The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known Bahamian businessman yesterday warned that incorporating a mandatory lunch hour into the 40-hour work week would raise his payroll costs by almost 20 per cent, and told the Government: “You’re killing business.”

Dionisio D’Aguilar, president of the Superwash laundromat chain, told Tribune Business that the Christie administration’s proposed Standard Hours of Work reforms would create a “major logistical nightmare” for 24-hour operations such as his, plus small businesses that employed relatively few staff.

Given the relatively small staff numbers at his laundromat locations, and the day being split into three eight-hour shifts, the Superwash president said it was “not feasible” to require others to come in to cover staff on their mandatory one-hour lunch break.

And, given that staff would have to be paid “time-and-a-half” if they worked during their lunch hour, Mr D’Aguilar said that based on five lunch hours per week, this worked out to almost another extra day - increasing his firm’s payroll costs by around 19 per cent,

Mr D’Aguilar, himself a former Chamber of Commerce president, said the Government “must be crazy” to increase labour/hiring costs for Bahamas-based businesses at a time when the official jobless rate was almost 16 per cent and the pressure was on to reduce this.

Pointing out that, besides a depressed economy, Bahamian businesses also had to contend with an estimated 20 per cent rise in energy costs, National Insurance Board (NIB) increases and a relatively unproductive labour force, the Superwash president urged the Government: “My God, give us a break.”

And he called on the Christie administration to focus on reducing the current $500 million-plus deficit, rather than continue burdening Bahamian companies with increased operating costs.

Tribune Business revealed yesterday how the Government’s proposed Employment Act amendments propose including a mandatory, daily one-hour lunch break in the 40-hour work week definition.

In response, Mr D’Aguilar told Tribune Business: “I don’t know how to say this without appearing to be heartless, but the requirement of the mandatory lunch hour in a 24-hour environment creates significant issues for me.”

Pointing out that three shifts of eight hours each “divided very nicely into 24”, the Superwash president said the same did not apply to the seven-hour days proposed by the Act reforms.

“So, in a 24-hour environment, where you have a single employee, what do you do,” Mr D’Aguilar asked. “It’s not feasible to have someone come in the middle of that shift for one hour in the middle of the night...

“In an environment where you have a single employee, for example in our pressing department, what do you do? Do you close it down for one hour?

“It creates not only additional costs, but logistical issues. I’m worried about the logistics of making this work. I don’t want to seem heartless, but the reality is that I need someone to work for eight hours.”

Warning that the ‘mandatory lunch hour’ reform threatened to “unsettle the apple cart”, Mr D’Aguilar said it would not impact large companies or those where there were enough staff to cover for those on lunch breaks.

The real impact, he added, would be felt by 24-hour operations such as his and small businesses, such as retailers with just one or two staff.

Cashiers, he pointed out, have to log in and log out of the retailer’s system, adding that the lunch hour issue potentially presented “a major pain”.

Superwash staff had taken their lunch breaks at work for 42 years, and Mr D’Aguilar said the planned legislative reforms threatened to push small Bahamian businesses into closing during the lunch hour - effectively taking them back to the 1950s-1960s.

By including a daily “meal interval of not less than one hour” in those 40 hours, the proposed Employment Act amendments effectively reduce the Standard Hours of Work to 35 hours per week for Bahamian workers.

Or, put another way, if passed the amendment will require Bahamian companies to pay employees for five non-working, nonproductive hours per week - with the effect of both reducing output and increasing labour costs. It reduces the productive working week by 12.5 per cent, or one-eighth.

Doing the math, Mr D’Aguilar calculated the impact on Superwash of paying staff ‘time-and-a-half’ to work during what was supposed to be their mandatory lunch hour.

Based on five such ‘lunch hours’ per week, and time-and-a-half, he calculated that staff would effectively have to be paid the equivalent of 7.5 hours’ wages - almost matching the sum for an entire eight-hour day.

“That’s a significant increase in pay. You’re saying that for the same amount of work, give them another day’s pay,” Mr D’Aguilar told Tribune Business.

“You’re essentially increasing payroll costs by almost 20 per cent. In essence, we’re telling people that by doing this you must increase payroll costs by 20 per cent. I see it as imposing a 20 per cent increase in pay, and creating more headaches and logistical issues in small businesses and businesses such as mine, where they are opened for 24 hours a day.”

The Superwash president pointed out that the proposed reforms had surfaced at a time when the economy and many businesses were still struggling - threatening to impose an additional cost burden.

And they had emerged against a backdrop of recent cost and tax increases imposed upon the Bahamian private sector, namely an NIB contribution rise, utility bill increases and the likelihood of future tax increases as the Government sought to balance the Budget.

“We’re already an expensive jurisdiction to do business in, as our labour is not as productive and efficient as other countries of the world,” Mr D’Aguilar told Tribune Business.

“If someone works eight hours, you’re lucky to get six out of them. They’ll come in late, go to pick the children up from school, and then there’s the traffic problems on top. My God, give us a break. They’re killing business.

“I would prefer to pay a little more in taxes to get the Budget balanced, rather than have a 20 per cent increase in payroll costs to pander to their [the Government’s] political base.”

Urging the Government to prioritise reducing its fiscal deficit, Mr D’Aguilar warned that the proposed Employment Act reforms were also counterproductive to efforts to reduce the high unemployment rate, where close to 40,000 Bahamians are either jobless or not seeking work.

“Let’s tackle the deficit before we start heaping costs on business,” the Superwash president told Tribune Business.

“This is not the time for us to be dumping additional costs on people. Tell me what I’ve got to pay in increased taxes to balance the Budget before you come to load increased operating costs on to me.

“Utilities have gone up 20 per cent, labour’s gone up, everything’s gone up significantly. We have an unemployment problem, and increasing the cost of labour at this time is not the way to encourage a reduction of it.

“At 6 per cent, 7 per cent unemployment, yes, but at 14, 15, 17 per cent unemployment and you want to increase the cost of labour? You must be crazy.”