(CNS): Compliance and enforcement will present a “major, major challenge” for the agency responsible when the new minimum wage is rolled out, the body created to review the existing regime has warned. The chairperson of the Minimum Wage Advisory Committee, Lemuel Hurlston, said that he and his members suspect that the labour department is not sufficiently resourced to meet the challenge.

During an online town hall meeting on Wednesday, when the MWAC gave an overview of the work it has been doing, Hurlston said that, based on the information the members had gathered, they would be making recommendations about dealing with enforcement in their final report.

“We believe that compliance and enforcement going forward is likely to become a major, major challenge,” he noted. However, he said the MWAC suspects that the department responsible for administering, regulating and enforcing labour legislation “is not sufficiently staffed or sufficiently resourced to do the work to the standard that the public is expecting them to do it to”.

The committee will also be making recommendations about the need to modernise outdated elements of the existing labour legislation, Hurlston said.

Shomari Scott, a member of the committee who represents the Chamber of Commerce, stressed that the ability to enforce the law was critical in order for it to work. “When part of the mandate is to look at the most vulnerable in society… if we are not doing a good job… with the enforcement of whatever we decide the minimum wage is, have we truly achieved the mandate and objective of the committee?” he asked rhetorically.

There would always be “bad apples”, he noted, and if they weren’t forced to comply, it would undermine the goal of the mandatory basic wage.

The committee has been gathering information over the last eight months, and during this time it has documented worrying exploitation of low-paid workers. Some were not paid overtime or pensions, while some people employing domestic workers were taking and retaining their employees’ passports.

Catherine Welds, who represents employees on the committee, described how workers here are being mistreated and exploited and urged people to learn their rights. She explained that the more employees understand their rights, the less vulnerable they are to exploitation. She encouraged them to contact WORC, the Department of Labour and Pensions or to make use of the Legal Befrienders free legal services.

“Please know your rights… and don’t be afraid to report labour infractions,” Welds said.

Very few people in full-time work are earning the current basic wage of CI$6 per hour, set more than seven years ago. So far, the committee has declined to state the exact figure it will be recommending to the government but has said it will be more than the current minimum wage, which is widely thought to be far too low.

That means more people will be earning less than the recommended rate when it is announced. While there will be a notice period for employers to prepare, with more workers impacted by the rise, there will be a greater risk of employers falling foul of the law.

While the current minimum wage is widely considered inadequate, the committee has heard from the owners of small businesses who claim they could be put out of business by anything more than a two-dollar increase — which would make the minimum wage $8 per hour.

According to the Economics and Statistics Office, the poverty line in the Cayman Islands is $6.50 per hour. Ralston Henry, senior economist with the ESO, explained that the starting point for working out that figure was the 2007/8 National Assessment of Living Conditions, the only poverty survey that has ever been done in Cayman.

He said the figures were adjusted for inflation to come up with a potential absolute minimum level of pay that would allow people to have enough to eat. He admitted that there were flaws with this calculation but did not indicate if it took into consideration utilities, accommodation and deductions for pensions and healthcare insurance.

Based on an eight-hour day and an average of 22 working days in a month, $6.50 equates to CI$1,144 per month, a figure most people would find impossible to stretch to cover rent, utilities, mandatory deductions and food.

Most workers being paid at the minimum wage are work permit holders, though around 800 to 900 local workers are currently being paid $6 an hour. These people often receive government assistance, which means that taxpayers are indirectly subsidising employers who are exploiting their staff.

However, Henry said the need to protect business was a priority for the ESO, which has a supportive independent role in the work of the committee. Its goal of “protecting the core fabric of the economy” means the basic wage is unlikely to increase significantly.

“The process of determining the minimum wage must be guided by the balance between both sides of the coin,” he said. The MWAC looked at labour-intensive, vulnerable businesses that would be disrupted by a basic wage that was too high, which would, in turn, disrupt the broader economy.

However, he also noted that any increase in pay for workers would go back into the economy as it would allow people to buy more goods and services.

Henry stressed the differences between a minimum wage and a living wage — a point that has been a topic of conversation during the consultation period. A minimum wage is enshrined in law but does not define a certain standard of living. He said that if employers were made to pay living wages, this could have an adverse effect on them.

The ESO has also conducted surveys for the committee, and when the members settle on a recommended figure, the office will run the models on that number and make sure it does not undermine the commercial operations of employers.

The MWAC is nearing the end of its public consultation, with just one final meeting on Cayman Brac on 7 September. Work is now underway on drafting the final report, which is expected to be handed to Cabinet by 30 September before being made public.

People can still submit comments by emailing minimumwage@gov.ky

Se the online town hall meeting below:

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