(GFR Media)

The Oversight Board evaluates the scope of the executive order that increased the minimum wage in the Puerto Rican construction sector to determine whether the decree of Governor Ricardo Rosselló Nevares should be amended or eliminated in case it affects the implementation of the fiscal plan.

The entity confirmed to El Nuevo Día that they are working on this analysis.

This newspaper learned that the Board is evaluating the scope of Executive Order (EO) 2018-33, after the Puerto Rico Chamber of Commerce (CCPR, Spanish acronym) and the Private Sector Coalition (CSP, Spanish acronym) warned about the potential adverse impact of the measure.

From Rosselló´s perspective, it is urgent that a good part of the federal funds arriving to the island for post-Maria reconstruction stay in Puerto Rico through higher wages.

EO-2018-33 applies specifically to construction projects carried out by the government.

But representatives of the private sector interviewed by El Nuevo Día believe the measure will also raise the costs of private construction projects and affect other sectors of the  economy.

Comprehensive effect

"We request the Board to review this executive order by the power conferred in the PROMESA Act," reads a letter from the President of CCPR, Kenneth Rivera Robles, to his counterpart in the federal entity, José B. Carrión.

In the letter, dated last Monday, Rivera Robles assured the Board that the average wage per hour for construction workers in the mainland fluctuates between $ 10.71 and $ 30.48.

According to the Laborers' International Union of North America (LIUNA), construction workers earn about $ 70 per hour in the mainland. That argument was one of the factors considered by Rosselló Nevares, as the union explained to this newspaper.

Last Monday, El Nuevo Día revealed that LIUNA was the union that -through the firm World Professional Group (WP)- lobbied before La Fortaleza to achieve the measure that, in essence, is contrary to the Planning Board’s report. That report, dated last February, suggested Rosselló Nevares not to increase the minimum wage back then, due to the adverse economic effects it would have.

"This mandatory and disproportionate increase will have the effect of increasing labor costs throughout the private sector," said the Executive Director of CSP, Francisco Montalvo Fiol, in another letter to Carrión dated August 13.

The government is moving forward

During the past weeks, business organizations such as the Associated General Contractors (AGC), the Builders Association (AC, Spanish acronym) and the College of Engineers and Surveyors of Puerto Rico (CIAPR, Spanish acronym) have tried to convince the government of the effect that EO-2018 -33 would have, but they did not succeed.

Instead, yesterday, the Secretary of Labor and Human Resources (DTRH, Spanish acronym), Carlos Saavedra, told this newspaper that in the next few days he will issue a circular letter to agency heads with instructions on how to apply the regulations.

The magnifying glass of the Board

Yesterday, the Board confirmed to El Nuevo Día that they received the letters from CCPR and CSP, but did not say when they expect to complete the analysis of the executive order.

According to sources, representatives of the business sector have resorted to the Board due to the refusal of the government to accept their considerations and to temper the impact of the order.

On August 7, the Board announced that it had adopted a policy to demand the government to to consult all regulations and executive orders before their approval.

Although the controversial executive order was approved a week before the policy adopted by the Board, identified as "RRO Policy", sources assured that the federal entity has the power to take actions retroactively in light of section 204 of PROMESA.

RRO Policy establishes that the Board has the right to examine any rule or executive order, including those adopted before the policy was enforced.

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