Monday, May 28, 2007

H.B. 15-38, CS 1 SUMMARY

I have a digital copy of both H.B. 15-38, CS 1 and the Committee Report that goes along with it. This is the controversial bill that has everyone on the island pissed off on at least one provision.

Having my own reservations, I spoke to Cinta at great lengths about this bill last night. She assured me that this is a working draft. She has already had input from many sources and is now seeking the input of the general public.

Click HERE for a digital copy of the bill. I've copied and pasted the Committee Report below.

There will be a public hearing to discuss this tonight. The House Committee on Judiciary and Governmental Operations will be holding a public hearing on Saipan to hear testimonies, written and oral, on House Bill 15-38, CS 1 know as the Commonwealth Employment Act of 2007 on May 29, 2007 at 5:30 p.m. in the House Chambers, Saipan.

The House Chambers are up on Capital Hill. Here is the summary:

Below is a summary of changes to House Bill 15-38, A Bill for an Act to Repeal and Re-enact Chapters 4 through 8 of Division 4 of Title 3 of the Commonwealth Code (Nonresident Workers Act), to amend 4 CMC § 5708(a), (b) and (c); and for other purposes. The House Standing Committee on the Judiciary and Government Operations, with the assistance of the JGO Task Force, has made substantial changes to the original bill and will report the bill as House Bill 15-38, CS 1, A Bill for an Act to Repeal and Re-enact Chapters 4 Through 8 of Division 4 of Title 3 of the Commonwealth Code; and for Other Purposes.


SECTION 1 of H.B. 15-38, CS 1 renames the title of the Act to the “Commonwealth Employment Act of 2007.” This change was made to reflect the fact that the Act covers, and should cover, more than just the terms and conditions of employment for foreign nationals. The Act must also reflect the need to promote the hiring of local residents by mandating workforce participation levels and a preference for local workers, among other things.

SECTION 2 lays out the findings and purpose of the Legislature in enacting HB 15-38, CS1.

SECTION 3 of H.B. 15-38, CS 1 provides for the recodification of Title 3, Division 4 of the Commonwealth Code. The Committee feels that a recodification to more clearly divide the parts of Division 4 into Citizenship, Entry and Deportation, and Employment components is advisable to create a more user-friendly code. The Commonwealth Law Revision Commission has been consulted regarding this change and empowered to adjust the statutory codification if necessary to achieve this objective.

SECTION 4 of the bill is the reenactment of the Non-Resident Workers Act as Part 3, Chapters 1-6 of Division 4, the “Commonwealth Employment Act.” The Committee finds that this Act should not apply to persons admitted to the Commonwealth as tourists, or to persons employed illegally, i.e. without the approval of the Department of Labor, or to those persons employing others illegally in the Commonwealth, unless specifically indicated. It is the intent of the Legislature that persons illegally employing others or illegally employed be prohibited from using the terms of this Act to receive or avail themselves of a legal right or benefit. This Act shall not bar any other remedy provided by law. It is also this Committee’s strong sentiment that illegal employers should be identified and prosecuted vigorously under existing provisions of law.

Chapter 1 retains much of the current law establishing the power and duties of the Director of Labor and the Director of Employment Services within the Department of Labor. The Committee finds that it is necessary and proper to add a penalty provision for violation of §4403 Conflicts of interest. The penalty provision has been added to mirror the penalty imposed for violation of the moratorium on hiring (3 CMC §4607, which was adjusted slightly from the current provision). The Committee intends the $2,000 fine to be a mandatory minimum fine upon conviction. The period of imprisonment (up to 5 years) is at the discretion of the court. The Committee also finds that the 5 year bar to re-employment is critical to maintaining integrity in public employment without indefinitely penalizing persons convicted.

Chapter 2 has been created by the Committee to separate and more clearly define the Commonwealth’s employment preference for resident workers. The Chapter reaffirms the general employment preference for residents and re-enacts the exceptions for foreign national employment in agencies of the government.

Section 4511 defines terms necessary for the implementation of the Act. The term “domestic helper” is defined more clearly. It is the intent of the Committee to prevent employers from using domestic helper exemptions for other workers such as farmers and office employees. The purpose of exempting domestic helpers from the moratorium and the exit requirement is to preserve the relationship between employers and important household staff.

