Jamaican employers and trade unions are split over whether to move the country’s monthly paid workers onto fortnightly pay, a change that would lift nobody’s salary but would halve the wait between payday for cash-strapped households.
“Where operationally feasible, offering employees the option of weekly or fortnightly salary payments could definitely improve one’s household cash flow, maybe even reduce reliance on workers borrowing between pay periods to make ends meet,” said President of the Bustamante Industrial Trade Union (BITU), Senator Kavan Gayle, in a Financial Gleaner interview.
Countless workers will spend this week on credit, borrowing from friends and family, or avoid bills until payday – the stretch Jamaicans call ‘Ben Johnson Day’.
Employers and unions largely agree on the cause. Prices measured by the Statistical Institute of Jamaica have climbed about 45 per cent since 2020, while pay has not kept pace. The contrast with the previous five years is sharp. Inflation over the five years to 2019 totalled around 18 per cent.
The national minimum wage rose to $17,000 a week on July 1, from $16,000, and has more than doubled since 2020, when it stood at $7,000. Workers above the minimum have no such floor.
Gayle wants any change negotiated – not imposed.
“Any such change, however, should be implemented through consultation with employees and their trade unions, where applicable, to ensure it meets the needs of both workers and employers,” he cautioned.
WHO GETS PAID
Pay frequency tracks the nature of the work, Gayle said. Hourly paid employees in manufacturing, construction, hospitality, security, retail and business process outsourcing commonly collect weekly or fortnightly. Salaried staff in the public sector, banking, insurance and professional services – whom the BITU also represents – generally collect monthly.
“Historically, monthly salaries have been associated with administrative convenience, while weekly or fortnightly payments better align with the earnings patterns of hourly-paid workers, whose incomes fluctuate based on hours worked,” Gayle explained.
The Ministry of Finance does not publish a breakdown of how many of Jamaica’s 1.47 million labour force collect pay monthly, fortnightly, weekly or daily. The vast majority of the 118,000-plus public-sector workers collect monthly. Most of the 40,000 outsourcing workers collect fortnightly.
EMPLOYERS
Founding Chairman and CEO of itel, Yoni Epstein said most private- sector workers already collect pay twice a month, and that workers themselves settled the question for him.
“Typically, all employees, minus senior managers, are paid bi-monthly. In the past I was a supporter of weekly pay, but in my experience across multiple businesses the preference is bi-monthly, as it helps with their cash flow,” Epstein said.
President of the Jamaica Employers’ Federation Wayne Chen argues that the market has already settled much of the debate, saying most workers collect fortnightly rather than monthly.
“Most small and medium-sized businesses, where the majority of Jamaica’s workers are employed, are already on bi-weekly [pay],” Chen told the Financial Gleaner when contacted.
THE CASE AGAINST
Workers need greater discipline, said Oneil Grant, past president of the Jamaica Civil Service Association and an industrial relations consultant. Bills do not arrive on a fortnightly cycle, he warned, so urgent demands will swallow the first cheque and leave the bills waiting.
“People leave (their bills) alone until they get paid. When they are fortnightly paid, the more money you come across, the more problems you see. You have a little cash in your pocket, you spend. It’s psychological, and people may not have the discipline to do so,” Grant opined.
Employers carry their own burden. Grant said a fortnightly cycle doubles the payroll runs and the statutory filings that go with them.
“They have to ensure that they make a pay bill every two weeks, they have to track the statutory deductions and make sure that they collate them properly and to file them, and so on. So it poses a bit of a difficulty for them, the employers, administratively,” Grant said.
WORKERS BENEFIT
Grant draws the line by expense profile. Lower-paid workers, who carry lighter fixed bills and depend more on cash in hand, stand to gain. Higher earners, who face larger bills falling due at set points in the month, may find the shorter cycle harder to manage.
“The lower end tends to benefit more because their expense profile is lower and they are more cash-dependent than the persons who are higher paid,” Grant surmised.
With much of the private sector already paying fortnightly and the administrative burden falling mainly on employers, Gayle’s call for dialogue may offer the clearest route.
neville.graham@gleanerjm.com
