Thirty Percent Rule Should Be Challenged in Court

January 24, 2014

Since Edith Deleon Guerrero was sworn in as the CNMI Secretary of Labor, the agency that has remained silent for the last few years has woken up with a roar. DeLeon Guerrero is the former executive director of Workforce Investment Agency (WIA), which is scheduled to merge with the CNMI Department of Labor (DOL) October 1, 2014. She was also appointed by Governor Inos to serve as the head of the Labor Task Force, which is tasked with placing local U.S. citizens in jobs.

Governor Eloy Inos posted a statement on the CNMI WIA website. It reads in part:
A high priority objective is to provide work for our local resident workforce. It is necessary to expand our emphasis on job training and employment of Commonwealth citizens in the private sector. I am looking at government-private sector partnerships aimed at maximizing meaningful opportunities for our citizen workforce in the private sector. 
With this objective in mind, I recognize that the laws implementing the 30% requirement for US citizen employees and effective skills training programs have not been rigorously enforced in the past decade. I have directed the Secretary of Labor not to grant any waivers of the advertising requirements with respect to job vacancies so that citizens will know of all job vacancies. Similarly, there will be no waivers of the 30% requirement. The Department of Labor will also be instituting a new enforcement program to implement the 30% rule including publication of the names of non-complying companies and persons who appear to be holding full-time jobs at more than one company, and possible other sanctions.
Perhaps the CNMI law requiring that businesses implement a 30 percent rule has not been enforced because it conflicts with federal law and is unconstitutional.

U.S. federal immigration laws apply in the CNMI and no where within the laws does it state that every business must hire 30% U.S. citizens. There is no such law in any other state or territory that is under federal immigration laws. Can such a seemingly unconstitutional law be legally enforced?

If the USCIS has issued CW permits to a company then what legal right does the CNMI Government have to inflict a 30 percent U.S. citizen workforce rule on that company? I say, "None!"

The USCIS scrutinizes every CW application and every renewal. It requires documentation that the position was advertised and that qualified U.S. citizens had an opportunity to apply for the job. The issuance of CW permits is a legal endorsement of the business hiring those alien employees.

The CNMI DOL has reportedly warned a tour agency that it does not meet the 30 percent U.S. citizen workforce requirement. The labor enforcement agents of the DOL conducted an "onsite compliance inspection" of Korean owned business, Hana Tour Service, Inc. on January 15, 2013.

According to the Saipan Tribune, the company was served with "a document request, called the Business Establishment Compliances and Monitoring Report."

From the Tribune:
On Jan. 31, 2013, the company produced the requested documents—a total listing of workforce statement of compliance, a copy of two latest quarterly employer’s withholding tax, payroll summary, map of business location, business license, and annual corporate report. 
On Feb. 4, 2013, Labor’s Enforcement served Hana Tours with a notice of warning, informing the company that it was not in compliance with the 30 percent requirement. At the time, the company had 32 employees, consisting of zero U.S. citizens, two permanent residents, and 30 foreign workers. 
The notice instructed the company to contact Labor’s Citizen Job Placement Section for assistance in obtaining referrals of U.S. citizen applicants or making other arrangements to meet the 30 percent U.S. workforce requirement. 
In the nine months following February 2013, Hana Tours hired several U.S. citizens and permanent residents, including two persons referred by Labor’s Citizen Job Placement Section. Even with these hirings, though, the workforce percentage never approached the 30 percent level mandated by CNMI law, Cody said.
This law forces the employer to determine the makeup of it's private workforce based on nationality and citizenship rather than on skills, years of experience, education and other practical qualifications. Such a regulation could force an employer who wants to maintain qualified employees to have to hire less qualified U.S. citizen employees merely because they must meet a discriminatory quota. Such a regulation could interfere with best business practices and the employer's right to hire and retain the most qualified applicants and employees. Such a regulation could cause extensive financial harm to individual businesses and ultimately harm the economy of the CNMI as well.

Hana Tours caters to the Korean tourists. Therefore, the most qualified tour guides must be fluent in the Korean language. If having fluent Korean language skills is a qualification for a job position, then it should be the employer's right not to hire a U.S. citizen who could not meet that requirement. Even DOL investigator Cody made note of the fact that "22 of the 32 jobs in Hana Tours’ workforce are tour guide positions that require fluency in the Korean language, as these guides deal directly with Korean tourists."

So, according to DOL, what does the business have to do to comply with the 30 percent rule? Should the business fire a competent accountant or secretary who has been with the company for years and replace that employee with a U.S. citizen?  Or perhaps it could reduce the total number of employees by firing some of the other competent employees so that the 30 percent requirement is easier to meet?

It appears that is exactly the destructive business practice that DOL expects Hana Tours and other CNMI businesses to carry out.

