Worker’s Compensation, Holiday & Vacation Pay and Overtime Pay

New investors to the CNMI often ask what benefits are they required to provide their employees. Unlike government employments, there are very few benefits that an employer in the private sector must provide. But there are a few. This is a simple summary of the mandatory benefits that new employers must provide.1

Workers’ Compensation Insurance Coverage

Workers’ Compensation Insurance provides a benefit to employees who have an on-the-job injury or a work-related illness.

Is Workers’ Compensation mandatory?

Yes. The modern American Workers’ Compensation system is a no-fault system of compensation in predetermined amounts based on the injured employee’s wages for loss of earnings resulting from accidental injury arising out of and in the course of employment. All the states, including CNMI, have enacted workers’ compensation statutes to guarantee an employee compensation for workplace injuries regardless of fault and free of traditional common law defenses. While workers’ compensation is a no-fault system, it is not a form of insurance, a state-managed health and accident scheme, or a life insurance program.2 Instead, workers’ compensation is more like a contractual remedy that compromises an injured employee’s right to common-law tort action for work-related injuries in return for relatively quick and certain compensation. In other words, the statute imposes liability without fault on the employer and also prohibits employees from filing common law suits against employers.

The CNMI Worker’s Compensation Program was created by the enactment of Senate Bill 6-54 into Public Law 6-33, the CNMI Workers’ Compensation Law. It is a social insurance plan that compensates employees for disabilities incurred from work related injuries regardless of fault, a no-fault insurance program that is solely paid for by the employer.3

What are the employers’ responsibilities?

(1) Obtain Workers’ Compensation Coverage upon Hiring of the First Employee. Employers shall obtain workers compensation insurance and the coverage shall take effect upon hiring of the first employee and the term of such coverage is generally one year. This is mandatory. All employers must renew their insurance policies upon the expiration of the current policy.
(2) Pay the premium of workers’ compensation insurance. The employer is solely responsible to procure coverage. In other words, employer shall pay the entire premium of the workers’ compensation insurance.4 It is notable that it is a violation of law for the employer to deduct an amount from the salary of the employee for payment of coverage, and if convicted, the employer is guilty of misdemeanor by a fine of no more than $1,000.5
(3) Obtain a Certificate of Compliance. A Certificate of Compliance (Form WCC-100) is a form used by the employer to certify to the Administrator that such employer has secured workers’ compensation insurance.
(4) Obtain Proof Showing Attempts to Comply If Unable to Secure An Insurance Coverage. If an employer is unable to secure coverage from locally licensed carriers, such employer must present proof showing attempts to comply with the law by submitting a letter of denial or rejection from at least three (3) local carriers indicating the reason for denial.

Holiday & Vacation Pay

In the CNMI there are many government holidays when agencies are closed but that does not have to be the case with your company.

What day’s off must a private sector employer give its employees?


There is no requirement that employers in the private sector give any specific days off. However, most companies give New Years Day off. Chinese owned companies often give Chinese New Years off. It is also popular in the CNMI, because there are so many Christians, to give All Souls Day (October 1), Christmas (December 25), Good Friday, and Easter off. If Christian holidays are recognized by the company, there should be no discrimination against other religions and Muslim holidays like Ramadan and Jewish holidays like Rosh Hashanah should also be given off for those employees who practice those religions.

What are the mandatory holidays for government employees?

Government employees receive leave with pay on each legal holiday, and any government employee required to work on a legal holiday is paid double his or her regular salary.6 CNMI legal holidays for government employees include all federal holiday observed7 and the Covenant Day (March 24), Good Friday, Commonwealth Cultural Day (Second Monday in October), Citizenship Day (November 4) and the Constitutional Day (December 8).8

Is there mandatory paid vacation leave in the CNMI?

No. However, paid vacation leave will likely give an employer competitive advantages over its competitors. Moreover, “[m]ost CNMI employers provide group medical insurance, and vacation benefits to their employees, and only a few provide other ‘benefits’ such as premium pay and dental and life insurance.”9

Sick Leave

There is no requirement that employers in the private sector provide sick days or sick leave to their workers. However, most employers do. Otherwise an employee with the flu will come to work and then instead of one employee out sick the whole office may be staying home.

Some employers require a doctor’s slip to allow the employee and excused day off. This is not considered a “best practice” except with employees who have an uncommon amount of sick days. A best practice is to require the employee to call their supervisor when they are sick and before their shift starts, then they can go back to bed.

Family Medical Leave Act (“FMLA”)

The FMLA entitles eligible employees to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Eligible employees are entitled to:

1. Twelve workweeks of leave in a 12-month period for:

(a) the birth of a child and to care for the newborn child within one year of birth;
(b) the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;
(c) to care for the employee’s spouse, child, or parent who has a serious health condition;
(d) a serious health condition that makes the employee unable to perform the essential functions of his or her job;
(e) any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;” or

2. Twenty-six workweeks of leave during a single 12-month period to care for a covered servicemember with a serious injury or illness if the eligible employee is the servicemember’s spouse, son, daughter, parent, or next of kin (military caregiver leave).10

FMLA only applies to employers that meet certain criteria:

(a) Private-sector employer, with 50 or more employees in 20 or more workweeks in the current or preceding calendar year, including a joint employer or successor in interest to a covered employer;
(b) Public agency, including a local, state, or Federal government agency, regardless of the number of employees it employs; or
(c) Public or private elementary or secondary school, regardless of the number of employees it employs.11

Therefore, small businesses with less than 50 employees do not need to comply with the FMLA.

