For some workers, wages are still at $3.05 an hour

Hikes in the local minimum wage have put a strain on scores of businesses in the Commonwealth, yet labor activists report some are skirting the recent increases by secretly paying workers less than the law requires.

“We wish this wasn’t happening but we know for a fact that it is,” said Irene Tantiado, president of the Coalition of United Workers, a local labor group.

Informants have reported that at least three restaurants, a major construction company and a private security company on Saipan are paying workers less than the current minimum wage, she said, adding that it is likely many more violators of the law remain hidden.

Reports show that one popular Chinese restaurant on the island, for example, is still paying workers the $3.05 hourly wage that was standard in the Commonwealth until two years ago, she noted.

The minimum wage rose to $3.55 cents last year and again to $4.05 in May. Coupled with spikes in utility rates, the wage jumps have prompted a host of businesses to increase prices or cut expenses.

The drive to keep costs down has apparently spurred some dishonest employers to ignore the wage hike, she said, threatening workers—often foreign laborers—with termination if they reveal the violation and lying to regulators about what they are paying them.

The reluctance of many workers to report this abuse has proven one of the major obstacles in cracking down on it, according to Labor’s deputy secretary Cinta Kaipat, who urged more workers to step forward.

“We welcome people to come and give us a chance to deal with this situation, she said.

The CNMI Department of Labor has an active enforcement effort to ensure local businesses are paying workers properly, according to Alfred Pangelinan, Labor’s director of employment services. The effort includes investigations of businesses’ financial documents and close scrutiny of their labor practices, he said.

Pangelinan added that some businesses are exempt from the wage increase if they earn less than $500,000 each year. However, many restaurant workers may not be covered under that exemption, he said, if their work involves charging customer credit cards because the law has a provision requiring the increase for any worker engaged in interstate commerce.

Labor was unable to provide data on the number of enforcement cases its staff has encountered involving businesses that have failed to pay the new wage rates.

Exposing any business that is ignoring the wage increases could depend on workers’ willingness to blow the whistle, he said.

“As always, we encourage workers, if they’re not earning $4.05 and believe they’re suppose to be, to come forward,” he said. “We want them to come in and report it to our office.”