No Loopholes Under Labor Law

Opinion
Friday, June 26, 2009

No loopholes under labor law

By JACINTA M. KAIPAT
Special to the Saipan Tribune

I write to respond to the several letters that have appeared in the press about citizens who are unable to find jobs. There are no loopholes under the labor law, as has been repeatedly suggested.

PL 15-108 benefits local applicants

The new labor law fixed very significant problems for local applicants under the old law and extended protections to ensure that local applicants know about and get preference for jobs in the Commonwealth. PL 15-108 provides a new remedy - damages in the amount of six months' wages - in the event that a citizen is passed over for hiring by an employer who renewed or hired a foreign worker. Our Hearing Office mediates these complaints and offers prompt hearings on all complaints. I urge any citizen who thinks that he or she has been to come to the Labor Department and file a complaint. The staff of the Hearing Office will help you fill out the complaint form. Our investigators will go out and gather the employer's records to present at a hearing. PL 15-108 provided this protection specifically in order to guard against the kind of problems about which the letter-writers complain.

Individual problems

In order to try to solve the individual problems at hand as expeditiously as possible, I looked at our records with respect to applications filed by the letter writers to see if we could help with their applications. I found that none of the letter writers save three had used our system-at least under the names that they used when they wrote to the press. (Mr./Ms. Loly A. Sablan and Mr. Kelvin A. Aldan never used our system to apply for a job online. Mr. Greg Magofna used the system once, back in January. Mr. Gregorio Cruz and Mr. Willie Brundidge, Jr. have used the system many times.) I looked at our complaint files to determine if any of the letter-writers had used the protection that PL 15-108 offers citizens in cases where a foreign worker has been hired or renewed over a qualified citizen. None had except for one.

No waivers

There are no waivers of the workforce participation requirement or the job preference requirement under PL 15-108. All waivers were abolished. Waivers were granted based on subjective standards. Under prior law, there were hundreds of waivers granted to employers that allowed them to hire foreign workers when they were not in compliance with our workforce participation requirements or our job preference requirements. Those who long for the “old days” remember a time of full employment when these waivers did not matter much because citizens were employed by the government or private- sector jobs were available.

Advertising renewals yields jobs for citizens

The letter-writers ask why we require employers to advertise jobs where the employer hopes to renew a foreign worker. The simple answer is that advertising renewals helps create jobs for locals. During the 12 months after April 2008, approximately 600 locals took jobs that were intended as renewals for foreign workers. In the past, there have been renewals of foreign workers where no local applicant was available. But now, for example, Tony Pellegrino's training program is producing local applicants with carpentry, plumbing, electrician and other skills that were not in the job market before. When a renewal in one of those categories comes up, we are now training local applicants with the skills to claim these jobs and they are successful in doing so.

Incentive exemption

The letter-writers ask why we have an incentive exemption, and they blame the exemption for shutting locals out of jobs. The answer is that we have the exemption in order to encourage businesses to hire locals and the exemption actually creates good jobs for locals; it does not shut locals out. This came about as a result of a year-long study led by the Public Auditor's Office, which recommended that the Legislature ultimately adopt this Incentive Exemption as it opens up those jobs paying more than the minimum wage to qualified locals. In order to give businesses that hire local workers in good jobs some competitive reward, PL 15-108 allowed a limited incentive exemption. The incentive exemption can be claimed only when an employer has reached the performance benchmark in hiring locals well above that required by the workforce participation provision.

Phasing out of the incentive exemption

The Legislature gave the Labor Department the regulatory power to phase out the incentive exemption, and the Department has been doing that over time since PL 15-108 was enacted. Four months ago, the Department began a consulting process with respect to further proposed changes in the exemption. It is very important that labor regulations not cause businesses the kind of increased costs and burdens that contribute to closures. If we do that, we lose jobs forever. After taking into considerations the comments we got in the informal consultation process, in May, the Department proposed regulations that would increase the performance benchmark to 50% (from 35%) U.S. citizen employment in designated job categories in order to qualify for the exemption, and that would limit the job categories to which the exemption applies. Those regulations go into effect on July 1, 2009. This change will cut back the exemption.

Small business exemption

The letter-writers complain about the small business exemption, which allows businesses with fewer than five employees relief from the job preference requirements. At the time PL 15-108 was enacted (and today), the concern of the Legislature was that small businesses both fail more quickly, thus eliminating jobs, and are the engine of recovery from an economic depression because they start up more quickly when the economy turns around. The Legislature wanted to encourage small businesses. For the same reason, legislators in the House have recently proposed allowing small businesses relief from the gross receipts tax.

Phasing out of the small business exemption

The Legislature gave the Labor Department the regulatory power to phase out the small business exemption, and the Department has been doing that over time since PL 15-108 was enacted. Last year, I issued a notice that required all retail businesses that accept food stamps to have at least one U.S. citizen employee. This opened up about 100 jobs for U.S. citizens. This year, we have increased the requirement so that all small businesses of any kind must have at least one full-time U.S. citizen employee. This change will cut back the exemption.

Standards

One important feature of PL 15-108 was to eliminate discretionary waivers and require that exemptions be based on objective standards set out in regulations. The Director of Employment Services enforces standards rigorously. An employer either qualifies for an exemption or does not. We do not do favors for anyone. All employers are measured by the same standards. The system is fair and effective in meeting competing interests of preserving businesses and jobs and, at the same time, ensuring citizen access to available jobs.

Enforcement

The Director of Employment Services and the Director of Labor have effective processes in place to enforce the requirements of PL 15-108 that provide U.S. citizens preference for available jobs. Citizen complaints are investigated and those who violate the law are prosecuted under agency cases brought by the Director of Labor. The Hearing Office deals quickly with any complaints from citizens that a foreign worker has been hired over a qualified citizen. Whatever may have been complaints about enforcement in past Administrations, these people are dedicated civil servants doing their jobs well.

It is not possible to satisfy everyone. Some citizens will not find jobs for reasons that employers find compelling and that are not prohibited by law. Anyone who has hired any kind of employee, even a houseworker, knows that there are certain important traits that employers want to see in employees. The Labor Department is doing a good job in assisting U.S. citizens to find and take advantage of the job opportunities available to them that they are qualified for. We have come a long way over the past three years, and we continue to look for ways to improve. I welcome citizen comments. My e-mail address is depsec2@gmail.com.

Jacinta Kaipat is the Deputy Secretary of the CNMI Department of Labor.