August 17, 2011 Pohnpei, FSM-Legislators in Pohnpei today passed amendments to Pohnpei Wage and Hour Law that if signed into law by the Governor would increase the minimum wage in Pohnpei from $1.35 per hour to $1.75.
The proposed amendments were submitted to the Pohnpei State Legislature by Senator Bellarmine Helgenberger on December 8 of 2010. They have been the subject of public hearings with the Committee on Finance since that time.
Helgenberger's initial amendments to the wage and hour law (19 PC 3-104) called for an increase to $2.00 per hour.
The Committee on Finance report on the bill said that representatives from the Department of Treasury and Administration conveyed their support for the initially proposed increase to $2.00 per hour. Members of the Private Sector said that was too much and would require them to increase their prices which would then negate the value of the bill. Business owners wanted to see a minimum wage increase of only 10% to nearly $1.50 per hour.
"Your Committee also sees that many educated and skilled Pohnpeian employees are leaving their employment in the private sector for higher paid job(s) in the government or abroad. Your Committee trusts that in order to at least retain and attract educated and skilled employment in the private sector and to better adjust the cost of living, the minimum wage needs to be adjusted to meet the needs of the current private sector workforce. In order to strike a balance between the amount of wage increase as proposed in the bill and the ten percent increase recommended by the private sector representatives, your Committee recommends increasing the minimum wage to $1.75 instead of $2.00," the committee report said.
According to the Pohnpei Legislature's press officer, Salter Lohn, one Senator introduced a floor amendment to restore the initially proposed increase to $2.00 per hour but that floor amendment was not passed.
Salter said that the vote on second reading of the bill passed the Legislature with only one dissenting vote.
If Pohnpei's Governor Ehsa signs the bill into law the implementation of the increase in minimum wage would go into effect on January 1, 2012. According to the wording of the bill the effective date for the increase would first require a public information program on the new minimum wage requirements to be conducted by the Chief of the Division of Personnel, Labor and Manpower Development.
The bill also adds a requirement that "the Chief" conduct "necessary and appropriate studies of the minimum wage," every three years and at every additional time when he considers an amendment to the existing rate to be appropriate. The Chief would submit recommendations to the Governor for review, approval and further transmittal to the Legislature for its consideration.
"In developing recommended amendments to the minimum wage rate, the Chief shall give consideration to:
1) The minimum standard of living which is compatible with decency and health;
2) The general economic conditions of the state;
3) The compensation practices and conditions of appropriate labor markets;
4) The conditions of employment in Pohnpei; and
5) Such other matters as the Chief may deem appropriate."