SCC restates minimum wage hike stance

The Saipan Chamber of Commerce says it supports a minimum wage increase but it should include all the benefits given to nonresident workers.

“The Chamber believes that benefits are a real cost to the employer and a gain to the employee. Any calculation of wage must include benefits that are given to nonresident workers; when included, the value of these benefits brings the actual minimum compensation higher than $3.05 per hour,” said Chamber president Charles V. Cepeda in a statement yesterday.

At the same time, he said that the CNMI, “by default,” has a tiered wage system.

He said one tier is that of nonresident workers in the farming and fishing sector, as well as housekeepers. These workers are usually paid $300 a month that, if quantified, is only paid $1.8 per hour at 40 hours a week. Most housekeepers, however, are stay-in workers who are expected to work day and night, as long as their services is needed by the employing family. In some cases, housekeepers are also asked to render service to the close relatives of the original employer.

Cepeda agreed that these workers are paid “extremely low.”

“People in these occupations are paid an extremely low monthly wage in relation to the hours they are allowed to work under the Nonresident Act,” he said.

Another tier would be the employees who are paid $3.05 per hour, with deductions for their room and board.

“It is time to formally recognize these tiers and use them for the economic growth of our community,” said Cepeda.

The Chamber official reiterated his call on the Legislature to “validate the legality of the existing Wage Review Board Law” and the governor to appoint members to the Wage Review Board by the end of the year, with a report due back from that board no later than June 30, 2007.

Cepeda said this board will need up-to-date and accurate economic indicators and statistics to apply a proper formula to CNMI wages.

He said the board must have representatives from both the CNMI government and private sector industry leaders to carefully analyze these statistics and determine wages.

The Chamber, which consists of major employers on the island, said that if the intent of lawmakers is to ensure parity of compensation for resident and nonresidents, they should ensure that the “resident fair compensation law” is strictly enforced.

“A formal tiered wage system is the best solution to the minimum wage system in the CNMI. The Resident Fair Compensation Law and the law requiring minimum 20 percent local hire must be strictly enforced; without this enforcement, no number of laws will ensure that jobs are reserved for the benefit of residents,” said the Chamber.

It said that the Hay wage study, conducted by the Hay Group during Gov. Froilan Tenorio’s administration, clearly defined a weighted average, per hour, per employee, employed in the private sector.

“We are unsure why we continue to debate the issue of a tiered wage system in the CNMI. The CNMI already utilizes its own version of a tiered wage and certain exemptions for industries. Certain industries are allowed exemptions and lower wages under current statutes. We have all accepted this practice and there must be good underlying reasons the lawmakers have justified to maintain these rates. The SCC is only asking that they consider the state of our economy and also allow other industries to justify a reasonable wage scale, remembering our requirement to provide benefits under the law,” said Cepeda.

This developed as the House of Representatives has pending bills seeking to increase the minimum wage in the CNMI.

In the U.S., the Democrat-dominated Congress is also expected to push and possibly pass a bill raising the CNMI minimum wage to the federal level of $5.15 per hour.