Minimum wage hike takes effect Monday

Effective May 26, 2008, the minimum wage of $3.55 will increase by 50 cents, bringing the new minimum wage to $4.05 an hour and time and one-half or $6.08 for every hour over 40.

The wage increase will apply to most house workers, farmers and subsistence farmers.

1) House workers and farmers who do not live with employer must also be paid time and one-half ($6.08) for every hour worked over 40 hours.

2) Live-in house workers and farmers will be exempt from overtime requirements. That means for hours worked in excess of 40 in a workweek, they need only be paid $4.05 per hour. Live-in house-workers and farmers still must be paid for every hour worked.

3) Employers of live-in house-workers and farmers may deduct a reasonable amount for room and board of up to $100 for housing and $100 for food per month.

[B]Employees not covered by the minimum wage provision of the FLSA[/B]

Some employees in the CNMI will not be covered by the minimum wage provisions of the FLSA and may continue to be paid at the rate set by the CNMI Minimum Wage and Hour Act. Employees will not be covered if:

1) Their employer is small (doing annual gross volume of sales or business done of less than $500,000) AND

2) The individual employee does not engage in commerce in the course of his or her work (that means, he or she does not make phone calls to the mainland, do janitorial work in buildings where goods are produced for shipment out of the CNMI, handle records of interstate transactions, swipe credit cards, do business over the Internet).

For employers who believe they are not covered because their enterprise does not do at least $500,000 in gross sales, Labor Processing Section or Division of Employment Services will be requiring copies of the BGRTs for the previous year for the enterprise and an affidavit that the individual employee does not engage in commerce.

[B]Employees exempt from the minimum wage provisions of the FLSA[/B]

Certain categories of employees are exempt from the minimum wage provisions of the FLSA. Below we highlight the exemptions that we have received inquiries about.

1) Employees engaged in fishing (fishermen). These employees are exempt from the minimum wage provisions of the FLSA and may continue to be paid the wage rate set by the CNMI Minimum Wage and Hour Act.

2) Farmers on small farms that grow produce or raise livestock for sale. A farmer will be exempt from the minimum wage provisions of the FLSA and may continue to be paid the wage rate set by the CNMI Minimum Wage and Hour Act if the farmer:

a. Works for an employer who grows produce or raises live stocks for sale; AND

b. The employer employs fewer than six farmers in every quarter of the previous year.

For employers claiming these exemptions, Labor Processing Section and the Division of Employment Services will be requiring an affidavit verifying that the above requirements are met, and a copy of a business license and BGRTs.

3) Domestic workers who provide companionship services to disabled individuals. A house worker will qualify for this exemption only if his or her primary job is to provide companionship services for an individual who is unable to care for his or herself because he or she is elderly or disabled. To qualify for this exemption, at least 80% of the employee’s time must be spent caring for the disabled or elderly individual. For employers claiming this exemption, Labor Processing Section and Division of Employment Services will be requiring an affidavit verifying that the individual is disabled, and that the house worker will be spending at least 80% of her time caring for that individual. In some cases may also require a certification from a doctor.

[I]Department of Labor disclaimer: This press release is designed to provide employers and employees with an overview of the FLSA and how it interplays with the Commonwealth Employment Act of 2007. Ultimately, the responsibility to comply with this and all labor laws falls on the employer and employee. Employers and employees may seek additional information about the FLSA on the U.S. Department of Labor website at www.dol.gov or contact the U.S. DOL Office at 233-0740, or Ms. Alice Concepcion at the Division of Employment Services of the CNMI Department of Labor at 236-0900.
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