Proposals to increase the rates of the Isle of Man Minimum Wage will go before Tynwald for consideration at the February sitting.
Treasury and the Department for Enterprise have proposed the new rates following consideration of the report and recommendations of the Minimum Wage Committee after a two year pay freeze, taking into account the UK’s increase in minimum wage rates and the continued pressure on the labour market for workers, as well as the clear direction from Tynwald in July 2021 that the Island’s minimum wage should transition to the level of the Isle of Man Living Wage within five years.
The proposed changes, if approved, will mean an increase of the headline minimum wage rate from £8.25 to £9.50 per hour, representing an increase of £1.25 per hour from 1st April 2022. The rates for those aged 16-17 and for Development Workers will also be increased from £6.15 to £6.80 and £7.30 to £8.05 respectively.
Treasury Minister, David Ashford MHK, commented:
‘Following the recommendations from the Select Committee on Poverty in July 2021, a key policy action outlined in the Island Plan is to transition the Island’s minimum wage rates in line with the Living Wage within five years, in order to address income disparities in the Island and ensure it remains a prosperous place for our residents to call home.’
‘Since that report we have also seen a dramatic increase in cost of living, alongside unprecedented low levels of unemployment, meaning that there is already upward pressure on wages above the legal requirement.’
‘Through these proposed changes to the rates of minimum wage in the Isle of Man, both the Treasury and Department for Enterprise have endeavoured to strike a balance between the needs of employers and the needs of our working population, alongside supporting the position of our Island as a progressive, diverse and attractive destination.’
Minister for Enterprise, Dr Alex Allinson MHK, added:
‘We have been given a clear mandate from Tynwald to increase our rates of minimum wage over the next few years in order to align with the calculated Living Wage for the residents of the Isle of Man. The draft ‘Our Island Plan’ reinforces this commitment and the proposals before Tynwald signal the start of our journey towards this.
‘This is the first increase since 2019 and whilst it is recognised that the proposed changes will impact some businesses, many have in effect already raised wage levels in order to retain and attract new workers in such a competitive market. Therefore we expect the actual number of workers on minimum wages to be much lower than previously was the case. More generally speaking, it is imperative that the Isle of Man does not fall behind our close counterparts in the UK, and is able to maintain a strong and competitive proposition when working to fill labour shortages and promote the Island as a secure, vibrant and sustainable place to live and work. We must ensure that workers on the Island are no worse off than their counterparts in the UK on headline rates and that pay keeps pace with other cost of living pressures.’
‘Whilst this will have an impact for some businesses, the Department for Enterprise and the Treasury have both provided extensive support to the local economy over the last two years and we will continue to work with businesses in affected sectors.’
The proposed rates of minimum wage, compared to the existing rates, can be seen in the table below.
|Description||Current rate||Proposed rate from 1 April 2022|
|Single Hourly Rate
(i.e. main rate that applies to those aged 18 and over)
|Rate for those aged 16-17||£6.15||£6.80|
|Rate for development workers||£7.30||£8.05|