Contractors urge government to amend minimum wage order
SAN JUAN – The president of the Associated General Contractors (AGC), Francisco Díaz Massó, asked Gov. Ricardo Rosselló to amend Executive Order 2017-26 to specify that the minimum wage increase for construction employees contracted by the government be applied prospectively.
Díaz Massó also requested that the seventh seat on the Multisectoral Committee for the increase of the minimum wage in Puerto Rico be for the AGC president.
“The truth is this has taken us by surprise and we are concerned that that one-dollar increase has a cascade effect on an industry that creates 20,000 jobs. This could have an impact of up to $40 million that we wouldn’t be able to absorb unless we amended existing contracts to consider this increase or that it only apply prospectively,” Díaz Massó told Caribbean Business.
AGC Executive Director Alisoami Vargas noted that the majority of workers in the industry make between $7.25 and $8.25 an hour.
In 2015, the average pay in the construction sector was about $10.11, while the median stood at $8.91, according to Labor Department statistics
“The construction sector is one of the most affected in recent years. If we have to absorb that impact, it would be devastating,” Díaz Massó insisted.
When asked by Caribbean Business, the contractor replied that the government currently owes construction contractors nearly $100 million for projects for several agencies.
Meanwhile, Labor Secretary Carlos Saavedra told the media that the 1,526 employees identified by the Office of Management and Budget (OMB) who are paid less than $7.25 an hour is a violation of federal statutes.
“Those are specific cases that represent an anomaly that must be addressed immediately,” he said.
The fiscal impact of the decision to increase the minimum wage for government employees and the total number of employees to whom the order applies will be revealed “soon” by Rosselló and OMB Director José Iván Marrero, who didn’t immediately respond to a request for comment on the matter.