18-20 year olds.
- France’s mimum wage is currently €11.07 (approximately £9.60).
