Proposals to align the youth minimum wage with the adult rate have been criticised by multiple sectors.
The CGi and GBTEA have shared their concerns with Express.
Both have rallied against the prospect of employers having to pay 16 and 17-year-olds the same rate as over 18s, which is one proposal suggested by the Committee for Employment and Social Security.
It has asked for feedback from businesses by the end of today, before presenting its proposals to the States ahead of making any changes to the minimum wage this October.
Currently adults must be paid at least £12.60 per hour while young workers aged 16 and 17 have to be paid at least £11.35 per hour.
A current States policy means the minimum wage for adults should be set at 60% of median earnings, with the young workers’ minimum wage intended to be 90% of that.
ESS has proposed that instead the minimum wage for 16 and 17-year-olds is aligned fully with the adult minimum wage – and from 1 October, it has suggested that be set at £13.10 per hour.
That would equal a 4% – inflation linked – rise for adults, and an above inflation rise for teenagers.
It’s unclear whether the new rate would equal 60% of median earnings as ESS has told employers that the data is unavailable.
The Confederation of Guernsey Industry (CGi) said it has responded to the ESS proposals, supporting the inflation-linked rise to the adult minimum wage but it has “significant concerns” over plans to align the youth and adult rates.
The Guernsey Building Trades Employer’s Association (GBTEA) has said it does not support the proposed increase to the adult minimum wage and “strongly opposes” plans for the young worker’s rate to be the same as the adult rate.
Express understands the Guernsey Retail Group (GRG) has also raised concerns with ESS over its proposals on behalf of its members.
The CGI said it recognises that all staff should not be financially disadvantaged and accepts, in principle, the need for an annual increase in the minimum wage but members are unhappy with the proposition that under 18s should be paid the same as adults.
“As the current RPIX stands at 4%, the proposed increase in the adult rate is considered acceptable,” said Chair, Garin Dart. “However, as we have outlined to the previous ESS president, the minimum wage set by the States does not determine pay levels for many employees on-island.
“Wage levels in some sectors are driven by local market pressures and the continuing shortage of available workers. Businesses are frequently required to increase wages across their wider workforce whenever the minimum wage rises in order to maintain parity between entry-level and more experienced employees.”
The CGi’s principal concern relates to the recommendation to align the young person’s rate with the adult minimum wage, a rise of 15%, Mr Dart emphasised.
“The CGi does not believe this proposal is justified simply by comparisons with Jersey. More fundamentally, we do not consider it reasonable to equate the value, experience and productivity of a 16-year-old entering the workforce for the very first time with that of an adult employee who may already have years of experience, training and responsibility.
“Many employers have become less willing to offer weekend, seasonal and holiday work to younger people because of the increased costs involved. These opportunities are often a vital first step into employment, helping young people gain practical experience, develop workplace skills and build confidence.”
The industry association has called for a balanced approach that supports young people while protecting employment opportunities and business sustainability.
The CGi’s views on the proposed young adults’ minimum wage were echoed by the GBTEA which said many of its members employ young people who require “significantly more training and supervision than older workers” on hazardous building sites.
“This makes the real employment cost of young workers significantly higher for construction trade employers,” said the GBTEA. “Removing the differential in minimum wage between young and adult workers is going to be a significant disincentive on employers to take them on and will have the detrimental impact of reducing employment options for young workers.
“In fact, we have previously put forward that the 90% differential between young workers and adults is insufficient to compensate employers for the extra cost involved in training and supervising young workers and recommend that a differential of 15%, i.e. 85% of the adult rate, would likely increase their employment opportunities.”
While the CGi supports the proposed 4% increase to the adult minimum wage, the GBTEA doesn’t think it should go up to £13.10 per hour.
It warned that if the increase is approved, it would mean that the minimum wage has risen by more than 50% in just five years compared to inflation which has increased by just under 30%.
It further warned that increasing minimum wages will have an inflationary impact on all wages across the whole workforce.
“Workers who have progressed from the minimum wage to the next pay grade will expect to see that differential maintained when the minimum wage increases and this increase will then ripple through all pay grades, leading to overall higher wage inflation.
“The GBTEA is aware of recent concerns raised by several States members about high construction cost inflation and the potential impact this can have on housing costs.
“We are therefore keen to see a period of wage restraint and recommend an increase in the adult minimum wage of only 3% to £12.98 per hour.”
Feedback on the minimum wage proposals is due back in today, with ESS taking proposals to the States this summer, ahead of a new rate coming in from 1 October.
