‘Tinian favors gradual wage increase’

Initial consultations showed that Tinian favors the gradual implementation of a wage increase in the CNMI, according to House Committee on Ways and Means chair Rep. Norman S. Palacios.

The lawmaker said this was based on the public hearing that his committee had conducted Tuesday on that island on House Bill 14-30, which aims to raise the CNMI minimum wage to $5 per hour from the current $3.05 per hour.

“Most of them favor the gradual increase rather than immediate implementation,” said Palacios.

Interestingly, he said that small businesses on Tinian support the wage hike more than the major business on Tinian, Tinian Dynasty Hotel and Casino.

“The reason is that small businesses would be able to save some money since the bill aims to remove certain liabilities from the employers such as probably full insurance coverage or housing,” said Palacios.

The bigger companies, particularly Dynasty, expressed worries that the bill would result in more expenses.

Palacios said that TDHC had said that it spends some $50,000 to $60,000 a year for the medical expenses of its employees. This spending, he said, takes into account the hotel’s special arrangement with health providers.

“It also indicates that the employees are healthy and are not getting sick,” said Palacios.

Under the bill, the hotel’s medical expenditure would become seven times higher than its current spending because it seeks to mandate a 50-50 cost-sharing between the employer and employees.

Further, the current law does not require employers to provide medical coverage for local residents.

Last night’s scheduled public hearing on Saipan on the same bill was canceled “due to bad weather.” Palacios said the hearing will be held Tuesday next week instead. The Rota hearing will be on Friday, July 29.

The committee has asked officials and representatives of at least 27 agencies to submit written testimonies on the bill for the July 26 hearing.

Among them are department secretaries led by Finance Secretary Fermin Atalig and representatives from various business groups—Saipan Chamber of Commerce, Hotel Association of NMI, CNMI Banking Association, Rotary Club, and Society of Human Resource Management.

Palacios said all municipal mayors and officials from the Governor’s Office, including the Attorney General’s Office, will also be given a chance to speak on the proposed measure.

Authored by Rep. Heinz S. Hofschneider, H.B. 14-30 aims to increase the minimum wage in the CNMI from $3.05 per hour to $5 per hour, except those employed in the garment industry as sewers and cutters.

The bill also aims to relieve employers of certain statutory requirements. For instance, the bill offers to remove the mandate on employers to assume liability and responsibility for all medical costs of nonresident workers. It said that employers will be better off offering health insurance benefits where they would be responsible for paying at least 50 percent of the premium.

The bill also aims to restrict the Labor Director’s discretion to impose other terms and conditions to a nonresident worker’s contract relating to meals, lodging, and work site transportation.