Since January 1, 2007, the Virgin Islands has had the minimum wage of $6.15 per hour. That puts the Virgin Islands at a rate higher than the current federal minimum wage, and will put it higher than the first federal minimum wage increase—to $5.85 per hour—if and when the president of the United States signs that federal minimum wage bill into law. What does that mean for employers in the Virgin Islands. Well, for starters, the federal minimum wage will not affect them right away.
Both employers liable to follow the Fair Labor Standards Act in the Virgin Islands, and those employers who are not liable to follow the Fair Labor Standards Act, will both be paying the higher Virgin Islands minimum wage through the end of 2007. It could get interesting come mid 2008, when the second of the three federal minimum wage increases would then kick into effect. That would take the federal minimum wage to $6.50 per hour, which would be higher in that case than the Virgin Islands minimum wage.
Then we could see a differentiation between the rate that employers pay who are liable to follow the federal wage and hours labor laws, and those who do not have to follow them. But like I said, that is not until the middle of 2008—if the federal minimum wage bill even gets signed into law—and by then, the Virgin Islands government and its Department of Labor Relations could already be decided to increase the territory’s minimum wage.
Wait a second, I can hear you asking, why are the employers in the Virgin Islands even concerned about the goings on in Washington DC? Why do the federal minimum wage laws here in the United States affect things way out in the Caribbean. A quick history and political lesson then is in order.
The United States Virgin Islands are part of the overall Virgin Islands chain, but they have that United States before their name because they are politically included in the United States territory. There are four major islands in the Virgin Islands that are part of the United States—Water Island, St. Croix, St. Thomas, and St. John. There are actually many other smaller islands that are included in it too.
How they got to be part of the United States is an interesting side note in history—the government of Denmark sold the islands to the United States in the First World War—to the tune of $25 million—because the Danish government feared that otherwise the Germans would take over the islands and occupy them with submarines. At first, the people who lived on the islands were in kind of a limbo, but then by 1927, the United States gave the citizens of the Virgin Islands official U.S. citizenship.
So they have many of the same rights as you and me in the continental United States. But it also brings me back to my original point—the employers in this territory of the United States also have some of the same regulations and responsibilities over them, such as paying the federal minimum wage or in this case, the Virgin Islands minimum wage, as well as posting a minimum wage poster for both the territory and the federal government in their work sites. And like employers stateside, the employers in the United States Virgin Islands are also obligated under the Virgin Islands minimum wage law to keep employee records for as long as three years, and leave them open to inspection by the territory’s department of labor officials when and if these officials want to view them.
It will be interesting to see what will happen in the Virgin Islands when and if the federal minimum wage takes hold. Remember, we could have news as early as this week if the Senate and the House can agree on the tax break amount that they will give their small businesses. On the other hand, we could also be waiting a couple weeks before any agreement comes from the Senate and the House. But the big hurdle is passed—whether or not there should be any tax breaks at all. No, now we are at the point where the House did agree to have some tax cuts for small businesses. Now it is just a matter of figuring out how much tax breaks to give folks.
Nevertheless, chances are a new federal minimum wage could be enacted before the end of winter. If that is the case, then it will be 60 days after that that the new federal minimum wage will reach its level of $5.85 per hour. The Virgin Islands minimum wage of $6.15 per hour will still be higher than that, so there will be no issues for the time being with that.
The interesting moment will happen a year later when the federal minimum wage goes up to $6.55 per hour. Then will most Virgin Islands employers have to pay the new wage rate? Well, if they are liable to follow the Fair Labor Standards Act, they will also be required to pay the new federal minimum wage at $6.55 per hour, and then at $7.25 per hour when a year later it increases again.
It will be up to the Virgin Islands, though, if they will raise the territory minimum wage to meet the increased federal minimum wage for the other employers on the islands.
The U.S. Virgin Islands, like Guam and Puerto Rico, are territories of the United States, and as such, employers in the Virgin Islands typically have to follow many of the same laws that the employers in the states have to follow, such as the minimum wage. In the case of the U.S. Virgin Islands, employers actually have a higher minimum wage than the current U.S. federal minimum wage.
