Employment News October 2011

The Minimum Wage (Guernsey) Law, 2009 only came into force on 1st October 2010. Now, exactly 12 months later the States have already made changes and upped the minimum wage hourly rates. As from the 1st of this month employers inGuernsey are now required to make sure employees are paid the following "new rates":

  • Workers19 years or older - £6.15per hour (adult minimum wage)
  • Workers16 - 18 years - £4.36per hour (young persons' minimum wage)

The Law applies to all employees in Guernsey including casual and seasonal workers with the exception of apprentices under 19 years of age, share fishermen, prisoners and volunteers. Most workers in Guernsey are therefore legally entitled to be paid at least the minimum wage and those employers who have failed to increase their employees pay in line with the new rates are breaking the Law. If an employer is found in breach the consequences are severe - compensation may be awarded to the underpaid employee, enforcement notices issued against the employer, or in worst case scenarios the breach can lead to a criminal prosecution of the employer with fines to the business of up to £10,000 and/or 3 months in prison for the employer.

But Guernsey's population has mixed views on the subject - supporters of the minimum wage say that it is in the best interests of the employee; it increases his/her standard of living; it reduces poverty and forces businesses to be more efficient. Those against, claim it is nothing more than a detriment to an employer particularly those with small businesses - effectively, it has become too expensive to employ staff and will only lead to an increase in unemployment; the new rates only cause an increase in cost to any business which is in turn passed on to the consumer - nobody is the winner.

It is too early to say what impact if any, this Law (and in particular the new rates) will have on Guernsey's economy, but what we do know is that the Law is here to stay and whilst the island may or may not appreciate it's existence, all employers need to be make sure they are compliant!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.