Minimum Wage Rates proposal revised

Following feedback from industry and a range of representatives, the Department for Enterprise (The Department) and Treasury have revised the Minimum Wage proposals originally set out last month. The new proposals will see Tynwald asked to approve a single initial increase to the main rate of the Minimum Wage to £12.25 from 1 April 2025. 

Both the Department and Treasury have taken the decision to defer commitment for the originally proposed second increase to £13.05 in October and instead will prioritise a review into the current methodology of agreeing proposals in respect of the Minimum Wage and its link with the Living Wage, with the aim to report on findings to Tynwald in July 2025.

The proposals will see the Island’s single hourly rate increase from £11.45 to £12.25 per hour from 1 April 2025. The youth rate, for those over compulsory school leaving age but not yet 18, will increase from £8.75 to £9.55 from 1 April 2025.

Tim Johnston MHK, Minister for Enterprise, commented:

‘The subject of Minimum Wage and regular increases is often a difficult topic whereby Government must try to strike the right balance of increasing the safety net for low paid workers, whilst also considering the impact on the wider economy and local businesses.

‘The pressures faced by our domestic economy are well documented, and in announcing the previous proposals we set out a commitment to review the long-term options for determining the Minimum Wage. In particular, the impact of the current Tynwald policy position to achieve parity with the Minimum Wage and Living wage rates, which places the Island in a unique position to other jurisdictions, requires further detailed consideration.’

The Minister added: ‘While we still have the ambition of achieving parity with the Living Wage, we are aware of the pressures that will be felt across our economy, particularly around the second proposed increase, and the need to strike the right balance. Therefore, we are revising the proposal set out last month to only bring forward a single increase to Tynwald in February and will be working with the Minimum Wage Committee on the review as a priority, with the aim to report back in July 2025.

‘I would like to thank businesses and sector representatives for raising their concerns and am confident we can continue to work together to find a way forward.’

Dr Alex Allinson MHK, Treasury Minister, commented:

‘While Government remains committed to delivering the Tynwald resolution to match the Minimum Wage with the Living Wage, we also have a duty to listen to the concerns of Honourable Members and the wider business community. That is why we are amending our plans for seeking approval for a dual increase at the February sitting of Tynwald and will be carrying out further work on the relationship between the calculation of the Living Wage and the Minimum Wage to meet our obligations to the lowest paid workers in our community, while also recognising the challenge for businesses.’

The Department, and Treasury, will undertake a review of the current process for determining proposals in respect of the Minimum Wage, considering the current statutory requirements prescribed in the Minimum Wage Act, the policy position of alignment with the Living Wage as well as exploring other options for future consideration. 

The single proposed increase will be brought forward to Tynwald at the February 2025 sitting and, subject to approval, will be effective from 1 April 2025.