The Department is seeking Tynwald approval of the Minimum Wage Committee’s recommendations to increase the Island’s minimum wage rates. The Department is also looking to introduce a new minimum wage band for employees aged 25 or over into line with changes being implemented in the UK next month and plans recently announced within the Programme for Government.
If the recommendations are approved, the hourly rate for employees aged 21 to 24 would increase by 20p from £7.00 to £7.20. Those aged between 18 and 20 and trainees over the age of 18 would see their hourly rate increased to £6.85. Employees aged 16 and 17 would see their hourly rate increase to £5.70.
The Department also wishes to introduce a new minimum wage band for workers aged 25 and above of £7.50 an hour, a 50p increase from the current hourly rate. This would bring the Island’s minimum wage for this rate into line with the UK’s national living wage.
In November 2016, the Department invited interested parties to submit their views on the Isle of Man’s Minimum Wage to the Minimum Wage Committee. Following the consultation, the Committee submitted a series of proposals. The Department carefully considered their proposals and has accepted their recommendation to increase the existing four minimum wage bands.
Laurence Skelly MHK, Minister for the Department of Economic Development, commented:
‘A minimum wage is important to attract people into work and raise the standards of living on the Isle of Man. The Programme for Government clearly sets out the commitment to boost living standards and the Department has taken the step to introduce a fifth band of minimum wage to meet this objective. The Department recognises that the increase to a rate of £7.50 will put additional pressure on some employers, however, this must be balanced with the need to move towards an acceptable living wage, ensuring the Island remains competitive for job opportunities by remaining in line with the UK standard.’
‘We believe that the introduction of a new band will give a boost to local workers while further widening the gap between the maximum Jobseeker’s Allowance payable to an individual aged 25 or over and minimum wage take-home pay. We will continue to work with employers to understand and monitor the impact of the changes and have proposed an introduction date of 1st June 2017 to provide further time for employers to plan for the changes. As part of this process I am scheduled to meet with key employers to discuss any additional support the Department might be able to provide to help implement these changes.
‘While the change may be most significant for over 25s, it is essential to improve the life of a number of hard-working people on our Island and reinforce our position as having an engaged, driven workforce who are actively contributing to our modern, successful business environment.’
The increases to the existing minimum wage bands have been recommended by the independent Minimum Wage Committee (which includes representatives from employers and unions) to the Department of Economic Development and the Treasury.
The Department of Economic Development, Treasury and Council of Ministers support the introduction of a new band for employees aged over 25 to align the Island with the UK National Living Wage.
