June 1 minimum wage hike stands despite employer concerns

Employers were given a firm reminder on Thursday not to cut workers’ hours as the government pressed ahead to implement a long-awaited increase in the national minimum wage, set to take effect from Sunday.

Labour Minister Colin Jordan confirmed that Cabinet had approved the recommendation from the Minimum Wage Board to proceed with the proposed rates: $10.50 per hour for general workers and $11.43 per hour for security guards.

“We received a number of objections,” Jordan said during a post-Cabinet press briefing. “The Minimum Wage Board examined all of the objections… and submitted a report to Cabinet. The Cabinet made a decision today to continue with the proposed introduction of the increase.”

Objections included claims that the new rates were too low, that more time was needed for implementation, and that the hike could have a negative economic impact.

However, the minister however said the increase was long overdue and came after workers had “held strain” for several years.

“We introduced the national minimum wage in 2021 and indicated then that we would address it one year later. That is to say, the rate really should have increased about three years ago,” he said. “We remain of the view that the increase is reasonable, that the increase is timely.”

Jordan also made a direct appeal to employers not to undermine the hike by slashing hours to manage costs.

“We do not want employers to go the route of reducing hours of work. I want to encourage employers to recognise the weight that workers have been bearing over the past three or four years.”

Jordan added that while the Minimum Wage Act does not establish a national minimum income per week, the government was not inclined to go in that direction and expected employers to act responsibly.

Cabinet also approved a provision for interns, apprentices, and job attachments to be paid at 85 per cent of the new minimum wage, provided the engagement is part of a recognised programme and does not exceed three months.

Jordan said this was aimed at preventing abuse of internship systems as a means of paying reduced rates.

Labour inspectors will monitor compliance, and workers are encouraged to report concerns to the department.

Jordan noted that inspectors would pay close attention to cases where hours appear to be reduced solely due to the wage increase.

He also warned against employers misusing overtime calculations, referring to a past complaint where one employer paid overtime based on the minimum wage, not the higher contracted wage actually paid to the worker.

“I warn against anybody using the order to get away from paying one and a half times the rate that you are contracted to pay,” he said.

Jordan acknowledged the wage hike could put pressure on companies to adjust salaries across pay bands, but said those adjustments would not need to happen immediately.

“We are very clear that people have to be able to eat. They have to be able to look after their dependents,” he said. “We are satisfied that this increase will not make businesses unsustainable.”

He further urged all stakeholders to work together to ensure the wage increase leads to a fairer and more productive economy, stating, “As a government, we believe in protection and production. One cannot go without the other.”

(SM)