Employment (Minimum Wage) (Amendment No.10) (Jersey) Order 2016

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A decision made on 13 October 2016:

Decision Reference: MD-S-2016-0074
Decision Summary Title :	Make Minimum Wage Order for 2017		Date of Decision Summary:	13 October 2016
Decision Summary Author:	Policy Principal		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Make Minimum Wage Order for 2017		Date of Written Report:	13 October 2016
Written Report Author:	Policy Principal		Written Report : Public or Exempt?	Public
Subject: Employment (Minimum Wage) (Amendment No. 10) (Jersey) Order 2016
Decision(s): The Minister made the Employment (Minimum Wage) (Amendment No. 10) (Jersey) Order 2016.
Reason(s) for Decision: Following a minimum wage review during the period June to September 2016, the Employment Forum issued its recommendation to the Minister for Social Security on 23 September 2016. The Minister presented the Forum’s recommendation as a Report to the States on 4 October 2016 (R.102/2016, MD-S-2016-0067) and notified the States of her decision to accept the rates that the Forum recommended. The Minister then requested law drafting for an amendment to the Employment (Minimum Wage) (Jersey) Order 2007 (MD-S-2016-0068). The purpose of the amendment is to increase the minimum hourly rates of pay, from 1 April 2017, to the following rates; A minimum wage of £7.18 per hour. A first year trainee rate of £5.39 per hour. A second year trainee rate of £6.28 per hour. The Minister has lodged ‘au Greffe’ the Employment (Minimum Wage) (Amendment No. 13) (Jersey) Regulations 201- (MD-S-2016-0073) for debate at the States sitting of 29 November 2016. The Regulations would, from 1 April 2017, increase the maximum values that may be counted towards minimum wage or trainee rate pay where accommodation, or accommodation with food, is provided to an employee.
Resource Implications: There are no financial or manpower implications.
Action required: Policy Principal to notify the Greffier of the States and the Law Draftsman that the Order has been made so that it may be notified to the States, and forward the signed and sealed Order immediately to the States Greffe for publication and archiving.
Signature:		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Employment (Minimum Wage) (Amendment No.10) (Jersey) Order 2016

ACCOMPANYING REPORT

Employment (Minimum Wage) (Amendment No. 10) (Jersey) Order 2016

Background

The independent consultation body, the Employment Forum (the ‘Forum’), conducted a review of the minimum wage during the period June to September 2016 and issued its recommendation to the Minister for Social Security (the ‘Minister’) on 23 September 2016.

The Minister presented the Forum’s recommendation as a Report to the States on 4 October 2016 (R.102/2016) and notified the States that she had accepted the recommended minimum wage rates to apply from 1 April 2017, as shown in Table 1.

Table 1 – Minimum wage rates for 2016 and recommended rates for 2017

	2016	2017
Minimum Wage (per hour)	£6.97	£7.18
Trainee Rate Year 1 (per hour)	£5.23	£5.39
Trainee Rate Year 2 (per hour)	£6.10	£6.28
Maximum weekly offset against minimum wage for accommodation	£76.29	£78.58
Maximum weekly offset against minimum wage for accommodation & food	£101.71	£104.76
Maximum weekly offset against trainee rates for accommodation	£57.22	£58.94
Maximum weekly offset against trainee rates for accommodation & food	£76.28	£78.57

The Forum was established in 1999 and its role and responsibilities are set out in the Employment (Jersey) Law 2003. The Forum has a statutory duty to consult on the minimum wage and to make recommendations to the Minister regarding any future increases, taking into account the consultation responses, the economy of Jersey and competitiveness. In accordance with a decision of the States Assembly in April 2010, the Forum must also have regard to the States objective that the minimum wage should be equivalent to 45% of average weekly earnings by 2026, subject to consideration of competitiveness, jobs and the economy. The Minister is satisfied that the Forum has met its obligations.

The Forum reached a unanimous decision to recommend a 3% increase in the minimum wage. This is the biggest percentage increase since 2008 and it exceeds the latest increases in average earnings and the cost of living. The decision reflects the fact that there were positive signs for the economy in the first half of 2016. However, with the uncertainty following Brexit, a relatively cautious approach has been taken, while maintaining the hourly rate at a figure that is equivalent to 41% of mean weekly earnings.

Ministerial Order

The Employment (Minimum Wage) (Amendment No. 10) (Jersey) Order 2016 amends Article 2 of the Employment (Minimum Wage) (Jersey) Order 2007 to give effect to the recommended increases to the minimum wage and trainee rates from 1 April 2017. The changes are as follows;

To increase the minimum wage from £6.97 to £7.18 per hour.

To increase the minimum hourly rate for a trainee (except as described in point 3) from £5.23 to £5.39. This trainee rate may be paid for a total of 12 months, while an employee is undergoing approved training at any time within the first two years of a new job.

To increase the minimum hourly rate for a trainee who has completed 12 months’ approved training in a job from £6.10 to £6.28. This trainee rate may be paid where an employee has already undertaken approved training for a total of 12 months in a new job and while that employee continues to undergo approved training for up to one further year in that job, up to a maximum of two years.

The Minister also proposes to proportionately increase the maximum amounts that may be counted towards minimum wage or trainee rate pay where living accommodation, or living accommodation with food, is provided to an employee. Subject to the States adopting the Employment (Minimum Wage) (Amendment No. 13) (Jersey) Regulations 201-, lodged on 18 October 2016, the maximum amounts will increase from 1 April 2017 in accordance with the Forum’s recommendations.

There are no financial or manpower implications arising from this Order.