The minimum wage in Guernsey is important. As the minimum wage continues to increase in the United Kingdom, there is much uncertainty surrounding the island of Guernsey. Several questions remain, including the impact of the rate and increases on employment. The Guernsey Community Foundation is now looking at how poverty has affected Guernsey. The committee’s research shows that even a family with two parents earning the minimum wage would still live in relative poverty. Of course, adding a child or person with a disability to the mix would exacerbate the problem.
The minimum wage in Guernsey is not enough to encourage people to work full-time. At PS12-13 an hour, it does not even come close to what a person needs to live comfortably. Moreover, the rate would have to increase to PS35 an hour in order to reap the benefits of working. But that will be decided by the States next week. But in the meantime, there are measures to help raise this wage.
The government of Guernsey is considering new anti-discrimination laws that will open senior positions to all citizens. However, until the new laws are passed, the minimum wage remains unchanged. The government of Guernsey will not make any decisions until the Discrimination Ordinance has undergone a technical consultation period. However, the technical consultation period will enhance the final draft and will increase its assurance. Initially, the first phase of the legislation was supposed to be implemented this year, but that time frame has been revised. The first tranche of the legislation is now expected to be presented to the States in the third quarter of 2022 and will come into force six months after approval.
The State of Guernsey also established a PS5 million hardship fund to help individuals in need. The fund is expected to benefit people working in the construction, tourism, and hospitality industries. The money will also help workers who are unable to work because they are looking after dependent children. Whether it is a caregiver or a parent, the minimum wage in Guernsey will help these people.
A number of recent developments have led to increased demands for increased wages and the need to find ways to make it more affordable for employees. In early November, the States debated a range of issues including discrimination against religious groups and the need to increase the minimum wage. However, the proposed increase to the adult wage only represents a halfway point between the 2.3% RPIX figure and the 5.7% increase. As of 1 January 2022, the rates will be imposed across the island.
Despite the recent introduction of the Discrimination Ordinance, the legislation has a long way to go before being implemented. The dispensation will include a broad list of grounds for discrimination, including race, religious beliefs, sexual orientation, disability, and age. This law is bound to affect many aspects of Guernsey’s life, from education to public services. In fact, it will even affect membership in clubs and other organizations.
A complaint brought by Giants Slesers and Leva Steimane against the Captain’s Hotel has resulted in a judicial review. The Tribunal has now ordered that the applicant’s employer rectify the mistake and increase the minimum wage. The Tribunal’s ruling has set a precedent for future increases to the minimum wage in the Channel Islands. This case shows that employers should be aware of the provisions of the Guernsey Employment Protection Law before increasing the minimum wage.
A minimum wage is a statutory amount that workers are entitled to receive on a per-hour basis. The Minimum Wage is available for employees of certain age groups. Young persons aged 16 and 17 are entitled to a young person’s rate while apprentices under 18 are not covered by this rate. Adult rate workers are those aged 18 and older. Minimum wage rates are set by law and are not dependent on the size of the business or type of employer. Starting on 1 January 2022, the minimum wage rate will change as well. Employers should take note of the changes.
The Revenue Service has announced a percentage contribution rate increase for employees and employers. This increase was approved by the States of Deliberation on 13 October 2021. The new rates will go up to 6.8% for employees and 6.7% for employers, respectively. The 2021 rates are shown in the brackets below. If approved by the States of Guernsey, the new minimum wage rate will take effect on 1st January 2022.
Impact on employment
The impact of the minimum wage on employment in Guernsey is uncertain. The government has announced a change in the minimum wage, and the State will pay workers in impacted sectors 80% of the minimum wage. The intention of the new law is to prevent redundancies, protect businesses, and provide a safety net for those who are unable to work. Sectors affected by the minimum wage are hospitality and tourism, rental and leasing of cars, passenger transportation, recreation and entertainment, event management, personal services activities, commercial fishing, construction, and animal boarding.
While the minimum wage raises the wages of low-skilled workers, it does not boost the wages of high-paid employees. Local hospitality businesses are unlikely to face direct foreign competition, and therefore may see their output and employment drop. A minimum wage increase will reduce the competitiveness of these industries, leading to a fall in output and employment. However, it may not be this simple, since the government also wants to protect local businesses by cutting costs.
The minimum wage increases were triggered by the implementation of the Common Population Policy, and the States Assembly has agreed to increase the minimum wage to two-thirds of median earnings by 2024. The Jersey Tribunal has also released guidance on the factors it will consider when determining compensation for the workers. It will be interesting to see how the new policy will impact employment in Guernsey. The Government has said it intends to introduce the policy before the end of 2024.
Barriers to working
The minimum wage is a legal requirement for workers in Guernsey. There are two rate structures for minimum wage: the young person’s rate, which applies to workers aged 16-17, and the adult rate, which applies to all workers over 18 years of age. The rules for minimum wage rates are not different for employers of all types or sizes. As of January 1, 2022, there will be new statutory minimum wages. Employers must note the changes to Minimum Wage Rates, as these will apply to all employers after that date.
Impact on self-employed
States of Guernsey have recently announced new measures to address the impact of the minimum wage on the self-employed on the island. COVID-19 will affect the economic substance test on the island until March 2020, and businesses in Guernsey are eager to find out what support they can get. The State of Guernsey has made information about the new measures available.
The new law will affect both employers and self-employed people. Employers may claim income support from the Government to cover the cost of living. However, self-employed individuals who claim income support may also need to include the grant’s value in their calculations. The grant value is currently PS230 per week for 13 weeks. Further guidance can be found on this website. In the meantime, employers and self-employed individuals should make sure they are complying with the new law.