Interim Department of Labor Report Released


December 3, 2008


The Department of Labor released its Interim Progress Report #6 on the Implementation of PL 15-108 to the CNMI Legislature.  You can read it here. The report raises several questions and concerns.

The report attempts to clarify previous statements made by the Deputy Secretary regarding the increase in fees. Previously the Saipan Tribune reported:
In a press statement, Kaipat defended the fee increase, saying employers must help pay for the department's new efficient processing system.

“We funded and proved out the new Web site first, and then we changed the fee structure so we could continue operating it. We provided a much faster and more efficient alternative to job vacancy announcements. After everyone was satisfied with the way that the Web site worked, we proposed a fee increase to pay for it. Under this fee structure, the employers who benefit from the less expensive Web site alternative are the ones who contribute to pay for its upkeep,” she said.

She also said the Labor Department continues to upgrade the software for processing applications, which first rolled out in February 2008, and this costs money.

“We went from an enormous backlog in processing to a situation today in which we are virtually current on a day-to-day basis. The cost of the new processing system is also rolled into the application fee,” she said.

Further, she said, the Labor Department spent money on employment services by hiring new personnel to assist local citizens find jobs. “This is a critical function in the current difficult economic circumstances. The Labor Department cannot draw on Commonwealth resources anymore. We have to fund our operations through fees,” she added.
Both the Marianas Variety and the Saipan Tribune reported that the increase in fees would bring in an estimated $750,000.  The company contracted to maintain the website issued this statement in a letter to the editor

In regards to the article, “Fee increase intended to fund Labor’s Web site,” published in the Saipan Tribune on Nov. 14, 2008, I would like to clarify that billings to the department for website maintenance, design and hosting account for less than .007 percent of the total amount mentioned in the article.

Ron Smith
President, Angil Design, I

In the interim report, the Deputy Secretary says that the estimate was faulty:
The media coverage of the new fees was inaccurate because it was drawn to their attention in an inflammatory way. Three parts of their coverage were wrong. First, the total increase in fees does not bring $750,000 in new revenues. The reporter forgot that only business applications (not all applications) are charged the new fee.
However, the report fails to state what the true estimate of new revenue for the CNMI will be. 

The report also clarifies that the fees will actually be going into the General Fund:
"The fees charged for labor applications are not just for Departmental operations and the fee increase was not just for the new website. The fees charged for labor applications cover two sets of costs: (1) the entire cost of operations of the Labor Department (not just the website, which is a relatively minor cost); and (2) the estimated cost for health care, police, and other services attributed to having foreign workers in the Commonwealth. The original idea behind the application fees was to ensure that employers were paying the real cost of the presence of foreign workers in the Commonwealth, even though these costs must necessarily be estimated.
Some have claimed that the labor fees were increased to fund the federal lawsuit that Governor Fitial filed in September to stop federalization laws.

The report includes a paragraph on overstayers.  It states that DOL believes there are 900 to 950 overstayers. The most recent list of overstayers published this week contained two alien workers who were deceased, according to reports from guest workers.

A statement in the paragraph regarding orientation sessions for new employees stood out: "The new workers do not get their passports back until they complete orientation and their documents are checked out at Labor." I was surprised to learn that DOL takes the passports of incoming aliens.

The paragraph regarding the reduction of TWAs is also of concern. It states:
When workers file cases in federal or Commonwealth courts, the Labor Department asks for a court order if the worker is to be permitted to remain in the Commonwealth while out of status. We allow workers who have filed cases with the EEOC, NLRB, and U.S. Labor to obtain TWAs without any affirmative action from the adjudicating agency, but we are considering changing that policy. The EEOC
alone has more than 100 pending cases from the CNMI that were filed in 2006 and prior years and they have no estimate when they might reach these cases.
We all know that once a guest worker exits the CNMI, it is extremely unlikely that he/she can return to pursue a case. The workers stand a much better chance of receiving justice if they are in the CNMI to pursue the case. The report also does not mention how this policy would be changed or when.

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