The Tribune

• Suggests tipped workers get less than full rise

• Out Islands urge delay until October re-open

• Minister: Minimum wage rise before year-end

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian hotel industry has “intervened” over the upcoming minimum wage increase to propose that employees earning the bulk of their income from gratuities receive less than the full rise, it was revealed yesterday.

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, said this was justified by the “unique arrangement” in the industry where tipped workers receive “generous gratuities” on top of minimum wage base pay.

He was quick to emphasise that the sector was not “indifferent”, or opposed to, a minimum wage increase - especially for non-tipped employees earning the current $210 weekly floor. However, Mr Sands said the matter was “a pivotal, pivotal concern” that both the Government and National Tripartite Council should account for.

He delivered this message to Senator Michael Halkitis, minister of economic affairs, at yesterday’s virtual BHTA quarterly meeting, saying: “Our hotel sector, we obviously pay minimum wage, but also create a significant amount of opportunities for gratuities. 

“We would like you [Mr Halkitis] to take that consideration back. That’s a unique element of our sector; the value of gratuities people receive on top of the minimum wage...... That is a pivotal, pivotal concern for our sector. We’re not indifferent to some type of minimum wage increase, obviously, but we believe the issue of gratuities should be a consideration in our sector.”

Mr Sands also joked with Mr Halkitis that “you’ll be creating some monsters there” should the Government give tipped employees the full minimum wage rise on top of the automatic 15 percent gratuity they earn from customers. Workers in the hotel industry, especially those such as restaurant waiters/servers and others in food and beverage, earned thousands of dollars in tips and gratuities that accounted for the majority of their annual take home pay pre-COVID.

The industry’s post-pandemic rebound means tipped earnings are again picking up towards pre-pandemic levels. Explaining the sector’s position in a subsequent interview with Tribune Business, Mr Sands said: “We’ve made an intervention that, within the hospitality industry, there’s a unique arrangement whereby, notwithstanding some individuals are paid the minimum wage, they are also paid generous gratuities.

“We accept there are circumstances where persons are only paid the minimum wage and no gratuity, and the level should increase for them, but possibly consideration should be given for those making minimum wage and also gratuities - a different level of increase. Hopefully, the National Tripartite Council will look at that.”

The Council, which features employer, union and government representatives, was created to deal with all labour-related matters in The Bahamas. It has been charged with doing the necessary research to support the recommended minimum wage increase, which is then forwarded to the Government for debate and implementation via Parliament.

The Davis administration, while in Opposition, pledged to increase the private sector minimum wage from the present $210 to $250 per week - a 19 percent rise. It is unclear whether the Council’s recommendation will be in line with this, but it is unlikely to be much less. And the hotel industry, given the size of its workforce and the number of individuals earning minimum wage as their base pay, is among the sectors most likely to be impacted by the resulting rise in labour costs.

“We’re not saying: ‘Don’t give anything’,” Mr Sands explained, but reiterated the sector’s position that a minimum wage for tipped employees cannot be viewed in isolation given that they “receive much more in gratuities”. The BHTA chief, though, acknowledged that unionised employees have not seen a wage increase for almost a decade as no new industrial agreement has been sealed with the Bahamas Hotel, Catering and Allied Workers Union (BHCAWU) in that time.

“There’s some sensitivity on behalf of the industry that many persons in unionised categories have not had an industrial agreement that allowed any increase in wages, although since the inception of the minimum wage this is the third one [increase] introduced. There’s been a significant increase as a result of movement in base rate pay,” Mr Sands added.

He pointed out that rising occupancies, as well as inflation’s impact on menu prices and food costs, meant that gratuity payments were increasing. But, with US inflation at a 40-year record high and The Bahamas importing most of its goods from that nation, the escalating cost of living crisis means there is growing pressure on the Government to put more money in the pockets of lower-earning, vulnerable Bahamians via a minimum wage increase.

While a minimum wage increase is a question of ‘how much’ and ‘when’, rather than ‘if’, Mr Sands said: “The other point we raised, especially for a lot of Family Island hotels where there is a period of closure for the industry, [is for the increase] to come into effect when they’re open again; possibly October.”

Kerry Fountain, the Bahamas Out Island Promotion Board’s executive director, spoke to these concerns during the BHTA meeting in relation to a “livable wage” - not a minimum wage increase. He urged the Government, if it planned to implement such a concept this year, to do it in late October/early November “when most of the hotels are open, and not September when most of the hotels are closed, as they simply do not have the revenue” to cover it.

Mr Sands moved swiftly to correct this, pointing out that the Government is focused on a minimum wage increase as opposed to introducing a ‘livable wage’, although the hotel industry’s concerns about the former’s timing remain valid. “We have it on good authority from government that they will go out to a private sector/public sector consultation before doing this,” the BHTA president said.

“We think the minimum wage will be implemented certainly within the third or fourth quarter of this year.” Mr Halkitis did not respond directly to Mr Sands’ gratuity concerns but affirmed that the minimum wage increase will likely take effect before year-end 2022. Agreeing that a ‘livable wage’ will take much longer to be agreed upon and implemented, he indicated that the Government would be amenable to the hotel industry’s concerns over the timing.

“The minimum wage, we expect that that will be done before the end of the year,” Mr Halkitis disclosed. “The whole issue of a livable wage is a much more long-term process. I will take back the position by Mr Fountain that you’d prefer it to be done at a time when everybody is open.

“The Prime Minister did indicate he wanted that [minimum wage increase] to happen this calendar year. Those discussions are largely complete, and you should see that right after the summer. Ensuring everybody is open, I don’t think that’s a difficult ask at all.”