The CNMI mandatory Family Sick Leave applies only to the government employees.12 However, a recent bill has been proposed to introduce Employee Clinical Administrative leave for employees of covered employers, including private sector.13

Time Off to Vote

An employee who is a U.S. citizen and eligible to vote is entitled to time off to vote on election day for no more than two hours (excluding any lunch or rest periods). The time off is to be between the time of opening and closing the polls to allow two consecutive hours in which to vote. A voter shall not, because of the absence used to vote, be liable to any penalty, nor shall there be any rescheduling of normal hours or any deduction made, on account of the absence from any usual salary or wages. There is a proviso in the law that the two hours off to vote is not applicable to an employee whose hours of employment already allow for a period of two consecutive hours when the employee is not working when the employer and can vote. But, lunch hours and break times are not to be counted in the two period.

The time off is for voting. If an employee takes the time off and fails to vote, upon verification of that fact, the employer may make the appropriate deductions from the salary or wages of the employee.14

Military Service Leave

In CNMI, only government employees who are permanently employed are given paid or unpaid military service leave.15 However, there has been a proposal to amend the current policy to allow probationary government employees and term-limit status employees the same benefit.16

Court Leave

U.S. citizens who are 18-years-old and older may qualify to serve in the federal courts on a jury.17 The same is true for the local courts. Jury duty is mandatory. If an employee is summoned to serve as a juror, they must report to the court to serve jury duty. Employees may also be subpoenaed as witnesses in a case. A subpoena is basically and court order and cannot be ignored. In CNMI, employees who are called upon to serve as jurors or as witnesses must be granted leave as required by the court (called “court leave”). Employers are not required to pay the wages of an employee out on court leave. Jurors receive a small payment from the court to compensate them for missing work, and witnesses receive a witness fee from the party who subpoenaed them

Minimum Wage and Overtime Pay

Although not technically a benefit, it is important to emphasize to new investors to the CNMI that we have minimum wage and overtime laws that apply here.

The Federal Minimum Wage in CNMI is $7.05 per hour beginning September 30, 2017 with additional increases of $0.50 an hour each year on September 30 until reaching the minimum wage generally applicable in the U.S.18

Overtime pay is owed to an employee when they work more than 40 hours in a work week. The overtime rate is 11/2 times their regular rate of pay for all hours work over 40 hours in a workweek.19 Many workers (but not most) are exempt from the requirement that the employer pay them overtime. In a later article we will discuss what is an exempt employee under the FLSA. If you have any concern that your employee may not be exempt, pay them overtime when they work more than 40 hours in a week. If you make a mistake in determining who you must pay overtime to, it can be a very costly mistake.

1 As with this article and the other articles posted on our website the article is only a general overview of the law and are not a substitute for meeting with an actual attorney.
2 Modern Workers Compensation § 100:1.
3 What You Need to Know about the CNMI Workers’ Compensation Program, A Handbook for, Employers, Carriers and Employees, Dep’t of Commerce Workers’ Compensation Commission CNMI, Part 1 (hereinafter, “Handbook”).
4 3 CMC §9304.
5 Handbook, Part 2.
6 1 CMC §311.
7 New Year’s Day (January 1), Birthday of Martin Luther King, Jr. (Third Monday of January), Washington’s Birthday (Third Monday of February), Memorial Day (Last Monday in May), Independence Day (July 4), Labor Day (First Monday of September), Columbus Day (Second Monday of October), Veterans Day (November 11), Thanksgiving Day (Fourth Thursday of November), Christmas Day (December 25).
8 1 CMC §311.
9 Most CNMI Employers Give Only Medical Vacation Benefits, SAIPAN TRIBUNE (Oct. 13, 2011) (last visited September 11, 2018)
10 Family and Medical Act, Wage and Hour Division (WHD), U.S. DEPT. OF LABOR, (last visited on September 26, 2018).
11 Fact Sheet #28: The Family and Medical Leave Act, U.S. DEPT. OF LABOR, WAGE AND HOUR DIVISION (2012), (last visited on September 26, 2018).
12 See 1 CMC §8266.
13 A Bill for An Act, To Provide for an Employee Clinical Administrative Leave; and for Other Purposes, 12TH N. MAR. COMMONWEALTH LEG., S.B. No. 20-108, available at (last visited on September 27, 2018). If this Act is passed, then employees will be entitled to 16 hours paid leave per year to visit a Medical Service Provider.
14 Voting Registration, VOTING SMART FACTS MATTER, (last visited on September 26, 2018).
15 Erwin Encinares, Senator Urges Civil Service to Change Military Leave Rules, SAIPAN TRIBUNE, (Jul. 30, 2018).
16 Id.
17 Jury Service, U.S. COURTS, (last visited on September 26, 2018).
18 Employee Rights under the Fair Labor Standards Act, (last visited September 11, 2018).
19 Id.

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