HAGÅTÑA (The Guam Daily Post) — The proposal by the U.S. Department of Labor to raise the federal minimum threshold for salaried workers in states and certain territories caught local labor authorities by surprise, according to Guam Department of Labor Director David Dell’Isola.
“I didn’t know anything about it. It literally surprised us all,” he told The Guam Daily Post Thursday, ahead of addressing attendees at the 3rd General Membership Meeting of the Guam Hotel and Restaurant Association, in which the increase was a topic of discussion.
The minimum threshold refers to the payment level at which certain employees are considered exempt from minimum wage and overtime pay requirements within the Fair Labor Standards Act (FLSA).
USDOL is proposing to raise the threshold up to $1,059 per week, which is more than $55,000 in annual salary.
The current threshold in the 50 states and the District of Columbia is $684 per week, or about $35,500 in annual salary. But this level doesn’t apply to Guam.
That’s because an exception was made for Guam, Puerto Rico, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands, which maintained the 2004 threshold of $455 pay per week.
This was the first time that the U.S. labor department set a special salary level for employees in territories subject to the federal minimum wage, according to USDOL’s proposed rule change, which is looking to do away with any exception for Guam or similarly situated territory.
“In accordance with (USDOL’s) traditional practice, and in the interest of applying the FLSA uniformly to areas subject to the federal minimum wage, the department is proposing to apply the standard salary level to employees in all territories that are subject to the federal minimum wage and to maintain a special salary level only for employees in American Samoa, because that territory remains subject to special minimum wage rates,” the proposed rule states.
That’s causing concern for local businesses organizations on island. Moreover, the comment period on the proposed rule change is quickly coming to a close, with comments to be submitted by Nov. 7.
Approaching the issue
GHRA President Mary Rhodes said local organizations are hoping to extend that comment period. GHRA has been working with the Employers Council, the Guam Chapter of the Society for Human Resources Management and the Guam Chamber of Commerce on this issue, she added.
“Together we have really petitioned in the past for extensions on this … and then we actually fought for the exemption (to the current threshold). And so we were given that years ago. And so now that this is coming up again with the Biden administration, we know it’s a proposed removal of the exemption so that Guam would have to come at par with all the other states,” Rhodes told the Post Thursday.
“It is our intention to request for an extension on the comment period. And then also, to look at alternative solutions rather than what is being proposed by the Biden administration so it’s a lot more fair if there are going to be any changes,” Rhodes added.
Guam and other territories were able to justify an exception to the current FLSA threshold because of market differences compared to the rest of the U.S., according to Rhodes. It would be detrimental to apply the proposed threshold of $1,059 per week to Guam and similarly small markets, she added.
Dell’Isola and GDOL were invited to Thursday’s GHRA meeting to speak on what kind of information was provided to USDOL regarding Guam’s labor market. But according to Dell’Isola, GDOL didn’t provide anything as they didn’t know about the proposed change.
“Literally, we didn’t know anything about this,” Dell’Isola told attendees at the GHRA meeting. “It’s not like USDOL has a tendency to tell us what they’re doing. I have a history of them not telling us what they’re doing.”
Dell’Isola said he supported extending the comment period. He also noted that USDOL reviewed market data in the southern states, which tend to be the lowest salary states in the country.
“But where that matches with Guam, we don’t know,” Dell’Isola told attendees. “We’ll try to see if there’s parity or not.”
Outside of his remarks to GHRA members, Dell’Isola told the Post that GDOL needs to carve out time to study the proposed change, and is trying to get accurate Guam data for USDOL.
“We want to try to possibly look into how (USDOL) got their data, which we kind of got an understanding on already, and if we can dig into what we have to come up with a comparison to what they came up with,” Dell’Isola said.
“Asking for more time to look at the real data makes sense. What comes out of that is another story,” he added.
Guest speaker David Dell’Isola, Guam Department of Labor director, delivers a speech during the Guam Hotel and Restaurant Association’s third general membership meeting at The Westin Resort Guam in Tumon on Thursday, Oct. 26, 2023.
GHRA President Mary P. Rhodes delivers remarks during the Guam Hotel and Restaurant Association’s third general membership meeting at The Westin Resort Guam in Tumon on Thursday, Oct. 26, 2023.
