Cabinet rubber stamps minimum wage

| 15/02/2016 | 36 Comments

Cayman News Service(CNS): In just two weeks no one in the Cayman Islands should be earning less than $6 per hour as government has gazetted the National Minimum Basic Wage order to commence on Tuesday, 1 March. While 25% of the hourly rate can be made up of benefits, commission or gratuities, no worker, be they local or on a permit, can be paid less per hour than the legislated rate. The new minimum wage is a long way from being a living wage but it could trigger a step back from Cayman’s addiction to cheap exploited overseas labour, blamed by many for the challenges faced by unemployed Caymanians.

Last week, North Side MLA Ezzard Miller, a long-time champion for a minimum wage, raised his concerns about government’s decision to allow employers to use gratuities to subsidise the basic pay because hospitality workers could be short-changed. It could also create even more difficulties regarding enforcement, which is already largely recognised as the main challenge for government when the order takes effect.

Low paid workers, usually expatriate, tend to remain silent in the face of labour law infractions and rarely report their rogue bosses for fear of being fired, which will make it difficult for officials to detect and address employers who pay less than $6 per hour.

Government has used is powers in Cabinet to amend the regulations and implement the minimum wage without changing the labour law, as the ministry is still working on major changes to that legislation. Officials stated that the new draft of that bill should be published for public consideration next month.

The announcement that the basic rate would come into effect on 1 March was made by the premier in May last year, more than nine months ago, giving employers time to prepare.

“This formal adoption by Cabinet culminates the work of the ministry and government which began in February 2014,” Employment Minister Tara Rivers said. “As a country and government, we have a responsibility to the members of our local workforce to help to ensure that their minimum needs can be met in light of national, economic and social conditions.”

The rate was based on the research and the economic analysis conducted by the Minimum Wage Advisory Committee, with guidance provided from an experienced labour economist and public input from all stakeholders.

“Determining the appropriate minimum wage was definitely a balancing act,” Rivers said. “The government had to consider the impact on both employers and employees.”

The minister said the goal of a minimum wage is to address exploitation and provide real relief to the lowest paid workers, so the government did not want to introduce a minimum wage that would still see people living or falling below the poverty line.

“At the same time, we did not want to put employers in some industries in a position where they could not afford to hire workers because the minimum wage is too high,” she said, as she justified what some still see as too low a starting point.

“For many of the low wage employees in the Cayman Islands, the new minimum wage will actually mean an increase in salary, and this means they will be better equipped financially to provide for themselves and their families,” she said. “As a country, we cannot continue to facilitate the importation or perpetuation of poverty in our society, and this is one way in which the government has chosen to address this issue.”

While Rivers said $6 per hour was a reasonable basic rate, given the circumstances, and represented the lowest acceptable wage that an employee should earn in exchange for his or her labour, she admitted it was not necessarily the ideal or appropriate wage for some jobs or industries.

“The minimum wage is the absolute wage floor in which employers and employees can agree to; however, the parties are free to and should negotiate for wages and compensation that are reasonable given the economic conditions, the nature of the job, the industry standards,” she added.

Officials have said it will be reviewed on a regular basis, with the monitoring and evaluation procedure for the minimum wage being addressed in the revised Labour Relations Bill.

With around 30% of workers in Cayman working for less than the $6 an hour, many are hopeful that it will be increased soon in order for it to have any noticeable impact. But enforcement remains the key challenge for government to ensure that a legislated basic rate of pay is a success and begins to make a dent in the significant and growing problem of exploitation of people in an increasingly expensive jurisdiction.

Since announcing plans to finally introduce a minimum wage, government has spoken of increasing enforcement. The recent appointment of Bennard Ebanks, who has an enforcement background, as the director of the Department of Labour and Pensions (DLP) is expected to help the much criticised department tackle the myriad problems already plaguing enforcement of the labour and pensions laws.

Changes to the trade and business licensing regime have also tied compliance with those laws to the renewal of and granting of licences, but minimum wage infractions will be much harder for enforcement officers to check unless employees are willing to come forward and blow the whistle on rogue employers.

