The creation of a minimum wage for Bermuda took a step closer on Monday as legislation to set up a group that will consider pay rates was passed by senators.

A six-strong Wage Commission will recommend a minimum hourly wage and a living wage as part of a bid to protect workers from low pay.

The Employment (Wage Commission) Act 2019 said a living wage rate was the “amount of income necessary to afford an employee and his household a socially acceptable standard of living” and covered food, clothing, housing, medical treatment, childcare and transport.

James Jardine, an independent senator, said there were “many studies and articles” about the advantages of the introduction of a minimum wage as well as its possible economic drawbacks.

He said: “My own view on this complex subject is there can be real benefits to those who remain employed after the implementation of a minimum wage regime and that the possible economic downsides depend entirely on the country in which the minimum wage is being implemented, its own economic circumstances and, probably more importantly and just as key, the level at which the minimum wage is set.”

Mr Jardine added he supported the establishment of a wage commission.

He said: “The level that is set for the minimum wage will determine what impact it has on the cost of living. It will impact, probably going forward, not so much for the existing jobs, but for job creation; it will impact the jobs that may or may not be created in the future.”

Nick Kempe, the One Bermuda Alliance Senate Leader, said it was difficult to understand what the effect of a living wage would have on different groups of people and what impact there might be on jobs held by foreign workers at the lower end of the pay scale.

He asked: “If a certain wage was raised, would that all of a sudden entice Bermudians to work in those industries?

“Would it simply be increasing the amount of cash sent overseas for people that are able to essentially reduce their cost of living in Bermuda as they’re looking for economic opportunity and this kind of thing?

“There’s a clear distinction between exploitation and people who choose to, say, bunk as an adult because their spouses or children are back home, and that’s a beneficial, short-term economic position for them.”

Anthony Richardson, a Progressive Labour Party senator, pointed out there was a “human element” to the wage commission debate.

He said: “The reality is that the cost of fuel, food, vehicles, electricity, bank fees and all the rest of it, they are the same for all of us, irrespective of how much money we may earn.”

Dwayne Robinson, an OBA senator, said he was concerned about the impact of a statutory wage regime on small businesses.

Vance Campbell, of the PLP, said an education campaign should be mounted for people who will benefit from pay increases, to help make sure any additional funds were spent, for example, on bills they were struggling to pay rather than trips.

Jason Hayward, the PLP senator who moved for the Bill’s approval in the Upper House, said: “I don’t think what we will find is the commission setting an unreasonable wage that creates an undue burden on business.

“While we remain concerned about business interests, our priority of concern should be the workers, the people who work nine to five, day after day, and can’t make ends meet.”

Senators passed the Bill without objection yesterday.

They also approved the Public Service Superannuation Amendment Act 2019 to raise the mandatory retirement age for public service workers from 65 to 68. It will not affect police officers, firefighters, prison officers, Bermuda Regiment soldiers or teachers.

Senators also passed the Fund Administration Provider Business Act 2019, which was designed to provide greater consistency to how fund managers carry out their roles and how they are supervised by the Bermuda Monetary Authority.