The following statement was released by the Minister of the Economy and Labour, Jason Hayward…

I would like to take this opportunity to bring clarity to the paid leave entitlement for personal service employees who receive commission and employees who receive gratuities and services charges in accordance with the Employment (Minimum Hourly Wage) Order 2023.

The Employment (Minimum Hourly Wage) Order 2023 came into operation on June 1, 2023, establishing the first minimum hourly wage rate for Bermuda of $16.40. Pursuant to this Order, the employers of personal service employees and employees to which gratuities

and services charges form a part of their wages, are permitted to set a basic wage for their staff. This is usually less than the minimum hourly wage rate but when commission, gratuities and services charges received are applied to this basic wage, it guarantees a minimum hourly wage rate of $16.40.

Contrary to the Employment Act 2000 some employers are applying the basic wage set in accordance with the Order to the statutory leave entitlement of these employees. The Employment Act 2000 clearly sets out how to calculate the weekly wage of an employee whose wages vary from week to week which is to take the average wages earned by him over the previous twelve weeks or, in the case of an employee who has worked for less than twelve weeks, the average wages earned by him over the time that he has worked.

For example, Employee A has been employed for two years at a basic wage rate of $12.00/hour, works 40 hours per week and is paid weekly. With the addition of gratuities and service charges, Employee A’s weekly wage varies from $656 ($16.40/hour) to $820 ($20.50/hour).

To ascertain Employee A’s leave entitlement, the employer should take the average of the previous twelve weeks worked.

Additionally, there are some employers who have incorporated leave entitlement into the overall remuneration of their employees, which is also contrary to the Employment Act 2000, as employees should receive paid leave when the statutory leave is taken. For example, an employee cannot agree to a higher rate of commission in lieu of paid sick and/or vacation leave.

Employers have an obligation to pay employees for their leave when it is taken.

The Department of Labour is available to employers, employees and their respective representatives should they have any questions. If you feel that you are being compensated incorrectly, please contact the Department of Labour at departmentoflabour@gov.bm or on 2977716 or visit their offices at 23 Parliament Street, Hamilton HM12 from Monday to Friday between 8:4am and 5pm to speak with a Labour Relations Officer.