Guest Worker Sues Oceania Insurance Company

June 21, 2008

In recent weeks questions have been raised about CNMI insurance companies not fulfilling terms of bonds. If an employer shuts down or declares bankruptcy the bond company is expected to cover any unpaid wages, unpaid medical expenses and a ticket back to the employee’s homeland. Yet the bond companies have consistently either not been asked to pay wages or have refused to pay when the CNMI Department of Labor has requested that they do. CNMI labor regulations require employers to secure a bond for every non-resident employee hired.

The Saipan Tribune reported that a former employee of Grace International, a garment company that closed in April last year is suing the bonding company:

Mei Li sued Oceania Insurance Corp. for breach of contract, violation of Consumer Protection Act, unfair claims settlement practices, and unjust enrichment.

Li, through lawyer Joseph E. Horey, asked the Superior Court to order Oceania Insurance to pay her damages, court costs, attorneys' fees, and restitution.

Horey stated in the complaint that on Sept. 23, 2002, the insurance company issued a surety bond to Grace International, guaranteeing payment in the event of Grace's failure to pay each of 12 factory employees.
How many other non-resident workers have administrative orders directing bonding companies to pay and have not received payment? What does DOL do after the period the company is ordered to pay lapses without them fulfilling the order?

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