Draft of New CNMI Labor Bill Raises Questions

October 30, 2011

The failure to include a status provision in PL 110-229 has created a humanitarian crisis in the CNMI for the legal, long-term foreign workers. Excuses, self-serving political agendas, inexcusable delays, inaction of members of the U.S. Congress, and missteps by U.S. Departments and agencies are contributing factors to the predicament, which could inflict irreversible damage and injustice to thousands of affected legal aliens.

Now to complicate the matter, a frightening bill is being proposed to govern labor (and in some cases immigration) in the CNMI. The bill is said to have been drafted by Governor Fitial’s “special counsels” Deanne Siemer and Howard Willens. The details of their contract have not been disclosed.

The draft bill is entitled, “A bill for an act to create a comprehensive state-level system to govern labor in the Commonwealth that operates in parallel with the federal labor laws” or “The Labor Act of 2011”.

As if they expect opposition, the authors of the bill defend it in the introduction stating:
Public Law 110-229 does not ipso jure preempt the Commonwealth's labor laws. In the United States federal system, there are areas in which the States share responsibilities with the federal government. Labor (including the terms and conditions under which workers are employed) is such an area. The federal government can regulate labor through its control of interstate commerce and immigration. But the States remain free to regulate labor under the power to control intrastate commerce and under the general police power. The Commonwealth has all of the powers of a State in this area, as well as the powers of local self-government under the Covenant. Employers and workers in the Commonwealth must comply with both federal and Commonwealth law.
The draft bill requires an alien registration, which I would classify as an immigration issue, not a labor issue. The U.S. government should have records of those who enter and exit the CNMI as well as records of all aliens who receive parole documents and visas of any kind. Still under this bill, the CNMI government, through the Department of Labor, will require local registration of every alien.

The draft bill reads: "Any alien who knowingly fails to comply with this section shall be guilty of a misdemeanor and upon conviction shall be punished by imprisonment for not more than 90 days, or the imposition of a fine of not more than $500 or both."

The registration appears to be a way for the CNMI to maintain its own immigration records. As has been the CNMI's practice, the bill suggests that the registration records will not be shared.

It states: "Registration shall be conducted by the Department for all classes of aliens. Registration information may be taken on oath or by declaration. Such registration information as the Secretary may require is confidential and may be made available only on request of law enforcement authorities in connection with criminal or juvenile delinquency investigations." The CNMI government has been uncooperative with federal agencies in sharing any data and statistics. Any information that has been shared has been questionable.

The proposed bill attempts not just to regulate labor, but also to regulate collections and payments unrelated to employment. It reads:
The Legislature finds that very serious and long-term damage is done to the Commonwealth's economy when the United States immigration authorities are unable to remove from the Commonwealth alien workers who are unemployed and out-of-status. Since the very beginning of operations under federalization of immigration, federal authorities have been unsuccessful in removing more than a tiny fraction of the aliens intended under Title VII of Il0-229 to be removed from the Commonwealth. The burdens are enormous on the Commonwealth's economy and taxpayers from unemployed aliens remaining in the Commonwealth. These alien workers migrate to the underground economy where temporary businesses pay no taxes, compete unfairly with legitimate employers, fail to comply with laws requiring consideration of qualified U.S. workers, abuse alien workers, and create law enforcement problems.

Unemployed alien workers pile up medical expenses, require food aid, are taken advantage of by landlords, and become involved in incidents requiring police attention. The Commonwealth must protect itself from this damage.
Firstly, the foreign workers who were issued umbrella permits (under Siemer’s own plan) are in the CNMI legally and cannot be removed until after November 27, 2011 if the federal government decides that they are out of status. Additionally, most of the police “incidents” involve indigenous U.S. citizens, unless of course, the bill is talking about those foreign victims of wage theft by non-prosecuted employers, foreign victims of police brutality, human trafficking of foreign workers and other incidents involving foreign workers.

The bill attempted to portray foreign workers as creating "long-term damage"to the CNMI's economy, but we all know it was the CNMI's policies, guest worker program and the lack of enforcement that was responsible for the problems and any damage caused in the CNMI.

The drafters of this bill failed to mention that there are hundreds of employers who paid no income taxes. How about the Tinian Dynasty that owes $30 million, and other CNMI businesses that owe hundreds of thousands in taxes? Doesn't their failure to pay taxes and the CNMI's inaction to pursue their debt contribute to the economic woes of the CNMI?

Employers who were required under CNMI law to pay medical costs for foreign workers failed to pay these bills. Because of lack of oversight and follow-up by the CNMI government, the unpaid bills (just like the unpaid wages that the foreign workers are owed) piled up to represent millions of dollars in uncollected charges. The CNMI government failed miserably to enforce their own laws to the extreme detriment of the CNMI economy.

