A new minimum wage of $8.75-an-hour has been proposed to help move low income workers in the Cayman Islands out of poverty.
The wage – almost a 50% increase on the existing $6 mark – would benefit an estimated 10,457 workers, including more than 2,000 Caymanians.
There could also be “spill over” benefits for thousands more workers as businesses adjust salaries across the pay scale in line with the new mark.
The recommendation comes from the final report of the Minimum Wage Advisory Committee, published on government’s website Monday, ahead of an expected press conference later this week.
The detailed report was submitted to the Ministry of Labour following a six month public consultation process, costing just over $50,000. It will be up to government to decide if and when to implement its recommendations.
Noting that some survey respondents had called for a rate as high as $20, the report acknowledges that many “will not be satisfied” with its recommendation.
But it emphasises the mandate of the committee was to address exploitation and provide “real relief” to the most vulnerable.
It also highlights related concerns about lack of affordable childcare, lack of suitable quality rental accommodation and cost-of-living issues that price Caymanians out of certain roles, suggesting further research is needed in these areas.
Citing analysis from the International Labour Organization, it acknowledges an actual “living wage” in Cayman would be in the range of $10.38 to $16.95 per hour.
Despite that, it argues that $8.75 would be a “fair and acceptable” minimum wage, defined as the floor rate a person could earn without falling into poverty.
The committee, led by former head of civil service Lemuel Hurlston, considered the impact on businesses and retail prices, as well as workers themselves.
“Setting the minimum wage requires a balancing act to ensure that there is economic stability but, at the same time, allowing people to meet their basic needs,” it stated.
“The committee considers this ($8.75) a fair wage that would be affordable to most employers and beneficial to low-wage employees.”
The workers most impacted by the change include domestic helpers and nannies, security guards, janitorial workers, hospitality staff and gardeners.
The current minimum wage was introduced seven years ago and has fallen in real terms as grocery and rent prices have soared. The spending power of $6 today is equivalent to $4.92 in 2016 when it was first established, according to data in the report.
The committee recommends a formula of automatic increases, linked to the Consumer Price Index, as well as a full rate review every four years to prevent this happening again.
Hotels will no longer be able to rely on grats
The report also recommends phasing out a loophole that allows hospitality businesses to use gratuities for up to 25% of their employees wages. Initially hotels and restaurants will be allowed to pay a lower rate of $6.56-an-hour with the rest made up by gratuities. But the allowable gratuity contribution will drop by 5% annually for the next five years.
“Starting July 2029, there should be no gratuities contribution to the minimum wage,” the report notes.
Stronger enforcement is also recommended, to ensure that hospitality businesses use the full hourly rate of $8.75 to calculate vacation pay, sick pay, maternity and paternity leave.
Households employing domestic workers will be allowed to cover a maximum of 25% of the wage through “in-kind” contributions such as live-in accommodation and utilities.
The overall direct cost of implementing the new threshold would be just over $50 million per year, the report notes. It suggests there could be some job losses as a result but cites Economics and Statistics Office estimates that this would be limited to less than 185 people
Read the full report from the Minimum Wage Advisory Committee here.
Additional reporting by Stephanie Ditta.
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Minimum wage in US is now $15.00, with the high prices and 20% stamp duty I don’t know how someone can afford living there on that.
$10.38 is even unacceptable…higher wages are needed for people to live – no exist – and employers need to integrate the new wages in a 5 year plan…
How can anyone in Cayman survive on CI$8.75 per hour when a 1/2 gallon of milk costs more than that?
I am also concerned about whether those in the hospitality industry actually receive all their gratuities. I recall a local hotel spa refusing to let me pay a gratuity / tip to a massage therapist directly, and insisted I pay the hotel imposed “gratuity” to the spa instead, being deaf to the argument that I wanted to pay more to the therapist directly and then delete the other (supposedly non-optional) gratuity to the spa . I strongly prefer to give any tips or gratuities for good service directly to the person who has earned and deserved them.
I’m having trouble with the “almost 50%”
here:
“The wage – almost a 50% increase on the existing $6 mark – would benefit an estimated 10,457 workers, including more than 2,000 Caymanians.”
‘Splain, Lucy. 🤔
Proposal is one thing, implementation, another. For once someone in Govt/Civil/Service needs to earn their salary and get this done.