Proposed Increases to Minimum Wage

The Department is seeking Tynwald approval to increase the main rate of minimum wage in the Isle of Man following recommendations from the Minimum Wage Committee (MWC). In addition to the MWC’s recommendations, the Department is also looking to remove the different minimum wage rates for those aged 18 to 20 and 21 to 24 so that the main rate of the minimum wage will simply apply to all those over 18.

If the proposed changes are approved, the hourly rate for employees over compulsory school age but not yet 18 would increase by 15p from £5.70 to £5.85. The main rate of minimum wage for workers aged over 18 will be £7.85 an hour, an increase of 35p for workers over 25 years, 65p for workers aged 21 to 24, and £1 for workers aged 18 to 20.

If approved the new rates would take effect from 1 October 2018 giving local businesses time to prepare for the changes.

Laurence Skelly MHK, Minister for Enterprise, commented:

‘The recommendations to Tynwald are put forward in the spirit of fairness and equality as we continue to position the Isle of Man as a progressive, diverse, and attractive place to live and work. The simplification of the different minimum wage rates will also support our Island’s drive to attract and retain more young workers as well as streamlining the guidelines for employers.

‘However, as with any changes to rates of pay we must consider the fine balance of the needs of employers and the need to grow the wages of our working population. We believe the proposed changes strike the right balance and will continue to work closely with the Minimum Wage Committee, Treasury and local employers to monitor impact.

‘The Department’s continued assessment of the minimum rates of pay is in line with the Programme for Government’s commitment to investigate the option of a living wage. The Department and Treasury will consider further a proposal to increase minimum wage year on year to attain the level of the Manx living wage in the future.’

The increase to the main rate of minimum wage has been recommended by the independent Minimum Wage Committee (which includes employer and employee representatives) to the Department for Enterprise and Treasury.

In addition to the MWC’s recommendations, the Department for Enterprise, Treasury, and Council of Ministers support the removal of the different minimum wage rates for those aged 18 to 20 and 21 to 24.

Tynwald will be asked to consider and approve the recommendations later this month.