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Minimum wage takes effect

The new National Basic Minimum Wage takes effect tomorrow (1 March), at which time all employers in the Cayman Islands will be required by law to pay their workers at least $6.00 an hour before health and pension deductions in most scenarios. At the same time, government is working on an updated Labour Relations Bills to address other workplace concerns.

That rate does not apply to service workers of employers who have gratuities schemes approved by the Director of Labour and Pensions. Those service workers must be paid a minimum of CI$4.50 per hour directly from the employer.

Meantime, an employer with a live-in household employee is allowed no more than 25 per cent or CI$1.50 per hour as “in kind” credit providing for accommodations and utilities for the employee, meaning the employee must be paid a minimum of $4.50 per hour in gross monetary compensation.

According to the Cabinet Order passed earlier in February, any employer with employees working on a commission basis may use no more than 25 per cent or CI$1.50 per hour to be allocated from the commission earned by the employee to be put towards making the National Minimum Basic Wage of that employees. That is, the employees must be paid a minimum of CI$4.50 per hour gross directly from the employer. However, including commissions in calculating wages must not prevent that employee from receiving all commissions earned.

“No employee, including service employees, live in household domestics, and commission based employees, must receive less than their respective National Minimum Basic Wage when the employer calculates their sick vacations, maternity or any other applicable leave. For the avoidance of doubt, the employer of a live-in domestic employee may continue to calculate any allocated in kind benefits for accommodations and utilities during leave periods,” the Order explained.

Employment Minister Tara Rivers described this as a historic move. “This really has been a work in progress for a number of years. We have taken a methodical approach to this,” she said.

Ms Rivers praised the work of the 12-member Minimum Wage Advisory Committee that was chaired by Lemuel Hurlston. “I’m very grateful for their commitment in seeing it through to the point where they could provide us with the informed decision-making tool to assist the government to be able to get to this point,” she said.

“On behalf of the government, I’m happy to say that we have now reached this very significant milestone in our history because there’s been a lot of talk about the need for a minimum wage for quite a few years, spanning quite a few decades actually, and so to be the minister and part of the government to bring this to fruition in a very thoughtful and methodical fashion supported by the research, is something that I’m very proud to be able to bring forward for the country,” she said in an interview with Cayman Weekly.

The Employment Minister said the new minimum wage should not be seen as a “cure-all” for everything but said it should address the primary concern to a large degree -- addressing incidences of exploitation and providing real relief to the lowest paid workers in the community.

The Department of Labour and Pensions will be responsible for managing the enforcement of the minimum wage. Employees will also be able to utilise a confidential labour tip line 945-3073 to report any breaches made by their employer.

There are clear penalties in the law for failing to pay the minimum wage. Under Section 81 of the Labour Law (2011 version), the Court is able to give a summary conviction for a first offence of up to $2,500 and to imprisonment for six months and in the case of a second or subsequent offence a fine of $5,000 and imprisonment for 12 months.

Meantime, work continues on the Labour Relations Bill to bring it before the Legislative Assembly for approval. The bill is expected to set out how the minimum wage will be reviewed and will, among other things, seek to lessen the opportunities or loopholes for structural discrimination against Caymanian employees, as well as to establish clear expectations in dispute resolution as well as timelines for enforcement action.

“We are in the process of revising the draft bill based on all the comments that we’ve received. The ministry has worked very diligently to go through all of the comments, the recommended changes, the policy changes raised and flagged,” the minister said.

“The government has now processed those comments and it’s in the re-drafting phase. We’re hoping that I will have something in hand during the month of March and then we will be in a position to have it out for public consumption,” she said.

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