A new subsection (b) was added to §4522 to allow for a Secretary’s exemption from the job vacancy announcement requirement for certain projects.

Section 4524, which did contain job categories reserved for resident workers, was deleted. The Committee feels that workforce participation levels (§4525) and a stricter moratorium (§4601 et seq.) are a better way to promote local hiring. The new §4524 contains a provision mandating compliance with the “Resident Worker Fair Compensation Act” (4 CMC §9501 et seq.).

Section 4525 enacts workforce participation requirements. Certain positions must be filled by 50% citizens and permanent residents. The category of “human resources personnel” was added to this list. All other positions shall be filled by at least 20% citizens and permanent residents. The section prohibits the Secretary from waving any of the workforce participation requirements and exempts employers of fewer than ten or fewer foreign national employees from compliance.

Section 4526 allows for the continuation of light manufacturing waivers and for an exemption from the 20% requirement for particular construction projects of limited duration.

Section 4528 clarifies the process for a qualified citizen or permanent resident to challenge the decision of an employer to hire a foreign national worker instead of that citizen or permanent resident.

Section 4532 updates the exceptions permitting the employment of foreign nationals in various government agencies in light of Public Laws 14-89, 14-91, and various other public laws, as well as recent developments in the labor force of the CNMI. The section provides an exemption for foreign language instructors, special education instructors, and head start personnel in the Public School System. The section provides for an indefinite exemption for U.S. certified physicians and dentists. The section also contains an exemption for nurses and technical staff. It is the intent of your Committee that this Act should supersede but be entirely consistent with Public Law 15-45, relating to the status of foreign national nurses graduating from the Northern Marianas College. Textual, rather than substantive alterations of P.L. 15-45 have been made consistent with the spirit of P.L. 15-45 to ensure expedient codification and clarity in application. The only addition to P.L. 15-45 made through this Act is to allow nurses who attend private vocational nursing schools in the CNMI to get the same exemption from the 2 year experience requirement as NMC graduates. There is an exemption for the Northern Marianas College for foreign language instructors, research scientists, and other technical employees. There is an exemption for the Commonwealth Utilities Corporation for engineers, mechanics, and utility technicians. The Department of Commerce has an exemption for part-time census takers. Finally, there is an exemption for foreign language translators for specific agencies in the government. This list of agencies should be strictly adhered to in the exemption process.

The Committee received comment on this section from the Public School System (PSS). The Committee agrees with PSS that the positions of special education, head start, and foreign language instructors can be difficult to fill with U.S. citizens. The Committee feels, however, that this exemption should not be available indefinitely and that PSS should be better prepared to recruit U.S. citizens for those positions when the provision expires in 2010. Consistent with actions of the 15th Commonwealth Legislature (in defeating H.B. 15-182), the Committee declines to extend an exemption for the Department of Public Works (DPW). The Committee finds that the exemption for government translators should be strictly limited to the listed agencies.

Sections 4533 and 4534 work together to require government agencies that hire foreign nationals to submit and implement a manpower training plan to convert to resident workers and then penalize those agencies that fail to submit a plan by suspending their privilege of hiring foreign national workers. The Committee finds that the Office of Personnel Management shall approve no new contracts for foreign national workers for suspended agencies.

Chapter 3 continues the moratorium on the hiring of foreign national workers. It is the intent of the Committee to repeal and re-enact those portions of Public Law 11-76 that relate to the moratorium on the hiring of foreign national workers. It is the intent of the Committee to preserve the intent of P.L. 11-76 through this repealed and re-enacted Moratorium on Hiring of Foreign National Workers (§§4601-4607 herein) and through Chapter 7 of Division 5 of Title 4 of the Commonwealth Code (4 CMC §5701 et seq.).

Section 4601 should not be read as limiting the exemptions available to the government in §4532. The government’s hiring authority for foreign national workers shall continue until it expires as provided in the Act.