It dates back to a law passed in the Virgin Islands Senate back in November 2005. Then the territory’s legislature decided on a new minimum wage bill that increased the minimum wage there in two increments. The first came on January 1, 2006, when the Virgin Islands minimum wage went from $5.15 per hour, the current federal minimum wage, to $5.65 per hour. A year later, on January 1, 2007, the minimum wage went up to $6.15 per hour.
That means that the Virgin Islands were really on the cutting edge of the minimum wage increase trend that seems to have taken hold in states across the country, as workers’ supporters have seemed to have convinced the legislatures in the states, as well as those lawmakers in Senate and the House in Washington DC, that a new minimum wage is necessary.
The Virgin Islands minimum wage, getting back to our topic, is also a bit different than other minimum wages that we have seen. For instance, that $6.15 per hour rate is for businesses with more than $150,000 in annual revenues on average. Employers who earn less than that can pay $4.30 per hour to their workers. The Virgin Islands also adopts the federal minimum wage of $5.15 per hour, so that means that any employer who technically must follow the Fair Labor Standards Act must also pay the federal minimum wage at least, or the state minimum wage if they are liable for that.
Yes, back to an old familiar topic, but on a different and exotic location. The Virgin Islands are still considered U.S. territory, and being such, they are required to follow the same labor laws that many of the U.S. states have to follow. One of these labor laws has to do with workers’ comp. So let’s get our workers’ safety and injury hat back on, and dive back into a familiar topic, this time with palm trees and warm sand on our mind.
In the Virgin Islands, the workers’ comp system basically works for employers the way that we are used to. It is meant to provide medical and disability benefits to workers when they are hurt or get sick on the job. As in the United States, in the territories such as the Virgin Islands the concept of workers’ comp is meant to protect both employees and employers, though it might not always seem that way.
That’s because the workers obviously gets medical bills paid and disability covered through workers’ comp when they are hurt. As for the employer, they get the knowledge that, by accepting their workers’ comp benefits, the employee loses their rights to sue for liability issues.
Since workers’ comp in theory works so well, the government of the Virgin Islands requires all employers to have some of the coverage. That means as long as you have one or more employees under your keep, you have to have this type of insurance. That includes independent contractors and subcontractors, as well as private, public and government companies. In the Virgin Islands, workers’ comp is sold by a Government Insurance Fund.
If you fail to purchase the coverage, you could be sued by your employee when they get hurt on the job. That would make you a lot more open to paying huge court fees and penalties for such things as medical bills, as well as the employee’s pain and suffering from not being covered.
In the Virgin Islands, you are responsible for filing the accident report, too, to the Virgin Islands Workers’ Comp Administration. You have eight days to do so according to the Islands’ labor laws. That means within eight days of the employee telling you about their accident, then you have to report it to the state.
If you don’t, or if you refuse to sign the employee’s accident report at all, then you could be found guilt of a criminal misdemeanor. That leaves you open to receiving a fine of up to $2000. Then you could have to sit through a hearing with the Virgin Islands Workers’ Comp Administration, in which case you could get fined an additional $5000 if you are found guilty of willfully refusing to report an injury of one of your employees.
All the while, if your intention was to prevent a worker from making a workers’ comp claim that you didn’t think was valid, forget about it. Whether you sign and report their injury or not, they will still have their claim looked at by the Workers’ Comp Administration. So sign and report the workers’ comp injury, and then let the system work to detect whether an injury is valid or not.
After the worker is hurt and disabled, they may recover and want to return back to you. Under Virgin Islands labor law, you have to try to allow an employee to return to their original position, or at least try another position that they can handle. The labor law allows exceptions to this rule if you can prove that the employee cannot perform their old job or something like it, or that the employee actually quit on their own not related to the injury.
As you can see, if you do not follow these workers’ comp labor laws, the Virgin Islands may stop seeming like paradise.