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V.I. Businesses Ready for Minimum-Wage Increase

Dec. 28, 2006 — Workers receiving minimum wage will receive another increase in their paychecks on Jan. 1, thanks to a 2005 decision by the V.I. Legislature.
"The minimum wage increase came in two parts," said Sen. Terrence "Positive" Nelson, Labor and Agriculture Committee chair. The 26th Legislature approved an increase in the minimum wage by "50 cents last January and 50 cents this January," Nelson said.
"We need to continue to raise the minimum wage," Nelson said, adding that the territory's high cost of living makes the new minimum of $6.15 still "not quite livable." "I am supportive of expanding the minimum wage further," Nelson said.
"It's a positive thing for the territory," said Wally Hamed, general manager at Plaza Extra in the United Shopping Plaza on St. Croix. "There will be more money circulating."
The Plaza Extra stores on St. Thomas and St. Croix employ more than 450 employees, of which 20 percent are paid minimum wage. Hamed said the raise would not adversely affect Plaza's business, saying "It's part of doing business."
"Every state has a right to set its own minimum wage," said Glen Smith, director of Labor Relations. "The Legislature in its wisdom decided to raise the wage in two steps." Smith said residents affected would be "elated" because the cost of living in the territory is higher than most areas. "Any raise [in minimum wage] would be a sigh of relief," Smith said.
Natalie Knight of Messages Mail and More on St. Thomas said the increase would not affect her because as a small business she doesn't have minimum-wage employees. However, when her business increases, she said she anticipates hiring students for part-time, after-school work.
"As a whole, payroll and taxes would increase, and it would affect struggling businesses," Knight said, adding business owners should be able to use their discretion to set wages for inexperienced workers. "We understand employees need to be paid more; but for entry-level employees, if they are productive, you don't mind raising their pay."
"I give my employees a raise every January," said Enad Shallot, owner of Pine Peace Mini Mart on St. John. Shallot said only one of his nine employees earns less than $6 per hour and noted that worker would be getting a raise "for sure."
Smith said the government would enforce the wage increase as it always has. The Department of Labor is ready to take complaints by any employee not receiving at least the minimum amount of pay the law now requires.
According to Smith, the federal government may soon increase the federal minimum wage. If that happens, Smith said the territory would have to comply with the amount if it is set higher than $6.15.
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