As proposed, Chapter 3, Section 4602(a) permits the renewal of contracts for foreign national workers and allows for foreign national workers to return to the CNMI as renewals after their six month exit required under §4953. This effectively enables employers to retain good employees, subject to the six month absence. The Committee feels that without this provision, foreign national workers would be considered “replacements” after their six month absence and in many cases would be barred from entry. Section 4602(b) expands the number of exempted job categories but simultaneously removes the Governor’s exemption from the moratorium. The Committee feels that the governor’s exemption is subject to abuse. The Committee also removed fishermen from the list of exempted job categories. The Committee feels it is appropriate at this time to make fishing positions subject to the moratorium in order to promote local involvement in the fishing industry. The exemption for major new development was amended to provide a lower investment amount and to encourage the development of the tourism industry. A legislated exemption was added to cover light manufacturing.

As stated supra, the penalty provision in §4607 now matches the penalty for violation of §4403.

Chapter 4 is reserved.

Chapter 5 retains the current provisions of law regarding certification pre-clearance (currently Chapter 8 of Division 4 of Title 3). Few substantive changes have been made. It is the Committee’s intent that agreements already in place such as the Philippine Oversea Employment Agency (POEA) and with the Chinese Economic Development Association (CEDA) fall under §4802 if applicable.

Chapter 6 defines the terms and conditions of employment of foreign nationals.
Section 4911(b) establishes a definition for a “bona fide” non-profit religious affiliate. It is the intent of the Committee to limit entries for religious activities under the new §4927 (infra) to such organizations. The Committee finds that a broad entry provision for religious activities is subject to abuse.

Section 4911(c) defines “debarment” as the temporary or permanent prohibition pursuant to an administrative order, on employment by an employer of foreign national workers.

Section 4911(e) defines “Foreign national worker.” The definition takes into account the purpose of the Act, which is to regulate all foreign national employment, with very few exceptions. The definition should be strictly construed to avoid a situation where foreign nationals are admitted to perform work or services without an employment contract. It is the intent of the Committee to protect both employers and foreign national employees through the contract process. The exceptions to the definition are included and may be further defined by the Secretary of Labor, in consultation with the immigration director and the Attorney General. The Committee finds that the Act shall not apply to consular and other employees of foreign governments, foreign investors, persons employed by foreign business associations having their principal place of employment outside the CNMI, artistic, cultural, educational, and scientific presenters or performers remaining in the CNMI for less than 21 days, or tourists. The Secretary may further define the term by regulation consistent with the section.

Section 4922 now requires that affidavits that are executed outside the CNMI must be attested to under penalty of perjury inside the CNMI at orientation. This incorporates the intent of S.B. 15-65. The section also requires a standard health insurance contract as a condition of entry and requires that copies of any recruitment agreements used in hiring the foreign national worker be attached to the application.

Section 4924 empowers the Department of Labor to develop a bonding or other surety requirement for employers of foreign national workers. Due to past problems in this area, the Committee is reluctant to leave the traditional bonding requirement in place without strict oversight. Section 4924 requires yearly reporting to the Legislature for this purpose. Additionally, the Committee feels that a so-called “judgment bond,” i.e. a bond that is payable immediately upon entry of an order of the Department or a court, is preferable to the current system. The Committee intends for the Department to develop adequate safeguards by regulation to ensure that bonds are payable.

Section 4925 now requires that the entry permit be provided to the foreign national worker at orientation (§4934).

Section 4926 requires a foreign national worker to submit proof of earnings in excess of 150% of the federal poverty guidelines for the State of Hawaii prior to sponsoring immediate family members for first-time entry. The Committee finds that requiring a foreign national worker to earn sufficient income before bringing family members into the Commonwealth for the first time serves the important government interest of maintaining the public welfare and not overburdening public institutions and services in the Commonwealth. The Legislature further finds that §4926 does not conflict with the Federal District Court’s ruling in Kin v. N. Mariana Islands, 3 N.M.I. 608 (D.N.M.I. 1992), because it shall have only prospective application.