An increase in wages in many industries is seen as long overdue in the Cayman Islands, as pay has stagnated and even fallen since the recession began to bite, especially in the construction industry, where pay even for skilled workers has been pushed down dramatically. However, there are expectations that an increase at the very bottom of the wage scale will lift some people out of poverty and have the knock-on effect of more people earning a living wage.

Members of the public can call the Department of Labour and Pensions for more information at 945-8960, and the department has a confidential tip line (945-3073) to report employers who are not paying employees the national minimum basic wage or committing other breaches of the labour law.

The Labour (National Minimum Basic Wage) Order, 2016

Minimum Wage FAQs

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Category: Jobs, Local News, Politics

Comments (36)

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  1. Anonymous says:

    Vote maker. No other logic for it. As if the cartels need a reason to push prices up further. Another own goal for the sake of power.

  2. Anonymous says:

    I may just reopen my business now that I don’t have to pay $10 per hour to a pothead chatter monkey I like the new $6 minimum wage

  3. Hopeless says:

    I have seen some BS in my life on this earth but this beats it all. It seems that the PPM government and their advisory committee is living in another world. Can the PPM government, the Minister, Ministry or DLP answer the following questions:

    1- Does the government not consider allowing employers in the hotel, food and beverage industry the ability to ‘skim’ up to 25% from gratuities to be a form on misappropriation?

    2- Gratuities paid by customers at establishments are paid to employees for good service, tasty food or strong drinks, NOT to be used to pay a minimum wage- this is robbing employees of hard earned money.

    3- Did the government not consider that by allowing this skimming to take place; could in effect reduce a service employees gratuity payments by as much as 50%

    4- What policy is in place to determine if ALL gratuities collected are being properly paid out to employees, including that not more than the 25% is used as to pay wages- as is currently happening.

    5- Has government considered the possible increase in firings because some employers simply cannot afford to pay CI$6 and will have to reduce workforce.

    6- Has government considered the many small entrepreneurship type businesses (mobile car wash, salons, barber shops, small restaurants, corner stores) that will have to lock their doors because of the struggle to make ends meet.

    7- Has government increased funding to the NAU to assist persons who will be affected by these lost of jobs.

    8- Did the MWAC consider other employee benefits i.e. full medical, full pensions, transportation cost, transportation provided (car)?

    9- Has government and the Ministry sought to increase staffing in the labour office? If not this needs to be a priority as the service at the labour board has gone belly-up the past 2 years and I cannot fathom how hard working people will be serviced with the level of unprofessional help that comes from DLP.

    10- Finally, has government given consideration/thought/concern/care about how merchants (supermarkets, insurance, lights, water etc.) will pass this additional cost on to US the consumers.

    This is by far the WORSE decision that this government has made and this has sealed their fate with winning any election in 2017. Shame on the PPM, shame on the Minister, shame on the Ministry, shame on the Wage Advisory Council. SHAME…SHAME…SHAME……

  4. Anonymous says:

    Well, it’s a start.

    Now for the backbenchers or concerned citizens to:

    1. monitor which businesses get that government assistance to employ Caymanians, as we wouldn’t want the money to be used by PPM/C4C supporters to pay for labour as they face a slight increase in cost of expat workers.

    2. time for families to start using mature Caymanians as was done in the past to help babysit for relatives and give children more responsibility so less need for personal helpers… share one if you have to!

    3. businesses will have to rethink labour and start sending cheap labour back home and look for efficient workers who can get more.

  5. Anonymous says:

    if you hate someone or someone’s helper report them to the labor department, do you really think those with domestic helpers are going to keep proper records (particularly of overtime and pensions on overtime, etc). Hey, I bet anyone who makes less than, say 75k per annum and has a helper is not likely going to being paying minimum wage to their full time domestic. This is going to be fun. Think of all the people you can get into trouble with this, caymanians and expats alike. The labor dept or whoever is responsible cannot ignore complaints of law breaking. I am going to start a business to help disgruntled domestics make complaints in return for a percentage of their back pay. A lot of people have the potential to get busted here and there is profit in turning your neighbors in, awesome! Perhaps the immigration department should confirm the resources of the employer before approving work permits now. This is going to be fun!

