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Executive order: Minimum wage for workers in gov’t-contracted construction is now $15

By on July 30, 2018

SAN JUAN – Puerto Rico Gov. Ricardo Rosselló signed an executive order to increase the minimum wage for Puerto Rico construction industry employees to $15 an hour for government contracting. The order also requires locally produced cement for government construction projects.

In addition, the decree requires labor agreements for projects financed by the government to establish security conditions and professional training “for the protection of workers,” according to a release issued by the governor’s office, La Fortaleza, following his press conference there on the matter.

Local contractors complain that they are being discriminated against by the government in its project procurements in favor of stateside companies, which Rosselló acknowledged has happened historically, but noted differences when comparing local and mainland resource after a disaster.

“Sometimes there is not enough labor; sometimes they are huge projects that some of the local contractors do not qualify for and sometimes it’s remuneration. So what have we decided to do? We have decided to start looking for solutions,” he said at a press conference Monday.

The measure could apply to 36,000 to 44,000 construction workers, of which 21,000 are salaried employees who work for construction companies. “That is the potential universe of people that can be impacted as long as that construction company is bidding for construction work with the government,” Labor Secretary Carlos Saavedra said.

“One of the fundamental elements in the recovery of Puerto Rico is the construction industry, which is vital to be prepared for weather events and other emergencies that may affect us in the future,” the governor is quoted as saying in the release, adding that “now that Puerto Rico begins the road to reconstruction, it is indispensable that the local construction workforce be stronger than ever. We need more Puerto Rican construction workers, better trained, and better paid.”

La Fortaleza wrote that in other U.S. jurisdictions, construction employees make “about $70 per hour. In Puerto Rico, construction workers earn $7.25 an hour in the private sector and $8.25 in government contracting,” with the labor secretary adding during the press conference that the “average salary is $12 an hour; that includes the boss…. The median is $9.39 and it is way below [what stateside workers make].”

The executive order increases the minimum wage of construction workers to $15 an hour in government contracts, “in order to keep and attract the economic development that Puerto Rico needs,” the release reads.

It further adds that the Davis-Bacon Act “sets a higher minimum wage for public projects. This law does not apply to Puerto Rico; however, the considerations of justice that motivate it must apply on the Island as well.”

Regarding the order for the use of local cement, La Fortaleza compared the number of bags of cement produced in 2012, 17 million, versus the number produced in 2012, seven million, “which shows a collapse in the construction industry,” and stressed that the “use of materials produced in Puerto Rico protects local entrepreneurs, who create jobs and investment locally.”

The executive order requires labor agreements for projects financed by the government to “establish safety conditions and professional training that will protect workers…as long as there is no explicit prohibition to this type of agreement by federal laws.” The determination will not apply to previuosly established agreements.

Omar Marrero, the director of the Central Office of Recovery and Reconstruction, said Puerto Rico’s recovery cannot only be physical but also needs to be economic.

Edison Severino, of the Laborers’ International Union of North America (Liuna), said that when he learned that workers in Puerto Rico earned $7.25 an hour in public contracting, he “could not believe it.”

The governor said that if a company is already paying an amount that is five or six times higher to its employees and gets a contract in Puerto Rico, it would have no problem complying with the new rule.

“What typically happens here is that you have several companies competing for the same project and if they look to the side and try to make the proposal more competitive, they do not have any incentive or deterrent to raising their workers’ salary,” he said.

Rosselló thanked “the leadership” of Liuna, “specifically its vice president and eastern regional manager, Rey Pochino, as well as Edison Severino and John Vigueras, who have struggled to improve the working conditions of construction workers. We share the goal that our workers stay in our Island, helping to build the new Puerto Rico.”

(Courtesy photo)

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