Proposals to increase the rates of minimum wage in the Isle of Man will go before Tynwald for consideration at the February sitting.
The proposed new rates comprise an increase to the headline minimum wage rate from £9.50 to £10.75 per hour, representing an increase of £1.25 per hour. The rates for those aged 16-17 will be increased from £6.80 to £8.05, with the Development Worker rate being abolished. Subject to Tynwald approval, the proposed new rates will come into effect from 1 April 2023.
The Department for Enterprise and Treasury have proposed the changes following consideration of the report and recommendations of the Minimum Wage Committee, and in line with the direction from Tynwald in July 2021 that the Island’s minimum wage should transition to the level of the Isle of Man Living Wage by 2026, with Our Island Plan committing to ensure this happens sooner, by April 2025.
Lawrie Hooper MHK, Minister for Enterprise, commented:
‘In bringing forward the proposals in respect of the minimum wage, the Department and Treasury have considered a number of factors, including the continued impact of cost of living pressures on disposable income, and ongoing skills shortages across many sectors. Importantly, the proposals also set a foundation for a smooth transition from the minimum wage to the living wage by April 2025, in line with our commitment in Our Island Plan, by seeking to erode a third of the differential forecast between minimum and living wage rates in each of the next three years.
‘Whilst there is no doubt that some businesses will be impacted by an increase of the rates of minimum wage, with low levels of unemployment across the Island, many have in effect already raised wage levels as a measure to retain existing workers and attract new workers in a competitive labour market.
‘More broadly, whilst striking a balance between the needs of employers and our working population is of the utmost importance, we must also ensure the Isle of Man’s proposition is strong and competitive on a national and international level as we look to fill labour shortages and promote the Island as a strong, vibrant and sustainable place to live and work.’
Dr Alex Allinson MHK, Treasury Minister, commented:
‘These latest proposals form part of the continued commitment outlined in Our Island Plan to increase the minimum wage towards parity with the living wage, building on the Tynwald resolution to follow the recommendations of the Select Committee into Poverty in 2021.
‘We have continued to see an upward pressure on wages due to global economic turbulence caused by rising fuel and energy prices, together with an acute skills shortage.
‘Treasury has provided financial support throughout 2022 to the most vulnerable sectors of society which have felt the financial pressures of these global developments. By increasing the rates of minimum wage, we are seeking to provide residents with the reassurance that our community is paid proportionately as we collectively adapt to inflationary pressures.’
The rates of minimum wage proposed to come into effect on 1 April 2023, compared to the existing rates, can be seen in the table below.
|Minimum Wage Hourly Rates|
|Age Rate||Current Rate||Proposed New Rate||Change increase|
|Single Hourly Rate
(i.e. main rate that applies to those aged 18 and over)
|Rate for those aged 16-17||£6.80||£8.05||£1.25|
|Rate for development workers||£7.30||Abolished|
|Accommodation offsetThe maximum amount an employer may reduce a minimum wage payment by if they are providing accommodation for a worker.||£1.05/hour