  6. Anonymous says:

    Welcome to the politics of who’s going raise the minimum wage the most, for the most amount of votes… Which is what minimum wage is really about, a tool for the politicians to buy votes at the cost of the voters and consumers. Unfortunately, the fools waiting for minimum wage to make their lives more prosperous, will soon find themselves without a job at all.

    • Anonymous says:

      This was clearly not thought out properly by the PPM as expected. I pay my helper $850 a month and her health insurance is also paid in full by me at another $190.00 per month. She works 4 days some weeks (never more than 5 days) from 8:30am – 5pm. I am now contemplating sending my baby to daycare and cancelling her work permit as with the new MW law I will have to spend even more and in addition to the COL increase that will result because of all this. I will have to spend even more money on groceries etc. This may now put my helper out of work so she can’t provide for her family back home and also eliminates the almost $500.00 a year to Government for her work permit as well as the $190.00 per month to the Insurance Co. They might as well had left this alone and not to mention the very short notice given to people to prepare for paying more money to employees. If this is actually going to go through they could have at least given a few months notice.

      • Anonymous says:

        I understand just how you feel…. I am a young single mother raising three kids on my own….I use to receive help from their father, unfortunately he recently lost his job and he has been looking for work since, but the market is very tough… I am making less than $2,000.00 per month after all of the mandatory deductions made..I love my helper and she the best one I’ve had and it hurts my heart that I may have to let her go, because I can no longer afford her due to the new MW Law…Out of my salary, I have to pay rent, light, water, food, health insurance for my nanny, her salary and the list can go on… You cant go to the NAU for assistance because they already or bursting through its seams and the list of requirements are so long that the only thing left for them to ask is what blood type you have. I don’t think the government never fully thought this through and how it would affect many young people in a similar case to mines, who does not have the support from family in assistance of raising the children or with daily tasks. Since this is now in effect why don’t the government find ways on bringing the cost of living down? I really wish, that we can put the members of government on minimum wages, so they can see how hard it is being a single parent, raising kids on a small salary, or just ordinary middle class families who are scraping to make ends meet, because trust me you would see how quick they make drastic changes.

  7. Cheap Boss says:

    “the parties are free to and should negotiate for wages and compensation that are reasonable given the economic conditions…” in the Philippines, Honduras and Jamaica.

    • Anonymous says:

      So now I will have to get rid of my helper and put my child in to preschool and at the same time will have to spend more at the Supermarkets and gas stations. This is so counter productive.

      • Anonymous says:

        In what parallel universe does someone who is unable to pay a minimum wage of CI$4.50 an hour get to employ a full time personal servant?

        • Anonymous says:

          I’m no f*&#ing slave driver and she does not live in so I would be required to pay her $6.00 an hour. I currently pay her $900.00 per month and I pay my portion of her health insurance. She does not cook, wash, fold or iron. She is off every weekend and holiday. Her housework is very minimal as I keep my place clean and do much of the cleaning myself. I just ask that she keeps the floors clean for the sake of my kid who is crawling. She has it damn easy compared to some horror stories I’ve heard for far less $$$. Right now it is making more sense financially for me to send my child to pre-school for $400.00 per month. This is absolutely none of your business but I am sick of people like you that think everybody treats domestic helpers like sh*t. You just assume I can’t afford to pay her but I have other responsibilities (nunya biznizz) and in regards to my helper, I have other options than having her which I will now have to explore. I treat my helper with respect and kindness but I’m not going to put myself in a financial bind just to keep her. You know what part of your a$$ hurts you and I know mine.

          • Anonymous says:

            So clean your own toilets or pay a local service for a couple of hours a week, place your child with qualified persons better equipped to look after them, save money, and reduce the importation of poverty in Cayman. Sounds like a win all-’round. Or pay CI$6.00 an hour. Your choice and you are right, none of my business which you choose.

  8. Clever Boy 345 says:

    The national minimum wage means that an employee will be required to make at least $270.00 a week which roughly translates to $1,080.00 a month. This will not affect employees such as office assistants, receptionists, administrators, bank tellers etc. because they are making way above national minimum wage. I highlighted this group because a lot of locals fall under this category of workers.

