In his third State of the Territory address in January, Governor Albert Bryan Jr. pledged to repay government employee pay cuts from 2011 to 2013. (File photo by Barry Leerdam, Legislative of the Virgin Islands)
Governor Albert Bryan Jr. passed law this week to provide some of the federal excise tax dollars that Congress gives to the Territory each year to repay government employees who had temporary 8 percent wage cuts from July 2011 to July 2013.
That year the government faced a sustained tens of millions of dollars in annual deficit and had amassed a lot of debt to fund the government after the global financial collapse of 2008.
Governor John deJongh Jr. proposed a number of austerity measures, but the legislature rejected some and passed them instead the VI. Economic Stabilization Act in June 2011, that includes an 8 percent wage Employees who make more than $ 26,000 per year.
The cut should save $ 28 million a year, or around $ 56 million for the two-year term.
Seven unions sued the government over the wage cuts, arguing that they were in breach of their negotiated contracts and that other remedial measures, such as layoffs, were possible.
In March 2012 the unions lost the case in the US District Court. U.S. District Judge Curtis Gomez ruled the V.I. Legislators were legally allowable repeal of the union contract because the actions "have a legitimate and important public purpose," the lack of readily available alternatives, and the law governing the entire V.I. Government and not directed to a specific institution.
But in 2016 the third U.S. appeals court overturned the district court, agree with the unions that the cut violates the treaty clause of the US Constitution.
The ruling did not provide for immediate payment and the government continued to face serious deficits. The payments were not made at the time.
In his letter to Senate President Donna Frett-Gregory. Bryan said he intends to make the payment as promised the January state address of the territory.
"This includes all workers in the unions who challenged the action and those who were not union members but are affected by the application of the law," wrote Bryan.