HANMI presses for thorough review of labor laws changes

The Hotel Association of Northern Mariana Islands has sought an overhaul of the proposed comprehensive labor laws now pending before the House of Representatives due to its confusing and irrelevant provisions.

In a letter addressed to House Speaker Benigno R. Fitial and Rep. Florencio T. Deleon Guerrero, HANMI president Ron D. Sablan submitted an analysis made by the association’s legal counsel David Wiseman.

While he commended the House leadership in proposing HB 12-134, Mr. Wiseman raised doubts whether the adoption of a modified version of the federal Fair Labor Standards Act would help correct the grossly flawed system. The federal FLSA was drafted in 1938 to fix allegations of labor abuses, nonpayment of overtime and long hours of work.

In his analysis, Mr. Wiseman warned that the proposed measure may subject the CNMI to more serious attacks from its detractors by providing an incentive to the employers allowing them to “self-insure” for their refusal to send their nonresident workers for medical treatment while at the same time deducting medical insurance from their paychecks.

“Apparently, whether or not the employer decides to buy insurance or merely self-insure, up to 10 percent of the employee’s gross salary may be deducted for providing (or not providing as the case may be) actual medical insurance,” he said.

Deducting 10 percent from the employee’s salary or an arrangement that the nonresident worker will shoulder all medical expenses will cause his or her salary to plunge below the CNMI’s minimum wage of $3.05 per hour.

Since the bill limits the employer’s exposure to 80 percent of the guest worker’s medical costs, Mr. Wiseman said the CNMI taxpayers will shoulder the burden of the additional 20 percent when the employee is unable to pay.

Exempting employees of amusement and recreational establishments from payment of minimum wage and the maximum hour requirements means that they can work more than 40 hours in one week without receiving any overtime pay. Unfortunately, “amusement and recreational establishment” is not defined in the bill.

As a result, there is a need to review the federal regulations in connection with the definition of exemptions contained in the federal FLSA. This will prevent confusion which employers may encounter when a hearing officer at the Department of Labor and Immigration stray from the definition of Minimum Wage and Hour Act exemptions that are also contained in FLSA.

The bill also omits “bonafide executive, administrative, or professional” employees from the minimum wage and maximum hours exemption while the current CNMI law allows an exemption for such type of workers. “If one of the purposes of the bill is to stimulate the economy, it makes no sense to omit this exemption especially when no one will have a problem with the exemption,” Mr. Wiseman said.

The bill places a 40-hour limit on the number of hours a domestic worker can work in one week without receiving overtime compensation at a rate of one and one-half times the normal hourly rate for each hour worked. But the proposed measure later exempts employees engaged in baby sitting or housework from the payment of overtime.

It is not clear why the bill provides an exemption for motion picture theater employees and not hotel workers. Interestingly, the bill exempted wreath-making which mainly uses holly, pine, cedar or other evergreens when none of these materials needed are available on the island.

Furthermore, the CNMI may face problems with the Americans Disabilities Act since a section in the bill allows the CNMI Secretary of Labor to provide special certificates to employers willing to hire “handicapped workers” and pay them less than $3.05 an hour.