Commissioner Albert Bryan, Jr. told the 29th Legislature today that the Virgin Islands Department of Labor has prepared a response plan to assist the thousands who will lose jobs when the HOVENSA oil refinery closes its doors on St. Croix.

The approach to deal with the displaced workforce is three-pronged: respond, retrain, re-employ. That means the Labor Department will ensure laid off workers receive essential social services and monetary support, will be provided access to educational resources, and will receive assistance in connecting to companies with job openings either in the territory or abroad, Commissioner Bryan explained to members of the Committee on Housing and Labor. 

While the government will do all in its power to mitigate the economic shock, the commissioner warned that Virgin Islanders will feel the impact of HOVENSA's closure at gas pumps, in their WAPA bills, and even at the market.

“Well, our worst nightmare is now a reality, and the serious implications for the Virgin Islands, especially the island of St. Croix, is cause for grave concern,” he said. “This event will affect every man, woman and child in the territory as its implications are far reaching.”

The closure of the territory's largest private employer will result in the termination of 1,018 HOVENSA employees, and an estimated 1,200 more who work for the refinery's contractors, he said.

The territory's unemployment rate held at 8.5 percent in December, but St. Croix fared worse at 9.6 percent. The refinery closing will put out of work an additional 10 percent of the island's workforce, elevating the territorial rate to 12.5 percent and St. Croix's to an unprecedented 18.7 percent.

HOVENSA paid some of the highest wages in the territory, and its loss will manifest itself in a marked reduction in the median household income of the Virgin Islands. Wages are also expected to plummet as the job market becomes flooded with people looking for work.

While the refinery closure comes at an already difficult time for the Virgin Islands economy, Commissioner Bryan reminded legislators that the people of the Virgin Islands are resilient, and all must work together now more than ever. “When serious crisis strikes, we always pull together for the greater good of our people,” he said.

The Department of Labor will ensure that the refinery and all its contractors comply with the stipulations of the Virgin Islands Plant Closing Law, which requires laid off employees to receive one weeks’ pay for every year of service. HOVENSA has indicated it will honor collective bargaining and employment agreements, in addition to offering severance plans, which include additional benefits, the commissioner said.

The severance plans might delay an uptick in unemployment filings until later in the year, the commissioner said, but the dismissed employees will have immediate access to Labor's services and programs.

He told legislators he may need to hire additional employees to help process the flood of claims that are expected.