1 November 2022 Minimum Wage Guidance Note 3

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.

Minimum Wage 

Minimum wage (Part 4 Articles 16 to 43)

1. Minimum Wage increases from 1 November 2022 & 1 January 2023

JACS have produced an additional Guidance Note (16) to assist employers.

From 1 November 2022

The minimum wage is £10.50 per hour (an increased from £9.22)

2. An employee who is above compulsory school age is entitled to receive the minimum wage irrespective of their occupation, employment sector, gender or racial group. The minimum wage rate is prescribed by the Social Security Minister.

From 1 November 2022 

The first year Trainee rate is £7.87 (increased from £6.91)      

The second year Trainee rate is £9.19 (increased from £8.07) 

3. A trainee rate, lower than the minimum wage, may be paid to an employee of any age who is undertaking approved training for a maximum period of two years, at any time within the first two years of a new job. 
4. The maximum two-year training period starts running from the first day of employment in the particular job. Training does not have to start on day one of the new job, but the trainee rate may only be paid whilst an employee is undertaking approved training.  
5. Training is 'approved training' if it is formal training that has been agreed in writing by both parties before employment starts, that has a defined structure and objectives that relate to the performance of the employee in their particular job, and training outcomes are assessed and documented. More detail is provided in a JACS guide to approved training.
6. An hourly rate of £7.87 is payable for a maximum period of one year, whilst an employee undertakes approved training at any time within the first two years of a new job.
7. An hourly rate of £9.19 is payable where an employee has already undertaken approved training for a total of one year in a new job and whilst that employee continues to undertake approved training for up to one further year in that job, up to the maximum of two years.

From 1 January 2023

8. The maximum values that may be offset each week where accommodation, or accommodation and food, are provided to an employee, are:

• £115 for accommodation, or £153.28 for accommodation and food, where the employee receives the minimum wage, or
• £86.25 for accommodation, or £114.97 for accommodation and food, when the employee receives, either the first year or second year trainee rate. 

9. Where accommodation or accommodation and food are provided to employees as part of their employment package, maximum values are attributed to those benefits which can be taken into account when calculating whether an employee has been paid the Minimum Wage. Those are known as offsets. No other form of benefit (e.g. utilities bills) may be offset against the Minimum Wage.
10. "Food" is defined as 3 adequate meals on each day on which the employee is employed. Employers may not offset a proportionate amount of pay for less than 3 meals per day and a charge for food may not be offset unless accommodation is also provided.
11. "Accommodation" must be available to the employee from midnight to midnight on each day of employment.
12. 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. Tips, gratuities and service charges must not be counted in calculating whether or not the minimum wage is paid. 
13. 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 the minimum wage has been paid to an employee.
14. The Regulations do not state what count as 'sufficient' records. This is in order to provide flexibility as the situation will vary. 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 them to provide this proof. If an employer is unsure if the records being kept are sufficient records they may wish to seek independent legal advice.
15. For an employee who is paid well above the minimum wage, the employer's existing pay and time records may be sufficient to show that the employee is receiving more than the minimum wage.
16. It is for the employer to judge when, for any particular employee, they 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.
17. On or before each pay date, an employee must be given a written itemized pay statement (Article 51 of the Law), failure to do so may result in an application to the Tribunal and an award of up to 4 weeks pay being ordered by way of compensation.
18. 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.

• 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 premiums;
• 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.

19. 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 electronically.

Enforcement

19. An employee has a right, if they have reasonable grounds to believe that they have not received the minimum wage, following reasonable notice to the employer in writing, to inspect and to copy such records that relate to their own employment. This right may be exercised by the employee alone or accompanied by another e.g. a colleague, friend or other person.
20. If the employer does not allow access to records within 14 days of receiving a written request (or a later time mutually agreed between the 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 hourly minimum wage. If an employee has been paid less than the minimum wage then, in addition, they will be entitled to be paid the difference between the wage received and the minimum wage for the period that the claim referred to.

21 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. An employer who fails to comply with the minimum wage provisions may be served with an enforcement notice requiring that the law be complied with.

22. 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.
23. An employee has the right not to be subjected to any detrimental act (or inaction) by their employer because the employee took action to enforce minimum wage related rights. If an employee believes that they have suffered a detriment then they 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 against the complaint.
24. If the Tribunal upholds the complaint then it may make an award to be paid by the employer to the employee 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.
25. 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.

 JACS 20 September 2022