The Cayman Islands government is to convene a press conference to unveil the report of the Minimum Wage Advisory Committee proposing a substantial increase in the minimum wage from $6 to $8.75 an hour (about $10.50).

The island government will now consider when or if to implement the proposed increase that would cost business and residential employers about $50 million.

The Cayman News Service said the report, published to the government website on Monday, came after a yearlong review and nearly six months after the committee delivered the report to the government.

CNS said the proposed rate was expected to “be closer to $10, given the very high cost of living”.

It would benefit an estimated 10,457 workers, including 8,033 business employees and 2,424 domestic staff. Only 23 per cent of the total beneficiaries would be Caymanians, while the majority would be permit holders.

The report, which was sent to the Ministry of Labour, said: “There could also be ‘spill over’ benefits for thousands more workers as businesses adjust salaries across the pay scale in line with the new mark.

CNS stated: “The government has not yet said if it will adopt the MWAC recommendations. Labour Minister Dwayne Seymour, who is clearly conflicted because he employs a number of minimum-wage workers in his baggage handling business, has already said he thinks the rate is a problem and will not assist Caymanian workers.”

The CaymanCompass quoted the report as saying that the mandate of the committee was to address exploitation and provide “real relief” to the most vulnerable, although it cited an analysis from the International Labour Organisation in acknowledging that an actual “living wage” in Cayman would be in the range of $10.38 to $16.95 per hour.

The publication said: “Despite that, it argues that $8.75 would be a ‘fair and acceptable’ minimum wage, defined as the floor rate a person could earn without falling into poverty.

“The committee, led by former head of civil service Lemuel Hurlston, considered the impact on businesses and retail prices, as well as workers themselves.”

The report was quoted: “Setting the minimum wage requires a balancing act to ensure that there is economic stability but, at the same time, allowing people to meet their basic needs.

“The committee considers this [$8.75] a fair wage that would be affordable to most employers and beneficial to low-wage employees.”

The workers most impacted by the change include domestic helpers and nannies, security guards, janitorial workers, hospitality staff and gardeners, the Compass said.

The spending power of the existing minimum wage of $6 – set in 2016 – has fallen to just $4.92, according to the report, which also recommends inflation linked increases and a quadrennial rate review.

The Compass said: “The report also recommends phasing out a loophole that allows hospitality businesses to use gratuities for up to 25 per cent of their employees wages.

“Initially hotels and restaurants will be allowed to pay a lower rate of $6.56-an-hour with the rest made up by gratuities. But the allowable gratuity contribution will drop by 5 per cent annually for the next five years.”

“Starting July 2029, there should be no gratuities contribution to the minimum wage,” the report notes.

• To read the Minimum Wage Regime in the Cayman Islands, see Related Media

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