Guam-based employer barred from hiring workers

The Department of Labor has barred an employer who is now residing in Guam and found to have engaged in unlawful conduct relating to the operations of her remaining business on Saipan.

Labor Administrative Hearing Officer Jerry Cody sanctioned businesswoman Xiao Mei Feng Castro by disqualifying her from employing nonresident workers in the Commonwealth for a period of five years.

Cody said the sanction applies to the renewal of existing workers as well as a prohibition on the hiring of new workers.

“The evidence establishes a systematic pattern of fiscal mismanagement and neglect of this business by this absentee owner,” he said.

He granted the request of Castro’s employees—Changfu Chi and Zhenghua Chang—to transfer to new employers.

Cody said all alien workers who are currently working for Castro are ordered to cease working immediately, with the exemption of Nestor Pinote, who evidently has a renewal application currently pending with Labor.

The hearing officer recommended that Pinote’s renewal application be denied based on Castro’s conduct.

According to Labor records, Castro is an employer who has been engaged in several businesses on Saipan, including an automotive repair shop, a house rental business, a karaoke bar and an air conditioning repair business.

In January 2007, Castro filed transfer applications to hire Chi as an auto mechanic and Chang as a commercial cleaner.

In July 2007, Labor issued deficiency notices, citing that the employer’s applications were missing several items, including a valid business license and an updated business establishment inspection for the automotive shop.

Labor also noted the employer’s need to justify the commercial cleaner position.

On Jan. 11, 2008, Labor denied the applications based on the uncorrected deficiencies.

Castro, Chang, and Chi appealed.

In his order issued last week, Cody said that, at the hearing, the testimony established that Castro has closed her house rental business and karaoke bar, leaving just her automotive shop in operation.

Cody said that Castro, who has resided full-time in Guam for many months, left her operations manager in control of the daily management of the business.

Castro visits Saipan about once every month, at which time she pays cash salaries to her employees. She maintains no separate bank account for this business; instead, she pays salaries in cash.

At the conclusion of the April hearing, the parties were ordered to provide by the next hearing some documents.

At the hearing on May 13, 2008, Castro failed to produce the requested cash bonds or a separate bank account.

Cody said that, at the hearing the evidence established certain troubling facts regarding Castro’s conduct.

The hearing officer cited that Castro began employing Chi and Zhang in February 2007 and continued employing them until the present—for more than a year—despite the fact that no conditional grants were ever approved for these two workers.

Cody said the business tax records demonstrate that Castro’s income generated by this business in 2007 was substantially less than the salaries allegedly paid to the employer’s work force.

“This fact makes it highly likely that not all workers were paid their full wages,” he said.

Castro testified that she pays her operations manager $800 to $1,000 per month. However, Cody noted, the manager’s contract specifies a salary of $1,700 per month.

Two other employee applications (Yang Tao and Marcelyn Pinote) have been denied but employer Castro has neglected to file any appeals for these workers.

Another employee, Zhang Xiu Ying, whose valid permit is scheduled to expire in July 2008, stopped working for Castro in April.

Yet, Cody said, the employer has neither terminated Miss Zhang nor reported her missing to the Labor director.

Cody said Castro’s problematic conduct includes the employment of workers for more than a year without conditional grants of transfer, failure to pay full wages to the operations manager, and the failure to report the abandonment of another worker.

He said the other unlawful conducts include the failure to keep financial accounts for the business in a separate bank account, and the fact that salary expenses greatly exceed the income generated by the business.