Palau Minimum Wage Passed – VIDEO

On April 30, 2013 Palau President Remengesau signed into law the first minimum wage increase in 16 years.  Beginning October 1st this year, the minimum wage will gradually increase from its current rate of $2.50 per hour to $3.50 per hour.  A 25-cent increase will be added each year, beginning October 1, 2013 until the minimum wage reaches $3.50. The new minimum wage would apply to all employees except those employed as farmers by a single employer, domestic helpers, caretaker, babysitters or houseboys as well as student employees and non-governmental organization employees.

 

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According to statistics that OTV acquired from the Bureau of Labor nearly 5,000 foreign workers will also be included in the minimum wage for the first time.  Of the 5,429 foreign workers currently registered, only 570 are listed as a farmer, domestic helper or houseboy. In other words, only 570 are eligible for an exemption from the minimum wage.  With many foreign workers being paid approximately $1.50 per hour, the increase in foreign labor costs could be well over 1 million dollars per month.  However, under the new law an employer paying the minimum wage would no longer be required to pay for employee’s travel, food, housing or other living expenses.

 

Former President Toribiong signed several human rights articles in 2011, one of which requires equal pay for all workers.  The Palau legislation never ratified the articles and are not enforceable under international law.

 

In addition to the minimum wage, President Remengesau also signed the mandatory retirement bill, which eliminates the mandatory retirement of 30 years service for pension benefits. Beginning on December 31, 2013, employees will be entitled to their pension benefits upon reaching the age of 60.

 

STATISTICS

TOTAL FOREIGN WORKERS: 5,429

Farmers                        107
Domestic Helpers        366
Houseboys                      97