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Department of Labor and Career Technical Education Funding Challenges Make Way to Senate Floor

Gary Molloy gives Department of Labor Update (Photo courtesy of the Legislature of the VI)

Gary Molloy, commissioner of the Department of Labor testified during Wednesday’s Committee on Education and Workforce Development hearing saying, “As of April 2023, the unemployment rate in the US Virgin Islands was 3.1 percent, which is considered to be full employment.” 

Molly testified that the unemployment rate for St. Croix was 3.7 percent and in St. Thomas-St. John was 2.7 percent, bringing the territory’s unemployment average to 1,400 for the first quarter of 2023. The total employment in the Virgin Islands came out to 39,834. 

The U.S. Department of Labor has mandated the Unemployment Insurance Division to roll out a Payroll Variation employer tax methodology to bring the V.I. in compliance with federal laws and establish an experience rating to equitably distribute insured risk among the Virgin Islands Employers. The tax change will take effect on Jan. 1, 2024, according to Molloy. 

With the tax variation on the table and the Senate’s budget season about to begin Molloy reported that “as of April the Virgin Islands Trust Fund has approximately $17,547,982.07 available for payment of future claims. The balance on the debt owed on the Trust Fund Loan is currently $89,678,771.878. The average initial filing of claims for Fiscal Year 2022 was 458, which was a decline from Fiscal Year 2021 claims which was 1,570.”

Sen. Donna Frett-Gregory questioned Molloy about the deficit, who stated that the department had to borrow a few times. However, the cost has decreased as of recently.

With obvious funding conflict, the commissioner suggested lawmakers adjust the system by amending Act 8209 to address the implementation date of the payroll variation from Jan. 1, 2021, to Jan. 1, 2024, as well as recommending changing the maximum number of weeks for unemployment insurance benefits to 13 weeks instead of 26 weeks. 

In its efforts to combat the unemployment rate, the Department has held numerous job fairs. In 2022 there were a total of 13 hiring events and seven career fairs within the territory. Recently on May 3 in St. Thomas and May 10 in St. Croix, a total of 276 job seekers with 53 employees participated in career fairs. From the department’s record of the online job hiring portal, Virgin Islands Electronic Workforce System, 103 job seekers were hired. 

Joann Murphy, chair of the Virgin Islands Career and Technical Educational Board, said, “The lack of resources within CTE has led to a situation where programs are not properly funded. Without these programs, we risk exacerbating the high rates of unemployment in the community.”

Murphy explained the state of the matter that “over the past two decades, half of CTE programs of study have been lost and is at risk to lose most of its remaining programs within the next five years.”

Without the proper funding to aid in the efforts, Murphy went on to express her concerns for the staff, “the instructors in the St. Croix District have not been paid since February,” she said.

Sens. Marise C. James, Donna A. Frett Gregory, Diane T. Capehart, Dwayne M. DeGraff, Kenneth L. Gittens, Javan E. James Sr., Franklin  D. Johnson, and Carla J. Joseph were in attendance at Wednesday’s hearing.

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