Labor disavows 1999 memo on surety bond for TWAs

The Department of Labor disavowed a 1999 department memorandum that stated all temporary work authorization renewal applications needed to be submitted with new surety bonds and that those bonds could not be used for multiple TWAs.

Labor hearing officer Jerry Cody said the memorandum, which was issued by an acting enforcement supervisor, could not be a legal opinion, as it was not issued by a lawyer. Besides, he said the issuance of the memorandum came about six years ago based on labor regulations that are no longer valid.

Cody pointed these out in an administrative order in connection with an appeal by Grace International, Inc. and workers Guo Yan Rong and Li Xiao Xian, who sought the reversal of the Labor Division’s denial of TWA renewal applications.

However, Cody said in his order that, while nothing in the law prohibits the company the same bond pertaining to a previous TWA, the Labor Division would not want to accept a bond that “would be likely to become embroiled in a legal dispute between the surety and insured if anyone ever attempted to collect on it.”

“I agree with the division’s position that it should not accept a bond where a legal dispute clearly exists regarding coverage between the surety company and its principal. Accepting such a bond as ‘surety’ for the employer’s obligations would only invite problems, given that a legal dispute would ensue if the worker ever tried to collect on the bond,” Cody said.

Cody allowed the processing of TWAs in favor of two nonresident workers, though, after their employer managed to correct previous work permit application deficiencies. Cody has instructed the Labor Division to process the TWAs in favor of the workers, reversing an earlier decision by the division to deny the renewal applications.

The Labor Division had initially denied the TWA renewal applications on July 20, 2005, with the division noting that the employer had failed to correct deficiencies in the application.

Cody noted that the company filed the renewal applications on behalf of the two workers on May 24, 2005. On June 4, the Labor Division served the company a deficiency notice, informing the employer that certain requirements, the workers’ police clearances and surety bonds, were missing.

Cody said the division gave the company 10 days to correct the deficiencies, but Grace International failed to submit the required documents within the deadline. The company, together with the two workers, appealed the division’s decision and sought an administrative hearing before the Labor Department.

While the company asserted that the surety bonds pertaining to the previous TWAs were still valid, it secured new bonds and made available the workers’ police clearances. (John Ravelo)