Section 4927 is a new section designed to provide for a statutory, rather than regulation-based, entry permit for religious activities. It is the intent of the Legislature to supersede CMNI Immigration Regulation §§5.40.1-625(l) and (m). Any valid permits issued prior to the effective date of this Act shall remain in force until their expiration, unless otherwise prohibited by law. The Committee added this section because of a general consensus that the current framework for entry for religious purposes is inadequate and subject to abuse. The Committee finds that requiring the employing organization to meet minimum legal requirements serves an important state interest of preventing abuse of the religious activity permit process. The Committee feels that, as a matter of diligent security policy, persons entering under this section should be employed by identifiable religious organizations. The Committee in no way wishes to impair the free expression of religious belief by persons or groups present in the Commonwealth, nor does it wish to unduly burden their employment of religious professionals for that purpose.

Section 4931(a) restricts employment of a foreign national worker to one employer. Part time or second jobs are now prohibited. The Committee feels that given the current state of the CNMI’s economy, all possible measures should be taken to promote and encourage the employment of a local workforce.

Section 4931(b) shall supersede the decision of the CNMI Superior Court in Office of the Attorney General v. Xu Wang Zheng, Civil Action 05-0524(E) (2006). Ensuring the prompt and accurate identification of foreign national workers will reduce the strain on labor and immigration resources and protect foreign nationals who are in the Commonwealth legally. The Committee finds that during travel by plane or boat during working hours it is particularly important for foreign national workers to have all appropriate identification in their possession.

Section 4931(c) is in large part a re-enactment of existing law, but does give employers the option, by contract only, to include a termination with notice clause to be used in the event of an increase in the minimum wage. The Committee feels that this is fair to employers who may be caught in unaffordable contracts should the law change.

Sections 4931(g)(1) and 4932 work together to require that every foreign national worker, upon entry to the Commonwealth, shall have a standard level of medical insurance coverage. The Committee finds that when a foreign national worker reaches the appropriate level of compensation, any deduction by the employer for medical insurance premiums is for the primary benefit of the foreign national worker and is consistent with the Fair Labor Standards Act (FLSA). The Committee feels that these amendments are in the best interests of employers, foreign national workers, and the Commonwealth Health Center. The Committee heard testimony about employers who, in the past, have been forced to pay very large amounts in medical expenses for conditions they had no way of detecting and/or preventing. The Committee received numerous comments from the hotel and tourism industry, as well as other industries, on the subject of medical insurance. The task force assisted in developing a replacement for the current medical coverage provision. Above all else, mandatory medical insurance coverage will provide basic healthcare coverage and prevent employers, foreign national workers, and the Commonwealth Center from having to bear the crippling cost of serious medical procedures. It is the intent of this Committee that the medical insurance provisions of this Act be superseded by any employer coverage act or universal health coverage legislation enacted by this or any future legislature.

Section 4931(g)(2) increases the housing deduction an employer may make for upper-income foreign national workers. The Committee finds that this provision is fair and appropriate given the state of private rental market in the Commonwealth. The Committee received comments supporting this provision from the task force members.

Section 4931(l) is a new provision that will require each employer of more than ten employees to submit a manpower plan for increasing the percentage of resident employees in the employer’s workforce.

Section 4932(b) of this Act shall supersede the decision of the Superior Court in American Construction, Inc. v. Salgado, Civil Action No. 95-1043 (1995). By reducing the responsibility of the employer to provide medical coverage to a 60 day period following termination of employment and adopting a more streamlined hearing process, it is the intent of the Committee to provide for the fair and expedient resolution of labor matters and to protect former employers from excessive medical bills due to protracted labor disputes. The Committee feels that efforts have been made to expedite the complaint and hearing process and therefore a corresponding decrease in the medical coverage period is appropriate.

Section 4934 requires an orientation for newly arriving foreign national workers. Informing non-residents early on of their rights and responsibilities is critical to the effort to reduce the frequency of labor abuses, protracted labor disputes, permit revocations, and the loss of legal status. The Committee invites the attendance and input of the federal ombudsman at orientation sessions to ensure the most effective presentation possible. Section 4934 requires the entry permit to be delivered during the orientation session. For too long permits have been issued and given to employers or agents of employers only to become last before reaching the permit-holder. The Committee finds that delivering entry permits directly to the foreign national worker at the time of orientation will ensure: (1) that the worker receives the permit directly, and (2) that the worker attends the session. The Committee finds that employers or their representative should attend the orientations at least two times per year to remain informed of developments in the labor laws. The Committee feels that no foreign national should begin work until they have attended the orientation. The foreign national worker must attend within one week of arrival, unless the Secretary, pursuant to subsection (e) needs to reconfigure the orientation schedule. The sanctions for violation of §4934 are contained in §4964(d). The Committee worked with the Department of Labor and the Office of the Federal Ombudsman in developing this section.

