THERE IS NO “PERFECT” TIME to increase the national minimum wage.
That is the response of Minister of Labour Colin Jordan to those who believe that companies are not being given enough time to adjust to the June 1 hike.
While acknowledging there will be some impact, he said there are ways for companies to properly manage it.
“There is no perfect timing; there is going to be an impact somewhere along the line,” he said.
Jordan, a former tourism industry executive, said companies could tailor their employee contracts with clauses that make provisions for future changes such as a national minimum wage increase.
“If a Government action has the potential to impact the business that could be a minimum wage increase or the rate of VAT (value added tax), my suggestion is that businesses attempt to have their contracts drafted in such a way that would allow for the impact of the direct Government action to flow through.
Possible solution
“I’ve dealt with a situation like that before and that was how we attempted to address it. I suggest that it is something businesses [can do]. I’m not saying it is a panacea or can solve everything, but this is what I suggest,” he told the DAILY NATION yesterday at the Lloyd Erskine Sandiford Centre, Two Mile Hill, St Michael. This was ahead of the Barbados Employers’ Confederation’s (BEC) business luncheon which was part of its week of activities.
During the Financial Statement and Budgetary Proposals in March, it was revealed that there would be an increase in the minimum wage from January 1, 2026. On May Day, Jordan announced that the wage would increase to $10.50 per hour, effective June 1, up from the current $8.50 per hour. The increase will also affect the sectoral minimum wage for security officers.
On Monday, BEC executive director Sheena Mayers-Granville said companies had not been given enough time to adjust to the increase. She urged the Government to ensure employers had a reasonable amount of time to adjust their budgeting plans.
“We have to consider the fact that businesses do budgeting, forecasting, they engage in contract negotiation, and therefore telling anyone that your rates are going to change in the next two, three or four weeks . . . we don’t think that is adequate notice,” she said.
Minimum wage was last increased in 2021.
Jordan reminded the public that there was an option to object, and some people had already done so.
“The 40-day notice allows persons and businesses to submit an objection, and we’ve got some responses. There were a couple that wrote about objections, and the interesting thing is that you got objections to the amount, that the increase is too low,” he said.
He said the Minimum Wage Board will be meeting to assess the objections before month-end.
“I will await their recommendations coming out of their discussion,” he added.
Yesterday, the BEC panel discussion was held under the theme Barbados: A Brain Drain Nation Or Expat Haven?
Director of the CARICOM Single Market and Economy Unit, Leo Preville, Senior Immigration Officer Tricia Lashley, Immigration Officer 1 Jennifer Callender and Professor of management and organisational behaviour at the University of the West Indies Cave Hill, Dwayne Devonish, formed the panel. Inchcape’s head of human resources, Caribbean market, Sanella Sanford, moderated.
Devonish applauded the minimum wage hike, but was fearful of the impact it could have on small businesses.
“I commend the move towards a minimum wage hike. But I’m always cautious as an academic and a researcher to recognise that there are a lot of small businesses that are not ready to absorb the costs that naturally are [affected] by a minimum wage hike,” he said.
He encouraged organisations such as the BEC as well as the Government to implement other policies that could assist micro-sized enterprises and prevent some from engaging in underhanded practices.
“Their staff complement is much smaller, so one would think if there is a minimum wage hike, that just a few employees are being affected, but we have got to recognise there are still a lot of costs that small businesses are still struggling with.
“There would always be that business that would take a shortcut to find a way to get around the law. A minimum wage hike has to be complemented with other policy modifications to offset the cost for small businesses and to prevent them from engaging in what I would call unscrupulous practices,” Devonish said.
He stressed that in addition to wage increases, working conditions must also be improved.
“It’s not just the bread and butter wages. We have to make sure that people feel comfortable with the working conditions of where they work or otherwise they are going to leave this country. They are not going to feel comfortable staying here,” he added. (TG)
