Pressed by the issue about many Palauans choosing to leave Palau in exchange for a higher paying job abroad, a bill is now being worked out in the Olbiil Era Kelulau (OEK) to gradually increase minimum wage in Palau to $8.50 per hour.
The bill was first introduced by President Tommy Remengesau, Jr. in January last year who originally proposed to gradually increase minimum wage by raising it from $3.50 to $4.00 by October 2017 and adding 25 cents increase each year until it reaches $8.50 per hour by year 2026.
The Senate version of the bill, Senate Bill No. 10-3, proposes that beginning October, every employer in Palau must pay its employees a minimum wage of $4 per hour and gradually add an increase of $0.50 per hour each year after that until it reaches $8.50 per hour on October 1, 2026.
This raise in minimum salary, however, does not apply to employees whose contracts are executed or extended prior to October 1, 2017 but it reiterated that minimum wage applicable at the time of its execution must be applied.
The bill also emphasized that “service charges, tips and other gratuities given to an employee shall not be used as payment or credit toward payment of the minimum hourly wage.”