The Local Economy Forum has called on government to engage with them on its proposal for a change to the structure of minimum wage.
The Forum has proposed a reduction in the gross rate of pay, but an increase in the take home pay to those on minimum wage.
It’s proposed works can be paid the current living wage, which is above the current proposal voted through by Tynwald.
More Pay
The Forum believes this can be achieved by government foregoing the tac increases that they plan to take from the wage increase.
It suggests a modest tax credit to those on, or close to, minimum wage.
The Local Economy Forum wants to see a tying of the island’s minimum wage to the UK’s National Living Wage with an annual tax credit from government.
It says this would “ensure the low paid are not disproportionately taxed and take home the equivalent of living wage each year”.
Less Risk
Forum Chairman, Chris Robertshaw said: “Businesses want to see living standards improved for their lower-paid workers, but it’s counterproductive to put the full burden on the private sector whilst government bolsters its tax revenues to grow an already overweight public sector.
“Government needs to play its part in the process rather than serving minimum age every seat, pocketing 40% of the additional costs to businesses in increased taxes and watching our local economy wither away.
He added: “If government can take the blinkers off, they’ll quickly see that what we’re proposing is better for all parties – workers, employers, and government.
“The employee retains more pay than under the proposed new rate of £13.46, the employer is not driven to cutbacks of closure, and government recoups the modest cost of targeted tax credits through lower inflation, higher VAT receipts and lower welfare costs.
“We call on government to engage with our proposals urgently. Businesses have ben told to use the next five months to get ready for the impact, and therefore many are implementing or preparing to implement the only option available to them, namely redundancies and operational cutbacks.
“Unfortunately, people are therefore already losing their jobs as a consequence of the government’s ill-conceived approach, and we have to act quickly if we’re to arrest the damage.”
