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Senate Committee Approves Minimum Wage Increase

Aug. 19, 2005 — V.I. residents working at the minimum wage have reason to look forward to a 50-cent hourly raise at the beginning of next year.
The Senate Committee on Labor and Agriculture voted Friday to move forward to the Rules Committee a bill to increase the minimum wage. The bill originally proposed to make it a dollar-an-hour increase over the present $5.15 minimum wage, but an amendment by Sen. Terrence "Positive" Nelson, chairman of the committee, was tacked on the bill. The bill would make the raise incremental — 50 cents this coming January and 50 cents more in January 2007.
Sen. Juan Figueroa-Serville said, "It is rational and logical to look at how this will affect all parties involved." He said he was interested in helping the "little guy," but did not want this to become too much of a shock for small business owners.
The other three senators present – Craig Barshinger, Nelson and Ronald Russell – expressed similar sentiments.
The sponsor of the bill, Sen. Celestino White Sr., was not present. He apparently could not get to St. Croix in the morning because a bomb threat on Thursday afternoon at Seaborne Airlines had backed up passengers.
Nelson said it was his understanding that White supported the measure as passed.
Cecil Benjamin, commissioner of the Department of Labor, said at the meeting, "We support an increase in the minimum wage 100 percent."
Nelson quoted what Franklin D. Roosevelt said on the passage of the first minimum wage bill: "No business that depends on giving less than a living wage to its workers has a right to survive."
Another bill sponsored by White, concerning employees who receive tips as compensation, was held in committee after Benjamin and senators said that more study on its impact needed to be conducted.
Presently businesses whose gross receipts are less than $150,000 are exempt from the requirement to pay a minimum wage to tourist service and restaurant employees who receive tips as part of their compensation. White's bill would remove tipped restaurant employees from the exemption, thus requiring them to receive minimum wage.
The only other bill on the committee's agenda was sponsored by Senate President Lorraine Berry, at the request of the governor. This bill aimed to eliminate loopholes in how businesses' contributions to the Unemployment Insurance Program were determined. The contribution by a business to the fund is determined by the history of its employees using the fund. If a business has a history of repeated employee use of the fund, its contribution rate goes up.
However, businesses have circumvented the higher rate by purchasing a small business with a lower rate and the using that business' rate to calculate its rate of contribution.
Benjamin testified that this legislation was necessary to bring the Virgin Islands into compliance with federal law. He said, "If this legislation is not enacted in time to begin the next tax-rate year, the Virgin Islands' unemployment insurance administration grant may be in jeopardy."
Russell voiced concern that since the final determination on what rate a business would pay was at the discretion of the commissioner of the Department of Labor, that an undue burden might fall on some businesses.
He also questioned whether subcontractors, such as those who were hired at Hovensa, actually paid their fare share. These companies tend to lay off many workers, but since the subcontractor returns often as a new company, they receive the new company rate, which is much lower than a company that has a history of laying people off.
The bill was moved onto the Rules Committee. Russell said he would revisit some of these issues at a later date.
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