Auditor: IPI cooperated but has yet to pay


An auditor appointed by the U.S. District Court for the NMI to monitor Imperial Pacific International (CNMI) LLC if it is complying with labor and payroll rules told the court yesterday that IPI did cooperate fully but has yet to pay the auditor for its work.

The independent monitor, accounting firm Burger Comer Magliari, did not find any improper deductions in the workers’ pay or find any major potential issues in its second report
That report covers 90 days from Aug. 16, 2019, to Nov. 15, 2019. The first report, which was filed in court last Aug. 16, covers three months that ended Aug. 15, 2019.

BCM managing partner David J. Burger disclosed that, from a logistical standpoint, IPI cooperated fully and extensively with them but it has yet to pay them $18,730 for their work on the first report.

Burger said they submitted their first report last Aug. 16 together with an invoice for their work.

Burger also noted that a consent judgment requires IPI to remit a second payment of $45,000 to the court on or before Nov. 1, 2019. He said they did remind IPI about the second payment but, as recently as Nov. 14, they do not believe the second payment had been made.

“We do not know if the payment was made between Nov. 14, 2019, and the date of this report,” Burger said.

Burger said they also identified three potential issues—dual rate system, break time, and after-hours duties—in their first report covering the period from mid-May 2019 to Aug. 15, 2019.

In his update on the three issues, Burger said they determined that overtime pay, if any, for employees under a dual rate system, is properly being recorded at the weighted average hourly rate for regular work performed, in accordance with statute and regulations.

“We made this determination through our testing of payroll registers,” he said.

On the break time issue, Burger said IPI issued a directive that requires employees to time out for breaks. He said IPI has also communicated to all department supervisors that break time is compensable, except for meal times, during which the employee does not perform any work.

Burger said they made this determination through interviews with employees and with IPI’s human resources personnel.

As for the after-hours duties issue, Burger said they did not provide IPI HR staff with any names, gender, titles or department information, to maintain the anonymity of the employee.

He said the HR staff pointed out that it would be difficult for them to remedy the situation without knowing which supervisor was asking a subordinate to perform after-hours duties without pay.

He said the HR staff indicated that they informed all department supervisors that having subordinates assist them during nonworking hours was not acceptable.

With respect to interviews from Aug. 16 to Nov. 15, 2019, Burger said issues of job titles and formal timekeeping were raised by the employees.

Burger said some of the employees interviewed stated that their job titles were changed without their knowledge.

Burger said they, however, did not find any employee who had been assigned to a different job title and had their hourly rate reduced.

He said they asked the HR staff about the changing job titles issue, and that their response was that they utilize a “Letter of Movement” whenever an employee’s job title is changed, and the employee is required to sign the letter indicating agreement with the change in title.

As to the issue of formal timekeeping records, Burger said employees of one department stated during their interviews that there was no time clock in their area that they could use to time in and time out. Instead, the employees said they have to fill out time sheets manually.

Burger said they asked HR about the issue, and that their response was that’s there may be employees in remote locations where there is no time clock.

Burger said the HR staff also stated that, with the replacement of the Kronos system, they actually have doubled the number of time clocks/biometric devices used to record employee work time.

He said HR staff promised to look at this issue further with the department involved.

IPI was placed on independent monitoring in connection with U.S. Labor Secretary R. Alexander Acosta’s lawsuit in federal court against IPI for alleged violations of the Fair Labor Standards Act over the construction of its casino/resort project in Garapan.

To resolve the lawsuit, IPI and Acosta agreed to an entry of a consent judgment. IPI agreed to pay a total amount of $3.36 million, which is composed of $1.58 million in back wages, another $1.58 million in liquidated damages, and $200,000 in civil monetary penalties.

Ferdie De La Torre | Reporter
Ferdie Ponce de la Torre is a senior reporter of Saipan Tribune. He has a bachelor’s degree in journalism and has covered all news beats in the CNMI. He is a recipient of the CNMI Supreme Court Justice Award. Contact him at
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