HAGÅTÑA (The Guam Daily Post) — The U.S. Department of Labor is proposing to increase the federal minimum wage for exempt workers in the territories, a first for Guam since 2004.
The proposal put forth by the department updates and revises the regulations under the Fair Labor Standards Act, which, according to the Federal Register, would implement “the exemptions from minimum wage and overtime pay requirements for executive, administrative, professional, outside sales and computer employees.”
For Guam, the proposed change to the federal minimum wage would set the standard salary level of weekly nonhourly earnings to the 35th percentile in the lowest wage U.S. census region.
Since 2004, the salary level for Guam was set to $455 per week. The proposed rule change means exempt salaried workers on Guam would take home $1,059 per week, which equates to $55,068 annually.
Gary Hiles, chief economist with the Bureau of Labor Statistics, told The Guam Daily Post on Saturday that “if the employees make more than that, for the most part, they would not be affected. If employees are making less than the current threshold, they are not affected because they are already required to pay overtime. So those that are in between the old and the new threshold are the ones that the requirement would kick in.”
Currently, the Fair Labor Standards Act “requires covered employers to pay employees a minimum wage and, for employees who work more than 40 hours in a week, overtime premium pay of at least 1.5 times the employee’s regular rate of pay,” but white-collar workers who meet three duties tests are exempt.
“The Department’s proposed standard salary level will, in combination with the standard duties test, better define and delimit which employees are employed in a bona fide (Employee Assistance Program) capacity. By setting a salary level above what the methodology used in 2004 and 2019 would produce using current data, the proposal would ensure that, consistent with the Department’s historical approach to the exemption, fewer lower-paid, white-collar employees who perform significant amounts of nonexempt work are included in the exemption,” the proposed rules said.
According to the proposal, the change would make determining who is employed in a “bona fide EAP capacity” more effective as it also sets the salary level below the methodology used in 2016 and allows employers to “continue to use the exemption for many lower-paid, white-collar employees who were made exempt under the 2004 standard duties test.”
According to the supplemental analysis by the Federal Register, Guam has a total of 51,340 workers – of those, 2,407, or 4.7% of all workers on Guam, would be affected.
The United States Department of Labor is seen in Washington, D.C., on Aug. 30, 2020. An increase to the federal minimum wage for exempt workers in the territories, a first for Guam since 2004, has been proposed.
