Minimum Wage 2014: Law drafting instructions

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A decision made 27 September 2013:

Decision Reference: MD-S-2013-0094

Decision Summary Title :

2014 Minimum Wage Law Drafting

Date of Decision Summary:

24 September 2013

Decision Summary Author:

Policy Principal

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

Written Report

Title :

2014 Minimum Wage Law Drafting

Date of Written Report:

24 September 2013

Written Report Author:

Policy Principal

Written Report :

Public or Exempt?

Public

Subject: Minimum Wage 2014 – Law drafting instructions for changes to the Minimum wage Regulations and Order

Decision(s): The Minister decided to request that the Employment (Minimum Wage) (Jersey) Regulations 2004 and the Employment (Minimum Wage) (Jersey) Order 2007 be amended in accordance with the Employment Forum’s minimum wage recommendations for 1 April 2014.

Reason(s) for Decision: The Forum published its minimum wage recommendation on 23 September 2013 which recommended that the minimum wage and associated rates should be increased from 1 April 2014. On 24 September 2013, the Minister presented a report notifying the States that he had accepted the recommended rates (R.116/2013), which are as follows;

	2013	2014
Minimum Wage (per hour)	£6.53	£6.63
Trainee Rate Year 1 (per hour)	£4.90	£4.97
Trainee Rate Year 2 (per hour)	£5.71	£5.80
Maximum weekly offset against minimum wage for accommodation	£71.47	£72.54
Maximum weekly offset against minimum wage for accommodation & food	£95.29	£96.72
Maximum weekly offset against trainee rates for accommodation	£53.60	£54.41
Maximum weekly offset against trainee rates for accommodation & food	£71.47	£72.54

The Minister intends to lodge ‘au Greffe’ an amendment to the Employment (Minimum Wage) (Jersey) Regulations 2004, for States debate at the earliest opportunity.

Resource Implications: There are no financial or manpower implications.

Action required: Policy Principal to submit drafting instructions to the Law Draftsman’s Office.

Signature:

Position:

Date Signed:

Date of Decision (If different from Date Signed):

Minimum Wage 2014: Law drafting instructions

Minimum Wage Law Drafting Instructions

Background

The Employment Forum (the ‘Forum’) consulted on the minimum wage during the period 14 June to 9 August 2013 and publicised its recommendation to the Minister for Social Security (the ‘Minister’) on 23 September 2013.

The 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 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 equivalent to 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 Minister for Social Security.

Minister’s response to recommendations

The Minister accepted the recommendations of the Forum, which are as follows;

	2013	2014
Minimum Wage (per hour)	£6.53	£6.63
Trainee Rate Year 1 (per hour)	£4.90	£4.97
Trainee Rate Year 2 (per hour)	£5.71	£5.80
Maximum weekly offset against minimum wage for accommodation	£71.47	£72.54
Maximum weekly offset against minimum wage for accommodation & food	£95.29	£96.72
Maximum weekly offset against trainee rates for accommodation	£53.60	£54.41
Maximum weekly offset against trainee rates for accommodation & food	£71.47	£72.54

The Minister supports the Forum’s recommendation for a 1.5 percent increase in the minimum wage from 1 April 2014. The Minister notes that the recommendation is cautious again this year and he agrees with the Forum that this is a sensible approach. The Minister also notes that the resulting minimum wage of £6.63 per hour will maintain the position of the minimum wage relative to the mean weekly average earnings at 40.3 percent.

The Forum’s recommendation noted the continuing concerns of some employers about uncertainty created by delays in approving the minimum wage rate. The Minister decided to announce his decision swiftly, by presenting a Report to the States on 24 September 2013 (R.116/2013), in order to give some assurance to employers. The Minister intends to lodge an amendment to the Employment (Minimum Wage) (Jersey) Regulations 2004 and to seek States approval as soon as possible.

Law Drafting

The Minister requests that the Law Draftsman amends the legislation as follows:

Employment (Minimum Wage) Order 2007 (the ‘Order’)

Article 2 of the Order, as amended by the Employment (Minimum Wage) (Amendment No. 6) (Jersey) Order 2013, sets the minimum wage rates and should be amended as follows;

The hourly minimum wage rate should increase from £6.53 to £6.63.

The hourly minimum wage rate for a trainee (except as described in point 3 below) should increase from £4.90 to £4.97.

The hourly minimum wage rate for a trainee who has completed 12 months’ approved training in a job should increase from £5.71 to £5.80.

All of the above changes should come into force on 1 April 2014.

Employment (Minimum Wage) (Jersey) Regulations 2004 (the ‘Regulations’)

Regulation 9, as amended by the Employment (Minimum Wage) (Amendment No. 9) (Jersey) Regulations 2013, sets limits on the amounts that may be taken into account where food and living accommodation are provided to staff as part of their employment package. These amounts are taken into account to determine whether the appropriate minimum wage has been paid. The maximum amounts should be amended as follows;

Where the employer provides food and living accommodation and pays the minimum wage, the maximum offset should be £96.72 per week or £13.82 per day.

Where the employer provides living accommodation and pays the minimum wage, the maximum offset should be £72.54 per week or £10.36 per day.

Where the employer provides food and living accommodation and pays either of the two trainee rates, £72.54 per week or £10.36 per day.

Where the employer provides living accommodation and pays either of the two trainee rates, £54.41 per week or £7.77 per day.

All of the above changes should come into force on 1 April 2014.