(CMR) With a proposal to increase the minimum wage to CI$8.75, and then granting a maximum increase of CI$0.50 every two years, Cayman's minimum wage may not hit the $10 mark until 2030.
According to the Minimum Wage Advisory Committee's recent report, the Committee recommends quadrennial (every 4 years) comprehensive minimum wage regime reviews. This Minimum Wage Adjustment Mechanism (MWAM) is intended to systematically adjust the minimum wage using the Consumer Price Index (CPI) inflation every 2 years beginning in July 2025.
The Committee believes this mechanism offers predictability in its application by employers while maintaining smooth changes to the minimum wage. The minimum wage upward adjustment would be limited to CI$0.25 per hour or a maximum of CI$0.50 per hour at each adjustment period.
MWAM will continue to adjust the minimum wage even if the Cabinet does not commission the quadrennial (every four years) comprehensive review committee. Nonetheless, the Minimum Wage Advisory Committee report stated that the quadrennial review is needed periodically to correct any inefficiencies in the adjustment mechanism.
Adolphus Laidlow, director of the Economics and Statistics Office, explained that while the proposed minimum wage increase may seem low for those who will be receiving it, a balanced approach had to be taken as the increase could put pressure on small businesses. He explained that the increase has to be gradual so the economy is not severely affected.
The overall direct cost of the proposed minimum wage is CI$51.5 million per annum, with businesses paying CI$38.7 million while households will be responsible for CI$12.8 million. Caymanians will receive CI$13.2 million and non-Caymanian CI$38.3 million annually. The indirect cost is estimated at CI$15.0 million, of which 23 percent will go to Caymanians.
Employed persons benefiting the most from the proposed minimum wage are employees in households commonly known as “domestic workers” helpers, caregivers, gardeners, etc.). An estimated 2,424 domestic workers – 113 Caymanians (4.7%) and 2,310 non-Caymanians (95.3%) – will be paid a higher income.
The wage increase for elementary occupations, that is, workers employed in households (e.g., domestic helpers, gardeners), is estimated at CI$102.02 per employee per week. On average, administrative and support services activities (including occupations relating to security guards, janitorial, cleaning services, car rentals, etc.) will receive an additional CI$88.69 per employee per week.
Accommodation establishments will pay, on average, an additional CI$100.55 per employee per week to staff working for less than the proposed minimum wage, including the portion made up from gratuities. Similarly, a higher cost to employers for restaurants and mobile food services is estimated at CI$94.97 per employee per
week on average.
The public is being invited to provide feedback on the report before Parliament decides on the minimum wage, a process which could take months.
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