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Minimum wage 2017 recommendation

26 September 2016

The Employment Forum has recommended that the minimum wage should increase by 21 p to £7.18 per hour from 1 April 2017. If approved by the Minister, this will provide a 3% pay increase for minimum wage employees over age 16.

In reviewing the minimum wage, the Forum is required to take into account the views of stakeholders via consultation, the impact on the economy and on competitiveness, as well as the decision of the States that the minimum wage should be set at a target figure of 45% of average earnings by 2026, subject to economic conditions and the impact on competitiveness and low-paying jobs in Jersey.

Chairman of the Employment Forum, Helen Ruelle, said “The Forum has taken all of the relevant factors into consideration during our review this year and we carefully debated all of the evidence, including the most recent economic advice from the Fiscal Policy Panel and the States Economic Adviser.

The decision is never an easy one, but it was particularly difficult this year because, despite the relatively positive economic position in the first half of 2016, Brexit has introduced a new level of uncertainty. The Forum’s decision was unanimous that the recommended hourly rate of £7.18 provides an appropriate balance between the desire to continue increasing the minimum wage proportionately to average earnings, but without prompting job losses or reductions to terms and conditions of employment.

A 3% increase significantly exceeds both the increases in prices (1.5%) and in earnings (2.1%) and it is the highest percentage increase that we have recommended since 2008, before the economic downturn. Given all of the evidence and the uncertain economic conditions, the Forum unanimously agreed that it could not justify taking a more significant risk this year. The Social Security Minister, Deputy Susie Pinel, will now consider the Forum’s recommendation and we expect her to announce her decision shortly.”

The recommended hourly rate of £7.18 is equivalent to 41 percent of the June 2016 level of mean weekly earnings. Based on a 40 hour working week, this would give minimum wage employees an extra £8.40 per week, or £437 per year.

The Forum is required to also recommend the trainee rates and the maximum amounts that may be counted towards minimum wage pay where the employer provides meals and accommodation as part of the employment package. The recommended rates from 1 April 2017 are as follows:

  • a year 1 trainee rate of £5.39 per hour where training is undertaken in the first year of a new trainee role.
  • a year 2 trainee rate of £6.28 per hour where an employee has been a Year 1 trainee for one year and will continue to undertake training for up to one further year.
  • an increase of 3 percent in the maximum amounts that an employer may offset against minimum wage pay where staff accommodation, or accommodation with three meals each day, is provided.

After the Minister for Social Security announces her decision, law drafting will be requested so that Regulations can be lodged for States debate later this year.

View the Forum’s Minimum Wage recommendation

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