(CNS): Some of Cayman’s lowest-paid workers have complained that employers using gratuities to top up wages to conform with the national minimum wage of $6 per hour are misusing the system. Hospitality employers, such as hotels and restaurants, are allowed to pay workers $4.50 per hour if they also receive at least $1.50 per hour from managed gratuity systems approved by the labour department. But hospitality staff say it is time to close this loophole because they are being short-changed.

At a public meeting Wednesday evening, held by the National Minimum Wage Advisory Committee (MWAC), the issue of how hospitality workers and some domestic staff are paid was raised by a number of attendees who described a litany of issues that this carve-out has caused.

Because employers are dipping into gratuity pools to top up workers’ pay, some are still earning just $4.50 an hour on paper, which means that their pension contributions are based on that hourly rate. In addition, they said, it can be hard to persuade banks to take the part of their pay that comes from gratuities into consideration if they apply for loans and mortgages.

Even where employers, as per the law, only use gratuities to top up basic wages, with the rest being properly distributed among all non-management or supervisory staff, some workers feel that the situation is unfair.

But it appears that in some cases, employers are using tips to top up wages where there is no official scheme and the extra $1.50 is paid in cash. In some cases, gratuities are being used for entire wage packets, even those of more senior staff, reducing the money normally shared among the lowest paid and undermining pay levels at a time of crippling inflation.

MWAC Chairperson Lemuel Hurlston said that his team was aware of the various problems related to how gratuity schemes are being used to top up workers’ wages.

“The committee is very well aware that the issue of gratuities is very much a controversial one. We are also aware that several complaints have been made in regards to the distribution of gratuities,” Hurlston said after a number of people raised those issues and pointed to the impact it has on them as workers in the tourism sector.

He also noted the passage of a private member’s motion in parliament earlier this year to establish a task force to look at how hotels, resorts, condo complexes and restaurants that have gratuity management systems are distributing that money.

“That is an investigation to take its own natural course,” he said, noting that employers with legitimate tips schemes should be following the rules, which would mean their workers have nothing to worry about.

During the course of the meeting, numerous concerns about the current low level of the minimum wage were raised by the audience. People pointed to the long list of socio-economic problems that have arisen as a result of the low wages people are earning in Cayman, one of the most expensive places in the world to live. The $6 minimum wage was introduced in 2015 when inflation was running at -2.8%. Since then the cost of living has reached unprecedented levels.

Hurlston said that the committee’s review of the national minimum wage is not a panacea — though it appears the MWAC will be recommending a notable increase. He said it would not solve all of the economic challenges, but it is part of a complex set of labour laws and benefits that address some of the growing challenges.

As the national minimum wage has not been reviewed for eight years, officials believe the number of people only earning $6 an hour is relatively small. But at this point, no figures have been released to show how many people are actually surviving on the minimum wage.

The review period began in February, and the committee is scheduled to submit a report and recommendations to the government in September. This means that members of the public have just a few more weeks left to complete the online survey or submit comments.

According to officials, more than 5,000 people, both employers and employees, have participated in the survey, and hundreds have engaged in the various stakeholder meetings and focus groups.