Effective October 1, the law, which applies equally to Palauan and foreign workers, set the minimum wage at $2.75 per hour. According to the law, employers face a $500 civil penalty for noncompliance, in addition to the amount of unpaid wages, taxes, and social security contributions. The law is not retroactive, and applies only to contracts signed after October 1. It does not include informal sector work, such as domestic work; some categories of agricultural work; NGO workers; and temporary or probationary work of students and youth under 20. There is no legislation concerning maximum hours of work. The Bureau of Labor and Human Resources has established some regulations regarding conditions of employment for nonresident workers. The bureau may inspect the conditions of the workplace and employer-provided housing on the specific complaint of the employees, but enforcement was sporadic, and working conditions varied.
Although there are occupational and safety standards, no law protects workers who file complaints about hazardous conditions. Anecdotal evidence suggested that noncitizens would likely lose their employment if they removed themselves from situations that endangered health or safety. Since foreign workers generally were not permitted to change employers and must depart the country if their contract ends for any reason, such workers were reticent about reporting abuses. There were no reports to the government of violations of occupational health or safety standards during the year. The Bureau of Labor and Human Resources, which has three labor inspectors, enforces safety standards and laws.
The national minimum wage provided a decent standard of living for a worker and family. Wages for domestic helpers employed in private households were generally lower than the minimum wage.
In addition to their wages, foreign workers usually were provided basic accommodations and food gratis or at nominal cost. The new minimum wage law stipulates that these costs may be deducted from wages paid. The country continued to attract foreign workers from the Philippines, China, the Republic of Korea, and Japan. During the year there were about 4,000 foreign nationals with work permits in the country; of these, approximately 60 percent were from the Philippines, 15 percent from China, and less than10 percent from Bangladesh.
Reports of mistreatment of foreign workers by their employers continued during the year. The foreign workers most likely to be abused were those who worked under contracts as domestic helpers, farmers, waitresses, beauticians, hostesses in karaoke bars and massage parlors, construction workers, and other semiskilled workers, the majority of whom were from the Philippines and China. The most commonly reported abuses included misrepresentation of contract terms and conditions of employment, withholding of pay or benefits, and substandard food and housing. In January the government passed a foreign labor tax, increasing the cost of hiring foreign workers. There have been no reported impacts on wages or benefits. There were also complaints of physical abuse. In a number of instances, local authorities took corrective action when alerted by social service and religious organizations. The Attorney General’s Office and the Bureau of Labor and Human Resources helped to resolve disputes or complaints between employers and foreign workers.