Amendment to Fair Wage Act awaits House nod
Considered as part of the administration’s reform measures, a comprehensive legislation providing fair wage to resident workers on the island stepped closer to becoming a law as the House of Representatives is set to vote on a Senate amendment.
Senators approved early this month a proposal that will scrap a provision giving option to locals who have pre-existing health insurance to ask for its cash equivalent, citing such a move could have adverse tax consequences for both employers and resident workers.
Offered by Senate Floor Leader Pete P. Reyes, the amendment is also intended to avoid constitutional challenge in the future as alien workers do not have the option of taking cash instead of medical coverage.
“By extending a benefit to resident workers not available to nonresident workers, the provision would violate equal protection of the laws,” he said.
Reyes expressed concern that the option could lead to the government shouldering the medical expenses of a resident worker who decides to abandon his prepaid heath insurance, but still receives cash compensation from his employer.
“The original language (of the provision) would give money to resident workers while still leaving the Commonwealth vulnerable to what the medical coverage provisions of the Nonresident Workers Act seek to avoid — the government left holding the bag for medical expenses,” the senator pointed out.
House members are expected to approve the amendment in a session to be scheduled within the next few days to speed up implementation of 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 seeks repeal of these 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 rate.
Since these measures have failed to provide these benefits, lawmakers agreed to incorporate an extensive set of guidelines in an effort to assist the private sector in its implementation.
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 that will be added on top of their base salary, according to the proposed law.
To ensure compliance, the bill will impose penalty of up to $5,000 per violation against employers who fail to pay a resident worker the equivalent wage rate.
Island leaders have pitched the forthcoming law during the recent congressional hearings in Washington D.C. as one of the reforms being undertaken by the Tenorio administration in a bid to make the private sector more attractive to locals.
