US minimum wage for CIP workers nixed

Gov. Benigno R. Fitial rejected for the second time in two years a proposal to pay employees working on capital improvement projects at least the U.S. minimum wage, saying the bill is “unnecessary” since federal law provisions on wages now apply to the CNMI.

The federal minimum wage is $7.25 an hour; the CNMI’s current minimum wage is $5.05 an hour.

“A bill similar to this was introduced in the 16th Legislature, Senate Bill 16-23. I disapproved that measure and disapprove this as well for the same reasons,” Fitial said in his June 27 veto message to the Legislature.

The governor said provisions under the Fair Labor Standards Act, such as the general provisions of the Service Contract Act and the Davis Bacon Related Act, apply to the CNMI.

Senate President Paul Manglona (Ind-Rota), author of the vetoed Senate Bill 17-56, Senate Draft 1, said yesterday that raising the salary of employees working on CIPs to the federal minimum wage level was done before and it could be done again.

Manglona’s previous bill of the same nature also got the governor’s veto in November 2009.

“With all due respect to the governor, this was proven to work in the past, during the previous administration. It might seem like it’s hard to implement but it’s done in the past,” Manglona told Saipan Tribune.

Former governor Juan N. Babauta’s Directive 228 on May 20, 2003, raised the salary of construction workers involved in CIPs to the federal minimum wage level.

Fitial cited three other reasons for disapproving Manglona’s bill late Monday afternoon.

He said a section of the bill broadens the application of the “prevailing U.S. federal minimum wage as the wage required by law to be paid to employees working within any state of the United States” instead of that of the prevailing U.S. federal minimum wage in the CNMI.”

A federal law requires minimum wage in the CNMI to be increased by 50 cents every year until it reaches the federal level of $7.25 an hour.

Fitial said under the FLSA Section 6(a)(1), the prevailing minimum wage applies to all service contracts regardless of dollar amount and must apply safety and health standards and maintain certain records if service contracts are in excess of $2,500.

The governor also said Section 7306 of the bill creates additional work for Procurement and Supply and the heads of all departments, agencies and instrumentalities to comply with the reporting mandates—all without enough resources provided.

Manglona’s SB 17-56, SD1 sought to reduce unemployment among citizen and permanent resident workers. Eight other senators co-sponsored the bill.