Committee recommends no further minimum wage rise

The minimum wage for adults rose from £10.75 to to £11.45 per hour in July

An independent committee has said there should not be a further rise in the Isle of Man’s minimum wage before April.

The hourly rate for adults rose by 70p to £11.45 in July as an interim measure, but the Minimum Wage Committee's latest report recommends against another rise.

The panel has also called for a review of the timeframe for completing a government commitment to align the minimum and living wage rates by next April.

The gap between the two rose to £1.60, the highest in three years, after a new living wage rate of £13.05 was calculated by the government's statistics division.

The government-appointed committee’s report, which had been due for publication in February, was delayed after it asked for more time to consider the potential affects of minimum wage rises on businesses.

That research, carried out by consultants Pragmatix, found employer representatives were "extremely concerned about business viability in the low paying sectors", which would "inevitably impact" on all other firms.

The committee said while employee representatives were "were keen to see the rate rise", they did not back it to be increased "to the extent that worker employments were lost".

Concerns had been raised that "significant rises" in recent years had seen "cuts in hours, and increases in zero-hour and part time employments" in low paying sectors, the committee said.

'Careful balance'

The committee's latest report concluded that the July interim rise was sufficient as it kept in line with inflation and a higher rise "risked jeopardising business viability", and the timeframe of aligning the rates should be reviewed.

Enterprise Minister Tim Johnston said aligning the minimum and national living wage rates by 2025 was a government target, but the report "raises important points for consideration", the implications of which would be discussed "over the next few weeks".

He said many households and businesses were "navigating significant challenges" and it was "essential to recognise that these difficulties can compound and strain budgets".

It was "crucial" that proposed changes "strike a careful balance", which would allow for "prioritising fair wages" and "supporting the financial stability of businesses", Johnson continued.

A further update would be provided to Tynwald, which is responsible for approving any minimum wage changes, in November, he added.