Under this draft bill employers are responsible for ensuring that their employees pay their CHC medical bills and CHC must garnish wages up to a whooping 25% in order to collect payments that are due. Employers become the CNMI's collection agencies for all employees, whether they are U.S. citizens or alien workers. The provisions imposes extensive bookkeeping and record-keeping requirements on all employers and will be extremely time-consuming and expensive for large employers. The provision may serve as a deterrent for attracting potential investors to the CNMI.

From the draft bill:
CHAPTER 2. Medical care.
§4321. Employer responsibility for records
(a) Every employer shall provide to the Commonwealth Health Center, within 60 days of enactment of this section for current employees and within 30 days of the hiring or rehiring of any employee in full-time status, the employee's full name, identification information, and O-NET job number together with the full name and identification of the employer. The identification information may be social security number, CNMI drivers' license number, federal visa or permit number, or other positive identification number acceptable to the
Commonwealth Health Center. This information may be provided online, via fax, e-mail, or regular mail to the Accounts Receivable Section, Commonwealth Health Center.
(b) The Commonwealth Health Center shall within 30 days of enactment of this section establish and thereafter maintain a database of employer-employee information so that it can collect from wages or salaries paid by employers amounts due and owing the Commonwealth Health Center that are not paid by employees.
(c) In the event that an employer fails to provide records as required in this section, the employer may be required to pay to the Commonwealth Health Center from the employer's own funds (and not by deduction from the employee's wages or salary) the full amount due to the Commonwealth Health Center or a fine of up to $1,000 for each such failure, such penalties to be imposed by order of a court or hearing officer.
§4322. CHC responsibility for collections.
(a) The Commonwealth Health Center may collect directly from an employer up to 25 percent of the monthly wages or salary of any employee who fails for more than 30 days to pay the full amount due under any invoice issued by the Commonwealth Health Center until the full amount of the invoice is paid.
(b) As apart of its documentation with respect to every person to whom it renders service, the Commonwealth Health Center shall require government-issued identification and sufficient information about employment to allow collection of unpaid invoices.
(c) For invoices issued after the enactment of this section, within l0 days of the end of each month, the Commonwealth Health Center shall publish a notice in an English-language newspaper of general circulation in the Commonwealth the name and any other necessary identification information of any person who fails for more than 30 days to pay the full amount due under any invoice issued by the Commonwealth Health Center. This publication shall provide notice of non-payment, without violating privacy interests in the treatment provided or the amount owed, together with the invoice number and a 20-day period for objections to be filed to any aspect of the invoice.
(d) For invoices issued prior to the enactment of this section, the notices required in subsection( c) shall be published regularly so that within six months of the enactment of this section, all such notices have been published.
(e) Within 45 days after notification as provided in subsection (c), the Commonwealth Health Center shall send to the employer of any employee who fails for more than 30 days to pay the full amount due under any invoice issued by the Commonwealth Health Center a demand for the full amount due to be paid by withholding up to 25 percent of the wages or salary due that employee in each pay period.
(0 An employer who receives from the Commonwealth Health Center a demand pursuant to subparagaph (e) above shall make such withholding beginning with the next pay period and, within l0 days after the close of each pay period, shall pay the withheld amount to the Commonwealth Health Center until the full amount due has been paid.
(g) In the event that an employer fails to make withholdings and remittances to the Commonwealth Health Center as required in this section, the employer may be fined up to $1,000 for each such failure by order of a court or hearing officer.
The proposed bill requires the CHC and Attorney General Office to file quarterly reports on CHC billings and collections.

Another problematic provision in this draft bill requires alien workers to be subjected to a physical in the CNMI.  The law states that the employer will pay for the physical, but we all know that the costs are typically deducted from an employee's pay. If the alien worker fails to "pass" the physical then he/she must be repatriated and can be deported.

