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DTI announces changes to Minimum Wage rates 5 March 2010

The Department of Trade and Industry (DTI) has confirmed revised rates for the Island’s Minimum Wage following Tynwald’s approval of the changes in January. The new rates, which will come into effect on April 1st 2010, will be as follows:

  • A worker aged 18 years or over - £6.10
  • A worker who has attained school leaving age but not 17 - £4.67
  • A worker aged 17 years but not 18 - £5.24
  • A Worker aged 18 or over, receiving DTI-accredited training who is within the first 6 months of employment with his or her employer - £5.24

Accommodation offset: the maximum accommodation offset will be:

  • 96p per hour; or
  • £5.50 per day; or a maximum of
  • £38.50 per week

Under normal circumstances the Minimum Wage Committee considers Minimum Wage rates on an annual basis, with any recommendation considered and introduced in October of each year. However, the committee deferred making recommendations for 6 months, to allow an impact study to be undertaken, to provide them with more information on the effects of the Minimum Wage level on both employers and employees.

After considering all of the information available, the committee recommended an increase of 1% to the single hourly rate to £6.06 and an increase of £2.10 per week in the rate allowable for accommodation offset. The committee recommended that all other rates should remain unchanged.

The DTI and the Treasury agreed with the recommendations of the committee. As the rate had not been increased for 18 months the decision was taken to increase the rate to £6.10, which equates to a 1% annualised rise.

The Minimum Wage rate for workers who are 18 years old and above increased from £6.00 to £6.10, a rise of 1.5% (rounded to the nearest 10p). The rates for 16 year olds, 17-year-olds and certain trainees remained unchanged. It was agreed to increase the maximum amount which may be deducted for accommodation provided by the employer from 91p to 96p per hour or, if calculated on a daily basis from £5.20 to £5.50.

Looking at the figures since its introduction in 2002, the adult rate of Minimum Wage has increased by 49%, compared with price inflation of 34%. This shows that the Minimum Wage legislation has had the effect of improving the real earnings of lower paid workers in the Isle of Man. Our Minimum Wage rates continue to compare favourably with other jurisdictions. For example, in the UK the rate for adult workers aged 22 and over is currently £5.80.

Minister for Trade and Industry, Hon David Cretney MHK commented: “This is another step forward for low paid workers in the Isle of Man. Even in difficult economic times we will continue to promote the welfare of those on the lowest incomes.”

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