Section 4936 prohibits all transfers, except those granted pursuant to administrative or judicial actions. Consensual and Expiration transfers will no longer be permitted. The Committee finds that this prohibition is necessary because of widespread abuse of the transfer process. The Committee received many comments on this provision. It is the intent of the Committee to end only consensual and expiration transfers and not to interfere with the due process rights of foreign national workers or disallow the use of administrative transfers. The Committee received comments from the Office of the Attorney General on this issue and was diligent in addressing due process concerns. The Committee does not intend to limit due process rights provided under the U.S. and CNMI Constitutions.

Section 4937 requires large employers to give notice of reductions in force and offers a strong disincentive to hiring workers just prior to reducing force. The Committee finds that this provision is consistent with H.B. 15-131, now pending in the Legislature, but should be superseded should 15-131 become law.

Section 4938 will place employers and foreign national workers on notice of their legal rights and responsibilities and require mediation in appropriate circumstances.

Section 4939 shall supersede 3 CMC §4442, as overruled in Gorromeo v. Zachares, Civil Action No. 99-0018 (D.N.Mar.I 2000) and re-enacted through Public Law 14-84 (2005). The Committee finds that §4939 this Act fairly balances the need for health and safety inspections of worksites employing foreign national workers with the privacy rights of employers and employees in the Commonwealth.

Article 4 of Chapter 6 clarifies the administrative hearing process for foreign national workers. The section replaces the current 3 CMC §§4441and 4444-4446 with a more detailed model. Section 4943 clarifies the mediation requirement. The Committee has attempted to amend Article 4 to expedite and streamline the hearing process in order to more expeditiously resolve labor complaints.

Section 4951 under Article 5 is intended to protect foreign national workers who, during a contract term, must leave the Commonwealth for personal, medical, or other reasons from suffering from adverse actions to their immigration or employment status while they are absent. The Department should develop a user-friendly system for notification that is not unduly burdensome on employers or foreign national workers.

Section 4953 imposes periodic exit requirements (6 consecutive month absence in every 54 month period) for foreign national workers that are similar, though not identical, to the periodic exit requirements of United States law which generally require a one year absence after two consecutive 3 year periods. See, e.g., 8 CFR 214.2(h)(13)(iii). Exemptions are provided for professional and executive positions and for domestic helpers.

Section 4956 permits the Division of Immigration to develop a re-entry program for those foreign national workers who have pending administrative or judicial actions in the CNMI. This provision is enacted to ensure that foreign national workers receive adequate due process in pursuing violations of this Act and other Commonwealth and U.S. law. The Committee recognizes that it may not grant powers or limitations to the U.S. District Court; however, the Committee finds that the time requirements of the section should be interpreted as subordinate to an order of the federal court or agency in a civil or criminal proceeding.

Section 4961 is a clarification of the former 3 CMC §4424, which established accounts for the proceeds of the “Commonwealth Non-Resident Worker Fee Fund.” The recipients and distribution have been clarified and the section now expressly does not replace or remove the fee imposed under 3 CMC §4347. Proceeds from that provision should continue to go to the Deportation Fund.

Section 4962 limits the effect of foreign national worker status vis-à-vis citizenship, naturalization, or permanent residence. The section also limits the amount of time in which a foreign national worker may file a complaint to one year, unless the actionable event was not immediately discoverable. In such cases the foreign national worker shall have one year from discovery (based on reasonable diligence) to file.

