What Is the Minimum Wage in the U.S. Virgin Islands?
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2020 Minimum Wage in Virgin Islands: $10.50 per hour
The Virgin Islands are a United States territory, so they are required to follow the terms of the Fair Minimum Wage Act of 2007, which established the federal minimum wage of $7.25 per hour across all U.S. states and territories.
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While some states and territories have passed their own laws raising the local minimum wage above the federal minimum wage, no state or territory is allowed to set their minimum wage for hourly employees below the $7.25 standard, unless they are incrementally increasing it to match the federal minimum wage. This is the case with American Samoa, which is stepping its minimum wage up by 40 cents every three years until it meets the federal minimum wage.
The U.S. Virgin Islands is one of the territories that has passed its own minimum wage law. In 2015 the Virgin Islands legislature passed Bill No. 31-0236, which was later signed by the territorial governor. The bill notes that, although the federal minimum wage had not been increased since 2010, when the $7.25 standard went into effect, the Consumer Price Index had increased by 8% nationwide. Meanwhile, the cost of living in the Virgin Islands had increased considerably, even though the minimum wage hadn’t been altered to reflect this change.
In response to this economic data, the bill incrementally increased the minimum wage in the Virgin Islands, initially to $8.35 per hour, then $9.50 per hour beginning in 2017, and finally to $10.50 per hour by 2018. The bill also empowered the territory’s Wage Board to reevaluate the minimum wage on an annual basis starting in 2019, depending on prevailing economic conditions.
Tipped: $7.35 per hour
The $10.50 minimum wage in the Virgin Islands does have a few exceptions. In recognition of the importance of the tourist industry to the territory’s economy, the bill exempts tipped employees in the tourism and restaurant industries from the minimum wage.
However, the businesses in the tourism and restaurant industries are still beholden to a minimum wage of no less than 30% of the current minimum wage. As of 2019, that is $7.35 per hour. After the year 2020, the Wage Board will have the option to adjust this amount depending on economic data.
This base rate of $7.35 per hour does not include any tips that an employee collects during their shift.
An employee working at minimum wage for 40 hours a week in the Virgin Islands could expect to earn $420 in that week. This is true whether they are working for the whole week or collecting some amount of holiday pay. However, this amount does not include taxes and benefits withdrawn directly from a worker’s paycheck, which may reduce the amount they take home.
An employee working a full workweek for a whole year at minimum wage in the Virgin Islands could expect to earn $21,840 annually. This is true whether they are working for the whole week or collecting some amount of holiday pay. However, this amount does not include taxes and benefits withdrawn directly from a worker’s paycheck, which may reduce the net amount that they take home.
Overtime: $15.75 per hour
Since the Virgin Islands are a U.S. territory, they are beholden to the terms set forth in the Fair Labor Standards Act, which governs employee rights and pay. That means that hourly employees who work over 40 hours in a single workweek are entitled to 1.5 times their base pay for each hour over 40 that they work. In the Virgin Islands, a minimum wage employee could expect to earn $15.75 per hour for each hour of overtime work.
Virgin Islands Minimum Wage Increase News
According to Bill No. 31-0236, which established the current minimum wage in the Virgin Islands, the territory’s Wage Board is empowered to increase the minimum wage as needed, depending on economic data and cost of living in the Virgin Islands. The Wage Board gained this power in 2019, but, so far, they have shown no indication that they will use it to increase the minimum wage anytime soon.
However, even if the territorial government in the Virgin Islands doesn’t act to increase the local minimum wage, that doesn’t mean that workers need to settle for $10.50 per hour. Depending on how long you’ve been with a company, and the quality of the work that you do, you may be able to ask for a raise from your employer.
In addition, many minimum wage workers are also finding opportunities to boost their income in the developing gig economy. The gig economy consists of side jobs or “gigs” that a person might use to supplement their main job, or as their sole source of income. Gigs such as leading tours or hosting guests via AirBnB are likely to be very popular in the Virgin Islands, which relies heavily on tourism for its income.
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Nick Cesare is a writer from Boise, ID. In his free time he enjoys rock climbing and making avocado toast.