Proposals to increase the rates of the minimum wage by £1.25 an hour will go before Tynwald for consideration at the February sitting.
The proposed changes, if approved, will mean an increase of the headline minimum wage rate from £8.25 to £9.50 per hour, from April 1.
The rates for those aged 16-17 and for development workers will also be increased from £6.15 to £6.80 and £7.30 to £8.05 respectively.
Treasury Minister, David Ashford said: ‘Following the recommendations from the Select Committee on Poverty in July 2021, a key policy action outlined in the Island Plan is to transition the island’s minimum wage rates in line with the Living Wage within five years, in order to address income disparities in the island and ensure it remains a prosperous place for our residents to call home. Since that report we have also seen a dramatic increase in cost of living, alongside unprecedented low levels of unemployment, meaning that there is already upward pressure on wages above the legal requirement.’
‘Through these proposed changes to the rates of minimum wage in the Isle of Man, both the Treasury and Department for Enterprise have endeavoured to strike a balance between the needs of employers and the needs of our working population, alongside supporting the position of our island as a progressive, diverse and attractive destination.’
This change represents the first increase in the minimum wage since 2019 and comes at a time where many businesses are facing difficulties over increased bills and inflation. However, Enterprise Minister Dr Alex Allinson has also said that many businesses have ‘in-effect already raised wage levels in order to retain and attract new workers in such a competitive market’ and that fewer people are believed to be on minimum wage than was previously the case.
Dr Allinson added: ‘More generally speaking, it is imperative that the Isle of Man does not fall behind our close counterparts in the UK, and is able to maintain a strong and competitive proposition when working to fill labour shortages and promote the island as a secure, vibrant and sustainable place to live and work. We must ensure that workers on the island are no worse off than their counterparts in the UK on headline rates and that pay keeps pace with other cost of living pressures.
‘Whilst this will have an impact for some businesses, the Department for Enterprise and the Treasury have both provided extensive support to the local economy over the last two years and we will continue to work with businesses in affected sectors.’
The proposed rates of minimum wage, compared to the existing rates, can be seen in the table below.
|Current rate||Proposed rate from |
1st April 2022
|Single Hourly Rate |
(i.e. main rate that applies to those aged 18 and over)
|Rate for those aged 16-17||£6.15||£6.80|
|Rate for development workers||£7.30||£8.05|