Imagine paying recruitment fees and going through the process of compiling documents and papers to land a job in the CNMI only to find that you didn't meet physical requirements after arrival. Here is what a foreign worker could face (Take note host countries):
(c) Notification. Upon receiving notice that there is a medical reason any alien worker or immediate relative should not be permitted to remain in the Commonwealth for health reasons designated as a threat to the public health in the Commonwealth by the Secretary of Public Health, the Secretary shall notify the alien worker and offer repatriation at the earliest
date on which it is medically safe to travel. If repatriation is not accomplished, the Secretary shall forward the relevant documentation to the federal immigration authorities for deportation.
The bill has a “workforce participation goal” to ensure that U.S. citizens are given preference in the local workforce. This is another provision that could be frowned upon by potential investors. The bill reads :
Chapter 2 
§4221 (a) In the full-time workforce of any employer, the percentage of U.S. workers employed shall equal or exceed the percentage of U.S. workers in the available private sector workforce unless attainment of this goal is not feasible within the current calendar year after all reasonable efforts have been made by the employer.
(b) The Secretary shall define the percentage specified in subsection (a) by regulation.
(c) The Secretary shall not waive the requirements of this section. 
§4222. Exemptions.
(a) The provisions of section 4221 shall not apply to employers of fewer than five (5) employees, provided however, the Secretary may, by regulation, require each business to have at least one employee who is a U.S. worker.
(b) The Secretary may remove the exemption available to employers of any number of employees against whom two or more judgments are entered in Department proceedings in any two (2) year period.
(c) The Secretary, or an authorized designee, may grant an exemption from section 4221 for a particular construction project of limited duration.
All employers with 10 or more employees are also required to comply with the workforce participation goal or they will be placed on a mandatory “manpower training and educational plan for increasing the percentage of U.S. workers in the workforce.”

The proposed bill allows extensive, unannounced worksite inspections by investigators.

The draft bill restricts due process by requiring an employee to file a labor complaint within six months of the "last occurring event."

Another provision states: "Damages may be awarded to a U.S. worker who is qualified for a job, the employer rejects the application for the job without just cause, and the employer employs and alien worker for the job." How will "just cause" be determined?

The draft bill preempts federal immigration law.  For example, it imposes a fine and/or imprisonment for any alien who fails to leave the CNMI after termination of work authorization. This would fall under federal jurisdiction.

Sanctions and penalties are stiff. The proposed bill is a revenue-generating bill full of fines for both employers and employees.

The bill represents more of the same. It may just serve as a repellent to foreign workers and investors.


Anonymous said...

I expect CHC to have massive collectibles from uninsured CW visa workers. Instead of hiring collectors, the CNMI creates laws to collect only from non-residents and puts the burden on collecting at the expense of mostly foreign businesses.

The CNMI can create laws such as minimum ages for certain occupations, minimum wages, mandatory insurance requirements for all workers, but they cannot create laws that only apply to non-resident workers. But I'm sure they will keep trying.

Wendy Doromal said...

6:51 The way I read this, the collection and documentation related to CHC bills does not specify only for alien employees. It requires employers to provide information to CHC on all full-time employees and to garnish wages of all full-time employees if they have outstanding debt. I did not see where it distinguished that the employees were aliens, but that may have been their intent. Any alien worker may want to consider if they can afford playing Russian roulette by working in the CNMI.

Anonymous said...

I am not a lawyer, but I seriously doubt that any wage garnishment or collection on money owed by employees can be done without going to court and an order being granted.
There is so much in this proposal that seems asinine and illegal..
This also sounds like Babauta and his "panel" are trying to get the private sector to do their job in regards to the new Corporation of the hospital.

Anonymous said...

From what I have learned, this legislation is worse than the Alabama and Arizona laws.

Anonymous said...

Congratulations to Howard Willens and Deanne Seimer, the new Zachares and Goldberg. When will local policy makers learn to say, "Thanks, but no thanks," to this pair of bloodsuckers. The damage they continue to do to the CNMI is incalculable.

Anonymous said...

Howard Penney Willens and Deanne C. Siemer continue to make extraordinarily invaluable contributions to the CNMI.

Without collecting for the care services provided, public health care in the Commonwealth will literally collapse, with catastrophic consequences to guest worker and citizen alike.

Particularly during these dark days of Obamacare, it is heartening that someone is doing something to enable the CNMI to salvage somewhat of a viable health care system.

Thank you, Howard and Deanne!

And thank you, Wendy, for keeping the spotlight on important issues affecting guest workers in the CNMI.

Anonymous said...

DS and HW, the bloodsuckers, vampires, witch and warlock and so fitting for Halloween, but dangerous for NMI. How much was the contract for their expert harm going to cost us this time?

Thanks for making this public. I wonder if the NMI Legislature even has a copy. So secretive and underhanded. Someone should send this to US Attorney General Eric Holder so he can add the NMI to his to-sue list along with Alabama and Arizona.

Anonymous said...

Is this from The Onion? Funny stuff.

Also, the requirement for "passing a physical" is an obvious ploy for bribe collections.

Anonymous said...

Anon 6:46, your last name must be Buckingham or Baka if you think those two have ever made a positive contribution to the NMI.

Anonymous said...

Let's count all the opportunities this bill provides for the CNMI's "government" to:

1) Hire a politically connected relative for a do-nothing job.


2) Demand a bribe.

I ran out of fingers, and toes.