Withholding of tax rebate

Department of Labor counsel, assistant attorney general Dorothy Hill, answers today’s questions.

Q: Can an employer withhold a tax rebate from an employee?

A: I don’t think so. First of all, the employer should not be in a position to “withhold” the rebate. It is my understanding that a rebate check would be made out to the employee. Under the Nonresident Workers Act, the employer could take possession of the rebate only if it was expressly stated in the employment contract presented to the Department of Labor that the employee agreed to sign his or her rebate check over to the employer. This agreement would have legal effect only if it was approved by the Department of Labor. It is unlikely that the department would approve a contract containing such an agreement.

Q: Can you explain the 45-day transfer regulations?

A: Under the Alien Rules and Regulations, there are four general categories of transfers: expiration transfers, consensual transfers, administrative hearing transfer, and transfers due to a reorganization or reallocation of garment quota numbers. As a general matter, transfer employers must fulfill most of the same application requirements as the original employer, including posting a Job Vacancy Announcement and a bond to cover medical and repatriation expenses.

Expiration transfers. At the end of a contract period, a nonresident worker may seek employment with a new employer without exiting the Commonwealth. Employers must give at least 30 days notice to an employee of its intent to not renew. If proper notice is given, the employee will then have 15 days at the end of the contract period to transfer to a new employer. In the event the employer fails to give notice at least 30 days before the end of the contract, the worker will be allowed 45 days following the end of the contract and seek a transfer employer. If the worker does not find a new employer and have the employer submit an application with Labor within the 45-day transfer period, he or she must depart the CNMI at the expense of the last employer of record.

Consensual transfers. The Labor director may grant consensual transfer during the contract period so long as the application is filed at least 10 days before the expiration of the contract. The new employer shall assume all legal responsibilities for the transferred employee.

Administrative Hearing transfers. Hearing officers have broad discretion to grant transfer relief as a remedy for various violations of the Nonresident Workers Act. Generally, administrative transfer orders allow nonresident workers 45 days to find a new employer, although the hearing officer has the discretion to make the period shorter or longer. If the worker does not find a new employer and have that employer submit an application with the Department of Labor within the 45-day transfer period, he or she must depart the Commonwealth at the expense of the last employer or record.

Transfer due to merger. The Labor director is authorized to provide transfer relief to a nonresident worker upon a showing that an employer is involved in a bona fide merger, acquisition, reorganization or incorporation. The director may also allow transfer if the Labor secretary reallocates garment quota number.

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