Wages in FSM are low with minimum wage laws for government employees in all states and the federal government.  Only Pohnpei has a minimum wage for the private sector at USD 1.75 per hour. However, employers report that they cannot hire employees for less that USD 3.00 per hour. Employment in the public sector is preferred because the wages are significantly higher.  The minimum hourly wage for employment with the national government was USD 2.65. The minimum hourly wage for government workers in the individual states was: Pohnpei USD 2.00, Chuuk USD 1.25, Kosrae USD 1.42 and Yap USD 1.60. The FSM’s minimum wage was last adjusted January 1, 2015.

There are no laws regulating hours of work (although a 40-hour work week is standard practice, 32 hours was standard in Kosrae State), nor are there enforceable standards of occupational safety and health.  While there was one federal regulation that required that employers provide a safe workplace, neither the Department of Health nor the Environmental Protection Agency has enforcement capability, resulting in varying working conditions.  There is no law for either the public or private sector that permits workers to remove themselves from dangerous work situations without jeopardizing their continued employment.

Skilled labor in FSM is limited, with few FSM citizens trained to perform tasks of any technical nature.  Foreign workers, primarily Filipinos, are typically hired to fill roles requiring technical skills. In September 2018, after having banned all Filipino workers from working in the FSM in mid-2018, the Philippine Department of Foreign Affairs revised its deployment ban on Philippine labor coming to the FSM to ban only new recruits, exempting the 2,000 Filipino workers already in country.  Philippine overseas foreign workers were FSM’s main source for educated and skilled labor but with the ban in place this pool can no longer be replenished.

A labor dispute at a privately run hospital in Pohnpei led to the dismissal or resignation of several doctors and surgeons, all from the Philippines.  As a result, service hours were cut and capacities are in doubt. The hospital is one of the embassy’s preferred medical providers, as the island’s only other hospital did not meet hygienic standards, although the medical care itself was generally adequate for non-specialized treatment.

The majority of doctors, nurses, accountants, lawyers, engineers, construction foremen, and heavy equipment operators are overseas workers from the Philippines.

The FSM has no collective bargaining or strikes.  Unemployment is high, and workers are easily replaced.  There is no child labor, except in small family businesses.  Occupational safety and health standards are low.