Minimum wage increase slowed to support businesses

Monday 12 October 2020

Guernsey’s minimum wage could rise from £8.50 to £8.70 next year, after ESS proposed a smaller increase than usual to "allow businesses more time to recover" from the stresses of the pandemic.

The proposals also increase the Young Person's Rate (for 16-17 year-olds) to £8.25 per hour.

The Committee was working on a five-year plan to make minimum wage rates match 60% of median earnings by 2023. This would have required a 5.9% increase this year, but after consultation with local businesses, the proposed increase is just 2.4%.

“COVID-19 has had a significant impact on the economy and on the viability of the hospitality and accommodation sectors, where wages are generally low,” said ESS President Michelle Le Clerc. “We think it is sensible to increase rates by no more than RPIX (inflation) for next year, to allow businesses a little more time to recover.

“At the same time, the Committee believes the minimum wage should at least keep pace with inflation, so that the gap between the lowest-paid and the middle earners does not widen.”

Pictured: Outgoing ESS President Michelle Le Clerc.

Deputy Le Clerc acknowledged that it was ‘strange’ for an outgoing Committee to be presenting these proposals, explaining that she wanted to make sure employers were aware of the potential new rates.

It is expected that the new Assembly will debate the proposals at the end of November. Employers are advised to adjust their payroll systems to ensure compliance with the new rates, should they be approved.

Further information about the minimum wage legislation can be found at www.gov.gg/employmentrelations, or alternatively employers can contact the Employment Relations Service on 234567, or email employmentrelations@gov.gg.  

Pictured: The current minimum wage for adults is £8.50.