Cody admitted that it would be difficult for Hana Tours to hire locals who are fluent in the Korean language. His solution? Fire the other Hana employees.

He was quoted in the Saipan Tribune as saying, ". . .these 22 positions will be difficult to fill with U.S. citizens or permanent residents given the foreign language requirement. . . several other positions, such as accounting jobs, may be filled with local hires."

This interference will just deter from attracting new businesses to establishing in the CNMI and will cause many businesses to close their doors.

The CNMI DOL also fined Sherwood Electronics and Appliance Store $1,000 for violating the 30 percent law.  The company has four employees, all of whom are nonresidents.  Three are electronics technicians and one is the manager and owner. The owner is a Korean national. How many unemployed U.S. citizen qualified electronic technicians are there in Saipan?!

Apparently the CNMI Government is trying to raise revenue by issuing fines under a law that is most likely superseded by federal law. These businesses may want to challenge the 30 percent rule in court. It looks like the CNMI Government has resorted to bullying and extortion.

Does this 30 percent rule also violate EEOC laws? It appears that it does.

A new CNMI labor law is in the works. Governor Inos stated:
"The Legislature is working on a new omnibus labor bill. Such a bill should reflect our experience under the existing laws extending back to 1983, Public Law 3-66, and the new demands of our changing economy. It is time to schedule hearings and to work together to produce legislation that meets our current needs. Such legislation must continue to provide the basic safeguards of our current guest worker program. At the same time, however, it must bring renewed emphasis on the opportunities and incentives aimed at increasing the participation of local residents in the private sector workforce."
The existing CNMI labor bill conflicts with federal law. It should be interesting to see what discriminatory and conflicting provisions lie in the new proposal.


Anonymous said...

The vast majority of "locals" meaning indigenous people here do not really want to work. It's better to let them get hired on as government workers and let everyone else do their jobs. They are lazy and that's a fact. There are too many novinas, funerals, rosaries, birthdays, sick days, tenth anniversaries of some dead uncle to warrant any kind of meaningful work.

Anonymous said...

I sure hope that one of these companies take this to court. That has to be done to clear the air on this matter.

If indeed there is a US Cit. that can actually qualify, such as be fluent in the Korean language, then let them bring this up in person with the company and DOL along with an outside Korean speaker to test his/her language ability.

The same goes for any other company job requirement such as Electronic Technician,etc. These are not skills that can be taught on the job or in a few weeks.

BTW, what about the CHC and the nurses?
What about the CUC and the engine Mechanics?
The list can go on and on.

Looks like Inos and DOL are going back to the Garment factory days and are trying to force these companies to hire no show employees (relatives) that will only collect a paycheck so they the company can fall under the requirements.

And one wonders why there has been so little foreign investment in the CNMI over the past many years.
This in someways resembles the past affirmative action programs that did not work.

I wish that I could make many positions that would require the position to be fluent in a particular language so I could get cited and take this to court.

Maybe I can start a translation service for Bicolana dialect, or the Pompanga dialect.
I will advertise and see how many US Cit.(in the NMI) are qualified.

Anonymous said...

Stupid Cody! Stupid solution to fire employees to meet stupid 30% requirements! We're not only losing competent workers here but also income in the form of taxes from these hard working employees, most of them have children studying in private schools which are suffering too due to declining numbers of students. More and more people leaving the island, cuc rates inevitably increase because of lesser consumer. NO US CIT WILL WORK FOR $5.05 AN HOUR!!! STupid! never learned...

Anonymous said...

Great post! This law is plain stupid, destructive, idiotic, nonsensical, harmful and grossly conflicting with federal law. This is a lawsuit waiting to happen. The more foreign businesses DOL targets, the fewer foreign investment the NMI will see. The more foreign businesses they target, the fewer will stay in this unfriendly atmosphere. Looks like Inos is a clone of Fitial. Ah, but we all knew that, didn't we? The dynamic Tan-fan duo that brought in all the garment workers then cried indigenous rights. Don't make me puke.

Anonymous said...

Hope for a healthy and happy new year to you and yours Wendy.........

The CNMI has over 200 "markets" a vast majority of them small operations run by some "XXX Corp" each Corp applying for dozens of CWs, they won't hire locals because they aren't even hiring the CWs, it is all to get them a status only on paper. How can honest people say the CW program isn't abused.
USCIS, ICE, FBI along with the local government agencies are working to uncover these companies who are abusing the CW and E2C program whether the owners are local or foreign, along with all the scam marriages. Not a day goes by without a story where a foreign national and local are in Fed Court for marriage fraud.

Until the rampant fraud and misuse is taken out it taints the entire program.

Anonymous said...

12:55 "Maybe I can start a translation service for Bicolana dialect, or the Pompanga dialect.
I will advertise and see how many US Cit.(in the NMI) are qualified."

You can sure do that.

Do you have a US investor visa though?