Lobby group supports new minimum wage plan

A business lobby group has said it supports the new "direction of travel" in the Isle of Man's minimum wage calculations but has raised concerns about how the new benchmark is defined.

Last week, Tynwald approved a move to base the minimum wage from a figure of 66% of median earnings on the island.

The Isle of Man Chamber of Commerce said the new methodology was an "important step" towards a more "consistent and evidence-based wage-setting system".

However, it warned that using a benchmark based on both the public and private sector could "distort outcomes".

The lobby group said that public sector pay was "significantly higher and not tied to profitability or investment".

'Economic viability'

It argued that a high minimum wage has a "cascading effect" on the median "reinforcing upward wage spirals".

The change would see the current hourly minimum wage rate of £12.25 increased to about £13.46 in April, a slightly lower rate than the living wage which stands at £13.74.

It meant that a previous bid to align the minimum wage with the living wage was scrapped.

The Chamber of Commerce had argued that the previous plans to align the minimum wage and living wage this year would have a "significant impact" on businesses.

But the new approach "supports fair pay while maintaining economic viability for employers," the group said.

Chief executive Rebecca George said: "We support the direction of travel, but we also want to ensure that this policy shift results in fair, workable outcomes for businesses and employees alike."