The current minimum wage law does not allow most nonresident workers to receive minimum wage, by redefining who is eligible to receive the minimum wage and that there will be a greater economic advantage to the employees private sector businesses and the Republic.
The bill is also aimed at maximizing the potential of local workers.“With the increase In the nonresident workers who may receive minimum wage, there will a greater demand to hire Palauans, due to the increased cost to employ nonresident workers,” Senate Bill 7-77, SD3.The bill also changes the gross annual income for businesses which are exempted from paying the minimum wage to $50,000.Exempting the minimum wage for fisherman, farmers, and domestic servants or helpers will allow the continued utilization of the employees by locals.The bill also calls for an increase in penalties and an addition of civil remedies an employee may seek for an employer’s violation of this section to make hiring of Palauans more attractive.The bill also said that after every five years of consecutive employment by an employee, the minium wage for the employee shall increase by 20 cents.The bill said the increase will apply to all employees and will be applied retroactively for current employees.It also said that the obligations of an employer that is required to pay minimum wage are the employee’s transportation to and from Palau.The employer however will be allowed to deduct up to 25 percent of the employee’s salary per pay period to pay for the return flight. The bill said that id the employer is at fault for terminating the contract, the employer shall be required to pay for these expenses until the employee returns to his or her place of origin.The new bill also stated that the employer will no longer be responsible for housing or food.It added that if the employee does not receive minimum wage according to Section 2(a), the employer will be responsible for these expenses. An employer who violates the requirements of this section shall be subject to a civil penalty of $500 and a penalty of the equivalent of all unpaid taxes and social security contributions plus interest on the wages not paid to the employee, for each violation.The employee can also have a civil cause of action in any court of appropriate jurisdiction, either through the Office of Attorney General or Special Prosecutor at their discretion, or through the aggrieved employee’s choice of private representation or self-representation, for damages and such other remedies as may be appropriate. If the Attorney General or Special Prosecutor does not take action within 30 days, the aggrieved employee may initiate his or her own court action. In addition to such remedies, an aggrieved employee who does not receive minimum wage shall be entitled to receive punitive damages from the employer in an amount not to exceed $1,500.Senate President Surangel Whipps Sr. introduced the bill in 2005 and said it has been deferred eight times since then.He said five voted in favor of the bill.
