States to agree up to £1m to pay contractors a 'living wage'

Tuesday 20 February 2018

Jersey's politicians are likely to agree to pump up to £1million into ensuring that employees contracted to work for the States, including cleaning and ground staff, are paid at least £9.75 an hour - the level of a new 'living wage'.

The new rate would cover both the States' own employees, and those who work for a company contracted to do States work. Ministers therefore say they may need to set aside up to £1m to cover the extra costs, although contracts would still be agreed on a competitive basis.

The living wage plans were put forward by Reform Jersey’s Deputy Geoff Southern, and have drawn support from the Council of Ministers.

If given, the endorsement would be an official stamp meaning that the States pay their own workers enough to “enjoy a basic, but socially acceptable standard of living.”

Pictured: The proposals due to be voted on today are being brought by Deputy Geoff Southern.

It's believed there are currently no States workers currently paid below the new living wage rate. However, the new higher rate would have significant implications for both the hospitality and agriculture industries. 

The living wage figure of £9.75 – set by charitable body Caritas at the same rate as the London Living Wage – is significantly higher than Jersey’s current minimum wage, which sits at £7.18 per hour, behind the UK.

Deputy Geoff Southern said that the point of adopting the wage was to help employees “to obtain a basic, acceptable, standard of living without the need for reliance on the benefit system”, explaining that it transferred the onus from the States to employers to ensure a good standard of living.

“The living wage philosophy promotes the idea that a worker’s wage should not just be set by market forces. By explicitly focusing on living standards, a living wage looks beyond the minimum wage, which only considers what the labour market can bear without a significant effect on employment,” he added.

Pictured: The Council of Ministers said plans to increase contracted and agency workers' wages would predominantly affect cleaning and ground staff.

Today, Ministers are set to accept the recommendations in full. They say they’re already paying States key workers a basic living wage in order to “lead the way as a good employer”, and will support a bid to ensure that sub-contracted and agency employees also secure that rate. 

In a report outlining their agreement, the Council of Ministers said that additional contracts costs for contracted employees arising from the living wage adoption could be between £750,000 and £1million.

“However, in practice, costs would arise as part of a process of accreditation, i.e. over time, and would vary depending on the difference between market wages and the living wage, and contractual terms. This is based on existing contractual terms. These costs are concentrated in cleaning staff and ground staff,” they explained. 

Deputy Andrew Lewis, who has led campaigning efforts as a founding member of the Jersey Living Wage Advisory Council, welcomed the news. He said that he hoped the States of Jersey would encourage other businesses to also adopt the wage.

Pictured: Deputy Andrew Lewis, a long-time supporter of the 'living wage'.

He commented: “Not only does the living wage create a greater incentive for people to take jobs, but it stops the ridiculous situation that we currently find ourselves in whereby the government is subsidising the few businesses that do not currently pay a living wage. It does this by topping up workers’ salaries through income support and supplementation. 

“Living wage detractors always point to the potential for jobs to be lost but this is a red herring. By paying people a decent amount for their work, you stimulate the economy by putting more money in consumers’ pockets and crucially, you increase the tax take at the same time.

“It is so important that such a large employer as the States of Jersey sets an example of good practise by committing to ensure that all its staff and sub-contractors are paid a living wage."

Today's vote on the matter will come just weeks after the Brighter Futures' 'Just About Managing' conference in which the stark reality of the island's hidden poverty was laid bare.