Government confirms plans for living wage move within two years

Monday 03 June 2024

Details about how the minimum wage will be aligned with the living wage over the next two years have been outlined by the Government.

If States Members support a proposition lodged by Social Security Minister Lyndsay Feltham, the minimum wage will be set by ministerial order for a temporary period.

Current legislation requires the Government to consult the Employment Forum prior to changing the minimum wage, but this stipulation would be set aside until the end of March 2026 while the "catch-up" process takes place.

Transitioning the minimum wage to two-thirds of the median wage – a similar indicator to the living wage – was one of the priorities of the Government's Common Strategic Policy.

At a recent sitting of the Assembly, Deputy Feltham said her plan was to introduce an “intermediate rate” in 2025, with the full two-thirds rate to be brought in at the start of 2026.

In her proposition, set to be debated on 16 July, Deputy Feltham states that in her view the changes would be compatible with the European Convention on Human Rights.

Pictured: Social Security Minister Lyndsay Feltham has lodged a proposition to update the minimum wage.

The new Government headed by Chief Minister Lyndon Farnham, which took office in late January, set aside a report undertaken by Ministers under the previous administration which found that aligning the minimum wage and living wage was neither feasible or desirable.

The previous Government report, commissioned by Social Security Minister Elaine Millar, concluded that “a statutory link to a specific formula or target could be counter-productive”, arguing that it would be “difficult to justify” the statutory rate, “which could not be adjusted when circumstances require it”.

The minimum wage is currently £11.64, which has increased from £9.22 since 2022.

This is £1.77 an hour less than the £13.41 living wage for 2024, which is set by Caritas Jersey – a charity licensed by the UK’s Living Wage Foundation that accredits living-wage employers.

A living wage is defined as an amount that provides a worker with the ability to maintain a normal standard of living.

In 2022, 2% of island workers were being paid the minimum wage, with another 2% close to minimum wage, with those workers concentrated in the hospitality and agriculture sectors.

In addition, in 2023, 14% of private-sector workers were being paid between the minimum wage and living wage.

The most recent figure for the median wage in June 2023, published by Statistics Jersey, was £800 per week, an hourly equivalent of which – based on a 40-hour week – would be £20, with the two-thirds figure being £13.33, just eight pence lower than the current living wage.

Deputy Farnham has admitted that some job losses could arise during the transition, but pledged Government support for affected businesses.