Government will introduce a $6-an-hour minimum wage on March 1, Premier Alden McLaughlin announced at the Cayman Economic Outlook conference at The Ritz-Carlton, Grand Cayman on Tuesday.
Following the recommendations of an advisory panel report last year, there will also be a lower threshold of $4.50 for workers who receive gratuities, room and board or similar benefits.
Mr. McLaughlin, in a speech that chimed with the conference’s theme of inequality, highlighted the minimum wage and the planned Labour Law among the measures government is taking to address income disparity in the Cayman Islands.
Of the minimum wage, he said, “We believe it will help reduce the inequality caused by the low wages that both Caymanians and expatriates earn in some parts of our economy.”
A resolution of the Legislative Assembly is still required before the minimum wage, approved by Cabinet in May last year, becomes law. It was expected to be folded into the new Labour Law but could be introduced as stand-alone legislation if that bill, which has drawn opposition from the business community, is delayed.
Markus Mueri of NM Ventures Group, which owns several restaurants including KARoo and Abacus, said he had not been aware of the March 1 implementation date for the minimum wage.
But he believes the private sector is ready for the change, which is expected to impact the hospitality, security and domestic worker trades in particular.
“I had not heard about it until this morning, but for us, it is not a problem. We pay that much anyway,” said Mr. Mueri.
He said he would, however, like to see more detail on how the law would be enforced. The minimum wage advisory committee estimated that the minimum wage would apply to almost 6,000 employees in the Cayman Islands.
Mr. McLaughlin said in his speech that there were times when government needed to intervene to tackle economic inequality.
“This is not about government acting as a trade union but it is about recognizing that sometimes the existing imbalance in economic power needs to be tilted back a little.”
He acknowledged that the proposed Labour Law had been more controversial.
“We recognize business concerns over some of the proposals and we are listening, but businesses too must recognize the inequalities in the labor market,” he added, highlighting the increase in the retirement age from 60 to 65 as an important measure in the bill.
The Labour Relations Bill, which represents a complete rewrite of the current Labour Law, would create a number of significant changes, particularly in the area of employment contracts and how dismissal of workers is handled.
Mr. McLaughlin also highlighted in his speech government’s new jobs program, called “Ready2Work KY,” which involves government paying the wages of private sector employees during a trial period as an incentive to firms to take a chance on unemployed Caymanians.
He said government is “aggressively” tackling unemployment and urged the private sector to do its part.
“At the end of the day, we expect that those Caymanians finding jobs will give an honest day’s work for an honest day’s pay and I encourage those of you who may have a job to offer, to make a Caymanian your first choice,” he said.
Mr. McLaughlin also highlighted the tourism school, addressing pay disparity for civil servants, and reducing duty on fuel in an effort to cut utility bills as actions his government has taken to reduce inequality in Cayman.
Earlier in the day, Anwer Sunderji, the CEO of event organizer Fidelity Bank, introduced the theme of the conference by highlighting growing global inequality as a potential threat to world political stability and the Cayman Islands business model.
Citing recent news reports that the richest 1 percent of people in the world control more wealth than the rest of the world’s population combined, he said, “Most made money through successful companies and innovation, but concentrating wealth to this extent gives rich political donors far too much political power and ability to shape the rules that govern the economy, to undermine social mobility, democracy and economic stability.
“They have all benefited from a system of trade, tax and regulatory rules tipped in their favor at the expense of wage earners.”
He added, “Even Oxfam is jumping on this bandwagon. Using data from Credit Suisse, it is asking for tax havens to be banned.
“Clearly, unless something tangible is done about this matter, the Cayman Islands and other international banking centers will feel the backlash.”