Labor uncovers evidence of several problems with firm

The Department of Labor has found evidence of numerous problems with the businesses being run by a corporation.

Labor administrative hearing officer Jerry Cody said several employees of Meros Corp. appear to be working only 16 hours per week, even though no reduction work hours has ever been approved by the Labor director.

Cody also noted other discrepancies with Meros Corp.’s reported Business Gross Revenue Tax and withholding tax documents.

With such findings, the hearing officer affirmed the Labor director’s decision to deny Meros Corp.’s application to hire Macrino Q. Carreon as an aircon technician.

Cody granted Carreon’s request for transfer relief and directed him to register with the Labor Division of Employment Services within seven days.

He recommended that the Labor director conduct an agency investigation into the conduct and work status of the remaining employees of Meros Corp., who purportedly hold jobs as cook, waitress, and accounting technician.

Meros Corp. had filed a transfer application to employ Carreon as an “aircon technician” on Sept. 11, 2007. That same date, a conditional grant of transfer was approved at a salary of $3.55 per hour.

On Feb. 25, 2008, the Labor director denied the application based on a finding that the company’s financial assets did not support the hiring of Carreon.

Meros Corp. and Carreon appealed.

In his order, Cody said that, during 2007, the business of Meros Corp. consisted of a restaurant and an air conditioning service (Marmot Refrigeration Air Conditioning Service).

Meros employed four alien workers: an accounting technician, a cook, a waitress, and an air conditioning technician (Carreon).

The corporate secretary testified that the restaurant, known as “Rathkie Restaurant,” was open in 2007 only on weekends due to very slow business; therefore, the cook and waitress worked only about 16 hours per week for many months.

The Secretary noted that he did not actually manage the business, but left most decisions to Carreon.

Carreon testified that he had been appointed by the president of Meros Corp., who resides in the Philippines, to distribute salaries to Meros workers.

Cody said this arrangement was not approved by the Labor director.

Cody said the employer produced bank statements of the corporation at the hearing. He said the bank statements contain monthly balances that are extremely low for the management of a business (less than $200 monthly balance), except for a sudden infusion of cash in May 2008.

In May 2008, the available balance jumped from $852 in April to $7,902.

“The jump in bank assets within weeks of the scheduled hearing is suspect, particularly given the average balance of the bank assets within the past year,” Cody noted.

He said a computation of the income and expenses of Meros Corp. for the first quarter of 2008 reveals that expenses actually exceeded the income of the company. Cody said quarterly operating expenses plus salaries totaled $8,712 with quarterly income of $7,863.

The employer’s quarterly tax return lists all three Meros workers making exactly $1,704 each for the first quarter of 2008, even though two workers do not work full-time as reported.

Cody said the records appear to be false, given the testimony that the restaurant is closed most of each week. The air-conditioning repair business does not generate sufficient income alone to support full-time wages for the entire Meros staff, the hearing officer added.