The Isle of Man Minimum Wage Act (“Act”) was passed in 2001 with its primary purpose to set a “minimum” hourly rate to be paid to workers so as to ensure decent standards of pay for those at the lower end of the labour market and promote fair competition between businesses. The minimum wage was initially conceived as a “safety net” for those suffering unexpectedly low levels of pay though this, as we go on to explain below, does not necessarily mean a wage that guarantees an acceptable standard of living.
The Act created a Minimum Wage Committee whose responsibility is to make recommendations on minimum wage periodically to the Isle of Man Government and Isle of Man Treasury (“Treasury”) who then consider the recommendations before the minimum rate is set in law. There is, however, no statutory requirement that the recommendations submitted by the Minimum Wage Committee must be followed.
Currently, the Act does not make any provision as to how the Minimum Wage Committee should determine what minimum wage ought to be, however regulations prescribe that there should be taken into consideration (amongst other things) the likely effect of minimum wage on employment rates especially amongst disadvantaged groups, inflation and the costs and competitiveness of business. In recent years, the focus on minimum wage has changed from a rate which provides a safety net to a rate which reflects the cost of living in the Isle of Man, i.e. the “living wage”, although they remain separate concepts.
Since 2017, the Isle of Man Government has calculated and compared the living wage with the minimum wage. This has been done on an annual basis with the aim of transitioning from a minimum wage model to a living wage model (current policy is for minimum wage to achieve parity with the living wage by July 2026). The living wage (which assesses the cost below which it is not possible to live to a standard society considers acceptable) has so far been higher than minimum wage and there remain challenges to closing this gap which include the wider economic impact on businesses of increasing their base staff costs.
A review of how the statutory minimum wage should be calculated and how it interacts with the living wage is expected to be brought before Tynwald by July 2025.
How much is minimum wage currently?
In the table below, we set out the current minimum wage rates and the *new* rates due to come into effect from 1 April 2025:
| Description | Current rate since 1 July 2024 | NEW rate from 1 April 2025 |
| Over compulsory school age but under 18 | £8.75 | £9.55 |
| Aged 18 and over | £11.45 | £12.25 |
The minimum wage does not need to be paid to apprentices (i.e. only trainees under a formal training agreement with their employer and the Department of Education, Sport and Culture) who:
- have not attained the age of 19; or
- have attained the age of 19 but are within the first 12 months of their apprenticeship.
However, an apprentice who has attained the age of 25 is entitled to receive the minimum wage.
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Useful Resource:-
https://www.gov.im/categories/working-in-the-isle-of-man/employment-rights/minimum-wage/
