COMMANDER George Overton, director of operations for Guardsman Group Limited, and president of the Jamaica Society for Industrial Security (JSIS), says the country should brace for a massive fallout in the industrial security services sector, consequent to the 33 per cent increase in security guards’ wages which takes effect on June 1.
“I didn’t expect it as high as [announced], but I expected it. It is a matter of great concern for us in the industry. We have just gone through the increase to become compliant for April 1, which is basically a 42 per cent increase, and now you’re doing a 33 per cent increase on top of it. When you compound it is almost a 100 per cent increase in the cost of security. I believe that the fallout in the industry is going to be significant and severe. We can only brace to see how we maintain ourselves and recover,” said Overton.
The compliance issue is related to the directive from Government for guards to be recognised as full-time employees and not contractors, following a court ruling.
On Thursday, Prime Minister Andrew Holness, in his budget presentation in Parliament, announced the jump in minimum wages for security guards, taking salaries from $10,500 weekly to $14,000. He also announced a 44 per cent increase in the national minimum wage, which will move from $9,000 per 40-hour work week to $13,000 per 40-hour work week.
Overton said firms which engage security services but have not lived up to their end of those arrangements can expect challenges ahead. “A number of companies are going to be making business decisions in their April 1 transition, and those who are habitual bad players will be left without service,” Overton stated.
Guardsman Group is one of the largest providers of industrial security services on the island.
Prime Minister Holness advised that the $1,000 difference between the national minimum wage and the minimum wage for the security guards will be removed at the next increase.
In the meantime, head of the Jamaica Confederation of Trade Unions Helene Davis Whyte said the 44 per cent may not be significant from the point of view of the workers, given the low starting point.
“What we generally look at when we are looking at a minimum wage is what exactly can it do, especially for a single-person household. The truth is that where it has gone cannot provide all the very basic things still because of what has happened with inflation over the last couple of years. But the major problem is that we are starting from a very low base,” she told the Jamaica Observer.
Davis Whyte noted that over the years the Minimum Wage Commission had formed its opinion based on consultations, along with its own information regarding the economy. “A large part of that is balancing the interest of the minimum wage earner as against the interest of those persons who have to pay minimum wage earners. So it was a delicate, and still is, a delicate balancing act, but what has been done is going to improve somewhat the standard of living of persons who are minimum wage earners,” she explained.
The prime minister told the House of Representatives that since assuming office in 2016 the minimum wage had increased from $6,200 to $13,000, which means his Administration had increased the minimum wage by 110 per cent in seven years.
Holness said the Government recognises that the contribution of minimum wage earners, such as household workers, artisans, labourers, store clerks, and security personnel, is vital to the success of manufacturers, hotel professionals, lawyers, doctors, and teachers in meeting the country’s national productivity and service targets.
Additionally, the flat rate for the minimum weekly National Insurance Scheme (NIS) pension will be increased by 74 per cent, moving from $1,700 to $3,000. This means pensioners who currently receive $2,550 per week will receive $3,500 per week, while those at the top will move from $3,000 to $4,200 per week, representing a 37 and 24 per cent increase, respectively
The prime minister advised that as a result of deliberate steps to reform pension benefits, based on the performance of the National Insurance Fund, the old-age, widow, widower and invalidity pensions and all other NIS benefits will be increased, effective April 1, 2023. Those rates are to be announced by Labour and Social Security Minister Karl Samuda.