BB directives on federal minimum wage for govt, CIP contracts repealed

Workers hired for new government services and capital improvement projects will no longer receive the $6.25 minimum hourly wage, with Gov. Benigno R. Fitial repealing two directives by the previous administration.

Fitial issued Directive 247 on Friday rescinding Directives 228 and 241, which required that workers on government contracts and capital improvement projects be paid higher than the local minimum wage.

“This directive repeals Directives 228 and 241. The rate of wages for employees hired by employers for new government services and CIP contracts hereby reverts back to CNMI minimum wage rates,” read a portion of Directive 247.

According to Fitial, the two directives issued by his predecessor have failed to serve their purpose, which was to increase job opportunities for local workers.

Rather, he said, the directives have only increased government expenses for services and CIP contracts, as contractors are required to raise their fees in order to pay employees the required wage rate.

“While Directives 228 and 241 ensured higher wages for employees who are employed by contractors who have been awarded government service and CIP contracts, it has not increased job opportunities, nor has it enhanced the living standards for the people of the CNMI,” Fitial said.

The governor maintained that Directives 228 and 241 would not work in the Commonwealth’s present economic status.

“Carrying out the intent of Directives 228 and 241 first requires ensuring economic development, among other things. Ensuring economic development requires making the CNMI a business friendly locale with growth potential for such businesses. It also requires rebuilding the current economic state of the CNMI. Once the economic state of the CNMI begins to rebuild, more job opportunities will surface, which in turn will provide for better living standards for the people of the CNMI,” Fitial explained.

“Since the trend of the employers in the CNMI in the recent years has been to downsize their workforce, directives 228 and 241 provided higher pay for only a limited number of people, while continuing to leave many unemployed,” he added.

Fitial also directed acting Finance Secretary Eloy Inos and other government agency heads involved in existing service contracts or CIP contracts to meet with affected contractors to ensure compliance with the new directive.

In May 2003, then Gov. Juan N. Babauta issued Directive 228 requiring a $5.75 hourly wage for those working on government and capital improvement projects.

Babauta later amended this policy by issuing Directive 241, which raised the wage rate for such workers to $6.25 per hour.