Business sector sounds off on minimum wage legislation

Guam Chamber of Commerce President Catherine Castro said the plan they independently put together recommended phases of gradually re-opening businesses like retail shops and restaurants based on meeting certain guidelines.

In anticipation of Friday’s public hearing to increase the minimum wage, PNC was able to interview Guam Chamber of Commerce President Catherine Castro.

Castro said the Guam Chamber of Commerce’s stance on raising the minimum wage remains the same — they still do not support it fully.

“Overall, the Chamber of Commerce’s position remains the same — that the minimum wage is not a living wage, it is a starting wage,” Castro said.

She added that despite the Chamber’s vocal opposition to the bill, they feel that lawmakers will still pass the bill regardless. Castro warned that an increase in the minimum wage may result in economic dislocation.

“It looks like the legislature will be pushing ahead anyway so we’re asking the legislature to do it in phases, if they would consider doing that. I think the actual legislation does talk about different phases,” Castro said.

Last month, Senator Joe S. San Agustin and nine co-sponsors introduced Bill 136-35, which aims to raise Guam’s hourly minimum wage in two 50-cent increments — from $8.25 to $8.75 by March 1, 2020, and ultimately to $9.25 by March 1, 2021.

In addition to the phases, Castro says the Guam Chamber of Commerce will propose establishing a tip credit.

“We’re also asking the legislature to start a tip credit that starts at $8.25 and then having any further increases be based off that $8.25, and then tips take care of the rest,” Castro said.

Currently, existing laws don’t allow a tip credit. In fact, Guam Department of Labor Director David Dell’Isola sent a reminder just last week that everyone in the service industry on this island is to be paid the minimum wage of $8.25 per hour, not inclusive of tips.

Castro says they will also ask lawmakers to start a youth wage, which under the Fair Labor Standards Act, allows employers to pay employees under 20 years of age a lower wage for 90 calendar days after they are first employed.

According to the DOL website, any wage rate above $4.25 an hour may be paid to eligible workers during this 90-day period.

“There are several states that have youth wages so we feel like it’s very important to establish a youth wage because many of the youths are looking for part-time jobs. It’s not really a starting wage, they’re trying to get skills worked in,” Castro said.

Lastly, the Guam Chamber of Commerce wants the legislature to reconsider the increase in Business Privilege Tax.

“We’re asking the legislature to reconsider the BPT increase. There’s an actual bill by Senator James Moylan, which will bring the BPT back to 4% so we feel that this needs to occur because even though you say that you’re going to raise the minimum wage, all the fee increases and taxes are going to basically null the increase. So we’re asking the senators that if you really want to help the people of Guam, let’s work together and let’s see about increasing government revenues in a different way,” Castro stressed.

The public hearing for Bill 136-35 is set for this Friday.