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Tax eyed for hiring alien workers
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Posted on Nov 23 2006
The group conducting the ongoing private sector jobs audit is eyeing the possibility of taxing businesses for employing foreign workers to encourage local hiring.
Public Auditor Michael S. Sablan, who is part of the collaborative project between government and private sector, said that the CNMI may consider imposing a disincentive levy to discourage the hiring of nonresident workers.
This practice, he said, is being done in Singapore, which has similar workforce issues as the Commonwealth.
According to Sablan, a disincentive levy, charged per employee per month, would level the playing field among those employers who pay more than the minimum wage to attract residents and those who choose to hire nonresidents at a lower rate.
Currently, employers who hire nonresidents pay an annual labor processing fee of $250 per worker, in addition to a $25 immigration fee.
Enforcement of labor rules and regulations, particularly in relation to vacancy announcement and job categories restricted to locals, is also important in ensuring that residents get jobs in the Commonwealth, Sablan said.
“Right now, residents don’t have any confidence in the vacancy announcement process. They believe that jobs are posted in newspapers out of formality, as part of the process of renewing the contracts of nonresidents. We need to restore confidence in the announcement process,” he said.
Furthermore, he said that penalties should be imposed against employers who violate restrictions.
The Nonresident Workers Act reserves job positions like accounting clerks, telephone switchboard operators, secretaries, messengers, receptionists and book keepers for resident workers.
But some employers are able to hire nonresidents for these positions by giving them other titles, although the duties and responsibilities are the same, Sablan said.
“We have a responsibility as a community to take care of our community. There is something fundamentally wrong when hundreds of our residents are leaving to start a career elsewhere, while our economy employs 30,000 foreign workers,” he said.
