Response to the Employment Forum’s Minimum Wage Recommendation and Law drafting instructions
Issued by the Social Security Minister on 20 October 2011
Background
The Employment Forum was established in August 1999 and its role and responsibilities were formalised in the Employment (Jersey) Law 2003, which came into force on 1 July 2005. The Forum has a statutory duty to review the Minimum Wage and to make recommendations to the Social Security Minister regarding any future increases. If the Minister decides not to accept the Forum’s minimum wage recommendations, he or she must provide a statement to the States giving reasons for that decision.
In accordance with a States decision in April 2010, the Forum must have regard to the States objective that the minimum wage should be set at 45 percent of average earnings within a period of 5 to 15 years, as well as having regard to competitiveness, jobs and the economy, in making its recommendations to the Social Security Minister.
The Forum consulted with the public on the minimum wage during the period 17 June to 12 August 2011 and publicised its recommendations on 27 September 2011.
Recommendations
The Minister accepts the following recommendations of the Employment Forum;
| 2011 | 2012 |
Minimum Wage (per hour) | £6.32 | £6.48 |
Trainee Rate (per hour) | £4.74 | £4.86 |
Maximum weekly offset against minimum wage for accommodation | £69.21 | £70.94 |
Maximum weekly offset against minimum wage for accommodation & food | £92.27 | £94.58 |
Maximum weekly offset against trainee rate for accommodation | £69.21 | £53.21 |
Maximum weekly offset against trainee rate for accommodation & food | £92.27 | £70.94 |
The Minister considers that the proposed 2.5 percent increase provides a fair balance in view of the economic and statistical evidence, and the consultation responses presented to the Forum during consultation.
Law Drafting
The Minister requests that the Law Draftsman prepares the legislation to give effect to the increases in the minimum wage, trainee rate and the maximum amounts that may be offset against the minimum wage where accommodation, or accommodation with three meals per day, are provided to an employee.
Offset against trainee rate
The Minister also requests that the Draftsman prepare an amendment to reflect the recommendation that, from 1 April 2012, an employer should be permitted to deduct a maximum of 75 percent of the maximum offsets against trainee rate pay, which gives a maximum accommodation offset of £53.21 per week and a maximum offset for meals and accommodation of £70.94 per week.
The minimum wage legislation currently permits an employer to deduct the maximum sum for accommodation (with or without meals) against the trainee rate. The Forum is concerned that this is too low a wage to be subject to the full deduction in respect of benefits in kind.