New version of Fair Wage Act underway

A new comprehensive legislation stipulating fair compensation for resident workers in the Commonwealth is now awaiting action by the Senate after the House of Representatives passed it swiftly in a move they hope would finally enforce the long-overdue regulations.

Sponsored by House Speaker Diego T. Benavente and Rep. Manuel A. Tenorio, House Bill 11-441 is a detailed version of two earlier laws that had drawn controversy over some vague provisions as well as the absence of implementing guidelines.

The proposal, however, will repeal these previous laws requiring employers to extend the same benefits granted to nonresident workers to their local employees, who are receiving salary less than the prevailing federal minimum wage.

According to lawmakers, both Public Law 9-71 or the Resident Workers Fair Compensation Act and PL 11-74, which is an amendment to the former, have failed to provide these benefits due to the absence of regulations.

But HB 11-441 will seek to correct these deficiencies by incorporating the comprehensive set of guidelines intended to assist the private sector in implementing the law.

Alien workers’ benefits covered by the proposal include subsidized or free food and housing, transportation and medical insurance. Exempted are the repatriation costs as well as expenses incurred by employers in hiring these nonresidents.

Local workers qualified to receive the benefits or its cash equivalent are those receiving hourly wage of less than $6.50 and those whose positions are also held by nonresident employees.

They will have the option whether to receive the benefits in kind or its monetary value. If the latter is chosen, the cash amount will be added on top of their base salary, according to the proposed law.

To ensure compliance, the measure will provide penalty of up to $5,000 per violation against employers for failure to pay a resident worker the equivalent compensation.

The Department of Labor and Immigration, which has authority to oversee these provisions, will also be tasked to promulgate additional regulations to further enforce the proposed law.

Before the fair compensation is applied, the government will allow a grace period of 60 days from the time the measure is signed into law by the governor in order for companies to calculate the cash equivalents of the benefits.

Approved by Gov. Pedro P. Tenorio last March, PL 11-74 was supposed to be implemented last May 15, but the government decided to extend review on the initial rules and regulations drafted by the administration following objections from the business community.

HB 11-441 was passed by the House last month and is now under review by the Senate.