Minimum wages may have been considered common practice across most of the world for many years, however, Bermuda is just now in the process of developing them. Over 90% of the nations that are members of the International Labour Organization, have already created minimum and statutory national wage plans. As of this month, the new Wage Commission has been developed and proposed, which may lead to the future creation of a structured minimum wage policy in Bermuda in the not so distant future. Based on the overall discussion surrounding the new Wage Commission, both a minimum wage and a standard living wage rate are being discussed within the government.
This new Wage Commission has been created by both the finance and labor departments of the Bermuda government and will be responsible for researching and analyzing country specific data to determine what would be considered a minimum wage or a living wage. Once the initial research has been completed, updates will be analyzed every three years to ensure that the standards for minimum wage and living wage are upheld as the future economy changes.
When analyzing a living wage, it is important to look at a variety of different factors including the cost of food, housing, personal items, health care related items, childcare, and transportation options. In some nations, the created living wages may vary based on different employment categories, industries, regions, or based on employees with different personal circumstances.
When creating a standardized minimum wage and living wage program, it is likely that expenses such as payroll and benefits costs for organizations will increase. In some cases, these increases may be quite dramatic. Employers may hire fewer employees if they cannot afford as many as before, or cut the working hours of current employees in order to maintain their current financial mode. This has happened in other economies around the world and has perpetuated the upsurge of the gig economy for individuals to be able to work more hours and make more money at jobs they can perform outside of their standard working hours.
Three years is a fairly long time for organizations to determine what they will do when the inevitable minimum wage and living wage structures come into effect. This time that the Wage Commission is spending on gathering and analyzing data should also be used in a similar effect by organizations with operations in Bermuda. While a minimum wage or living wage has not been proposed just yet, organizations can run through hypothetical situations to determine the maximum wages they would be able to pay their current employees and then create a plan of how they would need to restructure their organization if the proposed minimum wage or living wage is higher than what they can maximally afford.
Overall, three years can be plenty of time for organizations to prepare for the upcoming changes and adequately mitigate the risk of needing to terminate employees or cut hours due to the standardization of higher minimum and living wages.