    The national minimum wage is geared towards protecting employees who are being exploited by SOME hotels, SOME gas stations and SOME local supermarkets. On face value, it is a good thing because it means that employees who work in these places will have a little more in their pocket. However, this protection will be counterproductive because we live in a capitalist society.

    The places that I mentioned before, the gas stations etc. are privately owned. Their goal is to make a profit, which is not a problem at all. However, when they have to enforce the new national minimum wage, they will have to increase the salaries of their employees (the ones whom are below the impending national minimum wage).

    How will the businesses counter this? Simple, they will increase the cost of their products/services i.e. gas pieces, groceries etc. The consumer will have to spend more on products/services which are needs. The majority of consumers on island are already complaining about the cost of living as it is. Not everyone is a lawyer, a doctor or an accountant etc. They can survive.

    However, the bank tellers, office assistants etc. are the ones who are going to feel it. The standard of living here is already high. It will continue to increase with the implication of the national minimum wage but the salaries of these sort employees (i.e. bank tellers, office assistants etc.) won’t.

    Moreover, the employees who are presently below the impending national minimum wage will be affected despite their salaries being increased. Because your bank tellers, office assistants etc. already can’t afford this standard of living as it is.

    Note, I am not saying that salaries shouldn’t be increased, but the nature of our society is a capitalist one. With this capitalist mindset, the cost of living will be increased with the impending national minimum wage.

    • Diogenes says:

      As opposed to the socialist model, where the costs are met by taxes (paid disproportionately by those same bank tellers etc who cannot afford tax advisors and structures to avoid paying income tax).

  9. Sharkey says:

    I think that it is disgraceful for them to think that $6.00 per hour minimum wage will be good for every job , there’s many jobs that do not alow a person to make tips , and what business do the Government have to base their decision on something that is not in their control “TIPS”.
    Look at the cost of living and minimum wage $6.00 per hour, $960.00 per month full time employment, how far would that go with a family of four today. Did Government even say that when hiring a person and tips are not possible for one to make the employer must employ the employees full-time for certain jobs . This is your Government helping the people that vote and gave them their cushy job.

  10. Anonymous says:

    It is not all bad. With the tips going into the mix, for some staff it is a way of reducing their headline hourly rate.

  11. Anonymous says:

    A great way to keep the unemployed from getting jobs to prove they are employable.

  12. Anonymous says:

    Call WHO for assistance???? The Labour Department??? You must be joking – they never answer the phone, they never return calls. This department is as useless as the NWDA

  13. Anonymous says:

    this means the cost of business goes up which will lead to the cost of living increasing…..thank you ppm …..zzzzzzzzzzzzzzzz

  14. Anonymous says:

    Great now the prices at our supermarkets will increase and all the people working there will continue to send their extra money home to their native countries!!!! (I understand that these people work hard.) Maybe the minimum wage for Caymanians should increase so people who live here, own homes, etc. can actually afford to live.

  15. Anonymous says:

    creates more problems than it solves……just another day in wonderland….

  16. Anonymous says:

    This is just another law written in the book and will be forgotten about before the ink dries!

  17. Anonymous says:

    “With around 30% of workers in Cayman working for less than the $6 an hour, many are hopeful that it will be increased soon in order for it to have any noticeable impact”. What an inane comment. 30% of workers will be affected now with the rate at $6, some by earning more, some having their pay restructured to earn the same with tips or other remuneration taken into account and some will lose their jobs. The effect of this law is that businesses will hire fewer people.

  18. Anonymous says:

    People working tough labour jobs while the corrupt C.I.G politicians roll around in fat cash while not doing anything but adding salt to the wound of this country.

  19. O'Really Factor says:

    Higher wages will mean higher costs will be passed on to consumers for goods and services. Thanks PPM

    • Anonymous says:

      Do tell… If the major shipping companies and trucking companies and import companies and supermarkets and utilities are all already paying more than CI$6.00 per hour, this is going to raise the cost of living how?

  20. Anonymous says:

    PPM looking out for work permit holders ago who will send more money out of the local economy instead of doing things to help Caymanians

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