Legal minimum pay for adults in currently £10.80 for adults and £9.65 for young people. 

The Committee says it has received no objections to the plans following a consultation period launched in May with business groups and unions.But two political committees did express concerns with the proposed hike and asked for a delay or a reduction in the proposed uplift. 

Policy & Resources asked for ESS to consider the economy and the benefits that may come by “deferring matching the 60% target in full for another year, until October 2025”.  

Economic Development called for the uplift to only match the rate of inflation of 5.5%, saying a 12.7% hike would outstrip inflation at a time where businesses are facing higher operating costs, social security contribution rates and the introduction of secondary pensions.  

Meanwhile a trade union expressed concern that minimum pay in the Bailiwick isn't keeping pace with Jersey and the UK. 

ESS is holding firm on the increase, however, saying it has already been delayed by two years due to covid. 

Pictured: Deputy Peter Roffey will present the plan to the States in September.

“The Committee notes that an above-inflation increase in the minimum wage is not without some risk. Typically, staff wages represent a significant share of the day-to-day operating costs of businesses. For those businesses which currently pay below the proposed new Adult Minimum Wage Rate, or which would seek to maintain the differential between the minimum wage and the hourly rate paid to their staff, an increase would represent an increase in costs,” it said. 

Some consultees warned that if wages were to increase this may result in prices of goods and services increasing for consumers, which ESS said “could slow the fall of inflation rates, keeping RPIX above average levels for longer. This would in turn have an impact on future wage negotiations and, as such, any potential impacts on inflation could then persist”. 

But it said it “does not consider that the proposed rate is unduly burdensome on employers because, among other reasons, current workforce pressures have an impact on wage levels”. 

ESS also considered setting a new minimum wage target to take the island into the 2030s closer in line with pay in Jersey and the UK, but following feedback has decided not to propose anything at this time. 

Easing pressure in the labour market was acknowledged, but challenges persist largely due to inflation. Vacancies advertised have come down from highs seen in mid-2022 but are still unusually high, while unemployment remains at just 1% of total workers. 

“As at 31st December 2023, median earnings were £41,564 per annum, which was 8.0% higher in nominal terms and 0.2% lower in real terms compared with a year earlier. 60% of this figure is £24,938, which would equate to an hourly rate of £12.00 based on a 40-hour working week. 

“One employer/industry representative organisation noted that a number of employers calculate wages with greater regard to local market conditions than minimum wage rates, with some industries paying higher wages to attract and retain staff in the face of labour shortages. In some cases, increases to minimum wage rates mean that employers adjust their overall wage structure to ensure parity for employees whose wages are higher than the minimum wage.”