Minimum wage rates to rise after Tynwald approval

The changes will come into effect on 1 July

The minimum wage on the Isle of Man is set to increase by 70p to £11.45 in July after Tynwald backed the change.

The increase forms part of plans to align the hourly figure with the living wage by 2025.

Politicians also approved a rise in the rise of 70p for 16 and 17 year olds, taking that rate to £8.75 - a move that diverged from an interim recommendation by the Minimum Wage Committee.

Concerns were raised about ability of local businesses to afford the increases, but Enterprise Minister Tim Johnston said they would "help workers on the lowest wages in our community".

David Ashford MHK asked what engagement there had been with sectors where the rise could pose the most challenges, and questioned whether businesses had been given enough notice to prepare for the changes.

Mr Johnston said firms had been able to share their views during the the Minimum Wage Committee's annual review last year, with a view to proposals being brought forward for April.

Ahead a full report and recommendations the committee has requested that an "independent impact assessment" be carried out following concerns among some businesses about the "negative effects" of increases, he said.

But the interim rises put forward for Tynwald approval were to make sure hourly rates "did not fall further behind the living wage" while that assessment was completed, the minister said.

Balance

The committee had called for a 45p rise in the youth rate to counter the cost to employers of its recommendation to lift the adult rate by 70p.

But Mr Johnson said the proposal would have "widened rather than maintained the gap between the main rate and youth rate" and therefore proposed a rise in the youth rate to mirror that for older workers.

The minister also said the department understood concerns that increases were not brought forward earlier in the year.

However, he said it had been identified by the committee that the present economic conditions had been "difficult for some businesses", so it was important to "balance the needs of workers with the requirements of employers".