Minimum Wage

Guidance note 3 to the EMPLOYMENT (JERSEY) LAW 2003

This statement is intended to explain to employers and employees the principal requirements of the Law. It is not intended to cover all the requirements of the Law, nor does it represent a statement of the Law. Any reference to male persons in the statement should be read as including, or being, female persons where this is appropriate.

Minimum Wage

(part 4 Articles 16 to 43)

THE EMPLOYMENT (JERSEY) LAW 2003 - Guidance Note 3

Minimum wage (Part 4 Articles 16 to 43)

1. A minimum wage comprises a minimum hourly wage irrespective of a person’s employment, gender or racial group and is payable to an employee providing that he is above compulsory school age, the rate to be determined by the Social Security Minister from time to time.

(The minimum wage is £5.40 per hour from April 1st 2007 and £5.80 from April 1st 2008)

2. A trainee rate may also be specified from time to time. This rate can apply for a maximum period of 1 year for new employees on accredited training programmes, approved in writing by the Social Security Minister, irrespective of their age. Please see the relevant Code of Practice.

(The trainee rate is £4.05 per hour from April 1st 2007 and £4.35 from April 1st 2008)

3. A charge for a minimum standard of accommodation or accommodation and food can be "set off" against the Minimum Wage, the level of such charge to be determined from time to time. No other form of benefit (e.g. utilities bills) can be taken into account in determining whether the Minimum Wage has been paid.

"Food" is defined as 3 adequate meals on each day on which the employee is employed. Employers may not off set a proportionate amount of pay for less than 3 meals per day and a charge for food may not be off set unless accommodation is also provided. "Accommodation" must be available to the employee from midnight to midnight on each day of employment.

(The maximum off set for accommodation and food is £78.80 per week from April 1st 2007 and £84.63 from April 1st 2008. The maximum offset for accommodation only is £59.10 per week from April 1st 2007 and £63.47 from April 1st 2008).

4. An employer is obliged to maintain certain records, including a record of the employees actual hours, in the form of a single document for each pay period (e.g. weekly), sufficient to establish that the employer is paying a rate at least equal to the minimum wage.

The records need to be kept because they will help any employee, employer, enforcement officer, tribunal or court determine whether the minimum wage has been paid. If there is a dispute, the burden is on the employer to prove that he has paid the minimum wage to an employee.

The Regulations do not state what count as ’sufficient’ records. This is in order to provide flexibility as the situation will vary from employer to employer and from employee to employee. It is left to the employer’s judgement in each case. However, employers should be aware that if an employee brings a claim for unpaid minimum wage to a tribunal or court, the burden will be on the employer to prove that the minimum wage has been paid. The employer is likely to need records to enable him to provide this proof. If an employer is unsure if he is keeping sufficient records he may wish to seek independent legal advice.

For an employee who is paid well above the minimum wage, his employer’s existing pay and time records may be sufficient to show that the employee is receiving more than the minimum wage.

It is for the employer to judge when, for any particular employee, he should keep more detailed records. The closer to the minimum an employee’s gross pay is, and the longer the employee works in a pay reference period, the greater the risk that the employee could be paid below the minimum wage. On or before each pay date, an employee must be given a written itemised pay statement (Article 51 of the Law)

The extra information listed below could be kept about payments made to employees and hours worked in a pay reference period. This is not intended to be a definitive or comprehensive list. The details of records to be kept may differ from case to case and also according to the type of work being done.

- gross pay paid to the employee;

- actual hours worked by the employee (e.g. per pay reference period, per day or per week);

- overtime/shift premia;

- amount of unconsolidated allowances (e.g. petrol, telephone and wet weather allowances);

- any deduction or payment for accommodation, or food with accommodation;

- tips paid to the employee through the payroll;

- any benefits received by the employee;

- any absences, for example, rest breaks, sick leave, annual leave;

- any travel or training during work hours and its length;

- bank statements or other commercial documentation.

Employers who have a ’training agreement’ with an employee must also keep a copy of that agreement. Records must be kept for a period of 10 years and must be in the form of a single document for each pay period (e.g. weekly). Records may be kept on computer.

An employee has a right, if he has reasonable grounds to believe that he has not received the wage, following reasonable notice to the employer in writing, to inspect and to copy such records that relate to his own employment. This right may be exercised by the employee on his own or accompanied by another e.g. a colleague, friend or other person.

An enforcement officer may also visit a company and ask to inspect the employer’s minimum wage records or require them to be produced on reasonable notice.

5. If the employer does not allow access to records within 14 days of receiving a written request (or a later time mutually agreed between employer and employee), then within the next 13 weeks the employee may lodge a complaint with the Tribunal. If the Tribunal upholds the complaint then it may instruct the employer to pay the employee a sum not exceeding 80 times the current minimum hourly wage.

6. If an employee has been paid less than the minimum wage then in addition to the sum outlined in 5 above, he will be entitled to be paid the difference between the wage received and the minimum wage for the period that the claim referred to.

Enforcement notice

7. An employer who fails to comply with the minimum wage provisions may be served with an enforcement notice by a government official requiring that the law be complied with. An employer may appeal to the Tribunal against an enforcement notice within 4 weeks of the date on which it was served. If an enforcement notice is not complied with then the employer may be served with a penalty notice (twice the minimum wage in respect of each employee, for each day of non-compliance) and may be sued for any sums due to the employee(s) in the Civil Court.

8. An employee has the right not to be subjected to any detrimental act (or inaction) by his employer because the employee took any action to secure any benefit due to him under the minimum wage provisions. If an employee believes that he has suffered detriment then he may lodge a complaint with the Tribunal within 8 weeks from the date of the alleged action (or inaction). The employer must show the grounds on which any act (or inaction) was done in order to defend himself against the complaint.

If the Tribunal upholds the complaint then it may make an award to be paid by the employer to the complainant at a level that it believes to be just and equitable in all the circumstances, subject to an upper limit to be determined from time to time.

9. An employer who wilfully neglects or refuses to pay an eligible employee the minimum wage or who fails to keep the records required is liable to a fine up to £5,000 (applies equally to any other person whose act or default results in this offence).

An employer who makes false records (or allows them to be made) or allows any record or information that he knows to be false to be produced is liable to a fine or to imprisonment for up to 12 months, or both. These penalties apply equally to any person who aids, abets, counsels or procures an offence.

10. Certain "special classes of person" may not be covered by the minimum wage provisions e.g. those not covered include: mariners employed wholly outside the Island or not ordinarily resident in the Island; share fishermen; charities, voluntary organisations or statutory bodies; prisoners (except those undertaking work outside the prison under a rehabilitation programme, who must be paid the minimum wage); residential members of religious and other communities.

Further advice or information and copies of this and other guidance notes may be obtained from the Jersey Advisory and Conciliation Service in person or by telephoning (01534) 730503; fax (015434) 733942; email jacs@jacs.org.je ; www.jacs.org.je

Copyright restrictions are waived on this document and it may be copied providing that the content is not altered in any way.

Djw/jacs/March 2008