Gov't committee calls for $6 minimum wage

Almost 6,000 could get raises, but 600 could face layoffs

A committee, after studying wages for more than a year, has recommended a $6 hourly minimum wage for Cayman.

The Minimum Wage Advisory Committee report makes exceptions for live-in domestic workers and service workers who get tips. The committee recommended allowing that additional income to make up $1.50 of the hourly wage. Effectively, live-in household workers, bartenders, wait staff and anyone else who receives tips would have a $4.50 minimum wage.

At a press conference Thursday announcing the report, Premier Alden McLaughlin said he supports the recommendations and hopes to be able to present more information about how the Legislative Assembly could take up the proposal next month. “Social justice requires that we pay a minimum wage,” he said.

A person working 40 hours a week at $6 a hour would make $12,480 per year.

Under the proposal more than 5,960 people – almost 16 percent of Cayman’s workforce – would see a pay increase, according to the report. Businesses employ about 3,360 of the affected people, while households employ the other 2,600.

About a quarter of the workers earning less than $6 an hour are Caymanian.

Lemuel Hurlston, chairman of the Minimum Wage Advisory Committee, said the group “unanimously agreed to recommend that the minimum wage should be a national minimum wage that is applied across the board to all sectors.”

The report cites the possible loss of 545 to 600 jobs – about 1.5 percent of the labor force in Cayman – if the wage proposal is implemented. Roughly 190 job cuts could come from household employers and 380 from businesses.

Addressing the potential for layoffs, the premier said he would expect that any job losses would have a minimal impact and most likely would affect work permit holders and not Caymanians.

Mr. Hurlston said, “Small businesses, firms with less than five employees, will be most impacted.” He said those small companies, most of which would be Caymanian-owned, would be required to give raises to more than 1,200 employees.

The minimum wage does not apply to those who are self-employed.

The other impact cited in the report is that businesses could pass the added costs on to consumers, further inflating prices for goods and services. The report states that if businesses pass on the entire cost of the increase, prices could go up by 0.85 percent. The biggest impacts would be felt in housing and utility costs, with a projected increase of almost a third of a percent, according to the committee’s report.

The sectors that could feel the most impact are wholesale and retail trade, car repair shops, restaurants, administration and support services, which includes security guards, and households that employ domestic workers.

Mr. Hurlston said the committee, with the help of an adviser from the United Nations International Labour Organization, identified pay levels for low wage, defined as people making less than $9.23 an hour, and very low wage, those making $4.61 or less an hour.

Seven percent of workers in Cayman, according to the Economics and Statistics Office Labour Force Survey, are currently in that “very low wage” category. There are 2,683 Caymanians in the two lowest pay categories.

Any minimum wage would require changes to several laws and government departments. The Labor and Pension and Immigration departments would see the biggest changes, said Minister Tara Rivers, whose Ministry of Education, Employment and Gender Affairs oversees labor issues.

The report calls for whistle-blower provisions in the Labour Law to protect employees who complain about minimum wage violations.

The report recommends doubling the fines in the Labour Law, which are currently $2,500 for the first offense and $5,000 for additional violations, and a further $100 a day for an ongoing offense like paying someone below what was promised.

The committee’s report also pushes for stricter record-keeping by employers and changes the definitions of households that employ domestic workers, churches and nonprofits to bring them under Labour Law regulations.