CHC CEO Says He Will Violate Labor Law

September 20, 2012

How will the CHC solve the problem of the Immediate Jeopardy status imposed by the U.S. Health and Human Services, Centers for Medicare and Medcaid? Easy. CHC will violate labor laws.

CEO, Juan Babauta was quoted as saying that CHC will find at least one $13,000 defibrillator within the designated 23-day time frame.

The Marianas Variety reported:
“If that means other vendors don’t get paid or payroll is delayed then that’s the situation….the most pressing concern is to satisfy CMS’ certification requirements,” said the CEO while pointing to a whiteboard list of 21 CHC vendors.
There is just no way to properly compute the amount of hardship and suffering that delayed wages causes to employees. It is inexcusable that there are not local and federal agencies who act in a timely manner in the best interest of employees. The local and federal agencies that should be dealing with the CHC's ongoing labor violations have demonstrated no teeth, no sense of immediacy. They have compounded the problem by not acting in the appropriate way.

The U.S. Department of Labor recently dealt with the CHC's violation of labor law and unpaid wages by working out a deal for the mismanaged agency to pay back all of the $105,366.66 in back wages owed to nurses and other medical personnel. Instead of imposing a fine, an installment plan was agreed upon, according to the USDOL regional director for public affairs, Deanne Amaden.

Considering that for years the CHC has blatantly violated the Fair Labor Standards Act by not paying the nurses and other personnel on time or by committing wage theft by not paying the full wages that they were owed, it is contemptible that the U.S. Department of Labor's Wage and Hour Division would just give the CHC a slap on the hand. Certainly the CHC's history in violating labor law proves that the corporation cannot be trusted to fulfill its payroll obligations to its employees.

Furthermore, what local or federal labor agency is taking action on the fact that there is an eight-month delay in CHC paying the foreign workers their contracted housing allowances?

The USDOL Wage and Hour Division has been aware of the violations for years. As far back as 2010, I personally contacted them concerning the foreign nurses' unpaid wages. The ridiculously slow response time of this federal agency has caused unneeded suffering of hundreds of employees. Now it appears that the USDOL's no consequences "solution" will also result in further suffering, since CEO Babauta has promised to further violate the law by delaying wages.

The Saipan Tribune reported:
According to the federal official, the Commonwealth Health Corp. has agreed to “take specific steps and corrective measures to come into compliance immediately and going forward.” 
. . .As a result of the agreement between U.S. Labor and the health corporation and for immediately taking corrective action on the issue, U.S. Labor will not be filing any complaint against the corporation. 
“We consider this matter resolved with only the remaining installment payments pending and the ongoing distribution of back wage payments,” said Amaden.
Resolved?  Days after the press release was issued CEO Babauta vowed to delay wages! This is not resolved at all. Shame on the USDOL for having no teeth and for failing to issue a labor complaint as the department should have done.  Perhaps if the Wage and Hour Division had imposed a fine or a formal complaint, the CEO would have thought twice before making a public statement that he will, in fact further delay their wages. The  CEO's statement should be a wake-up call for USDOL and also for the remaining employees who need to seek employment elsewhere.