Private sector also sees work-hour cuts

In the wake of the CNMI government’s announcement last week that it is cutting the biweekly work hours of its employees from 80 to 64 hours, some private companies are following suit, cutting work hours and encouraging their employees to use their leaves.

According to Hotel Association of the Northern Marianas Islands chair Gloria Cavanagh, some hotels have been cutting operations and the first ones that suffer from this fallout are the foreign workers, more commonly referred to as CW-1 workers.

“We have to cut the [hours of] CW-1 workers before we cut the [hours of] U.S. employees but we are cutting hours as much as allowable by law and by the regulations the U.S. Department of Labor issued last year,” she said.

“We are trying our best to just hold on but when you are looking at occupancies that are in the 20%, something needs to be done. We need to have some sort of temporary waiver that would allow us to survive,” she added.

The coronavirus outbreak in late January has already resulted in the cancellation of flights from China and Hong Kong and, with the Marianas Visitors Authority projecting zero tourist arrivals from China until the end of the fiscal year, the CNMI economy expects to absorb an estimated loss of over $40 million by October.

One challenge that CNMI employers have to face is that U.S. Department of Labor regulations only deal with termination and not cutting work hours. “We cannot terminate everyone for a problem that we believe is going to be temporary, such as the coronavirus outbreak. Let us say, three months down the line and you are at a hotel that has 50% CW-1 workers, then you go up 80% to 100% operations, it is not possible to operate with only 50% of your staff,” Cavanagh said.

“So there is a need for some leeway to allow us to cut the hours, to allow them to take leave without pay voluntarily. …That’s kind of like what we are doing now. If you have a leave then you are off because you have to take all of your leave [credits] because there is nothing to do in the hotel,” Cavanagh added.

She said the decrease in the number of tourists and hotel cancellations were immediately felt. “By Jan. 26, we already felt the huge cancellations and sometimes there were, at most, 400 cancellations at one given time. The hotels that rely heavily on the Chinese market are the ones that are going to be affected the most,” she said.

She pointed out that there’s not much incentive for people to travel right now, considering the suspension of direct flights from China to the CNMI and the proclamation of President Donald Trump suspending the entry of immigrants and non-immigrants to the United States and territories who pose a risk of transmitting novel coronavirus.

“Sichuan Airlines, China Eastern Airlines, Beijing Capital Airlines, and Hong Kong Express cannot run loads if there are no passengers because they will just lose money,” she said, adding that majority of the customers of these airlines are not travelling.

Despite everything, Cavanagh stays positive, citing the CNMI’s experience when the SARS outbreak happened in 2002-2003. “SARS [severe acute respiratory syndrome] lasted for about six months. …The key is always going to be on the Centers for Disease Control if they going to come up with a vaccine,” she said. “Once they come up with a vaccine, then I think people are going to be inclined to travel and we are hoping that, when that happens, we are going to get people who [have a pent-up demand for] travel. At that point, we should be ready with precautionary measures at the airport,” she added.