Section 4963(a) of the Act is intended to end the practice of foreign national workers (formerly non-resident workers) entering the Commonwealth under the Non-Resident Workers Act and then starting businesses in the Commonwealth. The Committee finds that the intent of this Act is to regulate foreign national employees, not foreign national business owners, investors, or employers. To this end, the new Act precludes the use of this Act for entry for business owners, investors, and employers. Such persons will need to qualify for entry under other provisions of Commonwealth law, e.g. as a Foreign Investor (See Chapter 9 of Division 5 of Title 4 of the Commonwealth Code.) The Committee finds, however, that under current 3 CMC §4437(h), the provision that the new 3 CMC §4963(a) replaces, workers who first entered the CNMI for employment purposes prior to July 28, 1987, were permitted to have a financial interest in, operate, or engage in business, or become employers. For this reason, this Act, pursuant to §4963(a), is intended to allow a transition period for those foreign nationals to convert their status to foreign investors or other entry status. The Committee finds that the Department of Labor should, in consultation with the Department of Commerce, develop a five year transition plan to achieve this objective. The Committee finds that §4963(a)(2) should expire and automatically repeal two years from the effective date of the Act.

Subsection (b) requires all foreign national workers to be at least 18 years of age.

Subsection (c) requires employers to be financially capable of employing foreign national workers.

Subsection (e) prohibits a foreign national worker from beginning work until he has received an entry permit at an orientation session.

Subsection (g) bars “pre-employment” relationships.

Subsection (m) allows, upon approval of Secretary in consultation with the Attorney General, to permit tourists to work in very limited circumstances involving human trafficking cases or other court proceedings.

Subsection (n) bars “sponsorship” arrangements.

Subsection (o) bars related companies of a debarred employer from hiring foreign nationals.

Section 4964 updates and clarifies sanction and penalty provisions for violations of the Act. Subsection (l) allows the Division of Revenue and Taxation to deduct from an employer’s NMTIT rebate for failure to pay repatriation costs.

SECTION 5 is a global amendment to ensure consistency throughout the Code.

SECTION 6 of the Bill amends the current 4 CMC §5941 Long term business certificate; conditions provision. The Committee feels that it is important to include the Departments of Labor and Public Health in the coverage of the bond so that employers do not reclaim bond funds prior to settling repatriation and medical obligations.

SECTION 9 provides for the effective date to be January 1, 2008, and restricts the Act to prospective application.


Several Important Aspects of H.B. 15-38, CS 1

The Act will fully repeal Public Law 11-33 (Limited Immunity for Illegal Aliens), codified as Chapter 5 of Division 4 of Title 3 of the Commonwealth Code (3 CMC §§4501-4507), and Public Law 11-66 (Non-Resident Compensation and Repatriation), codified as Chapter 7 of Division 4 of Title 3 of the Commonwealth Code (3 CMC §4701-4704). The Committee finds that these two provisions of law have run their effective course and no longer adequately meet the demands of the foreign national labor force in the Commonwealth.

It is the intent of the Committee that this Act shall not conflict with Chapter 5 of Part 1 of Division 1 of Title 6 of the Commonwealth Code (Human Trafficking and Related Offenses). This Act shall in no way limit the authority of the Commonwealth to bring an action pursuant to that chapter. The Committee referenced the Human Trafficking and Related Offense Act in the findings of the bill itself to ensure that that provision and this Act do not conflict.

It is the intent of the Committee that the following bills from the Fifteenth Commonwealth Legislature be subsumed in and generally pre-empted by this Act: House Bills 15-24, 15-46, 15-93, 15-107, 15-167, 15-182, and 15-232, and Senate Bills 15-2 and 15-65.

The Committee intends for this Act to be consistent with the decisions of the 9th Circuit Court of Appeals and the District Court of the Northern Mariana Islands in Sagana v. Tenorio, No. 03-15779 (9th Cir. 2004), and Kei v. Amer. Int. Knitters Corp. 789 F.Supp. 1074 (D.N.M.I. 1992).

6 comments:

Saipan Writer said...

Thanks.

bradinthesand said...

i just like the fish with the light sabre (hafta spell it this way if you're from buffalo).

marianas life said...

wow, thanks for that, helps to clarify some things. what would be nice if they required medical documentation of being clear of TB prior to entry. It is endemic here because so many foreign nationals are from countries with rampant TB. A simple skin test and chest x-ray would work with the application.

Carolina said...

lol. thanks for correcting henry chan. the less false information, the better.

Anonymous said...

wouldn't it be nice if all bills that were introduced were given as much public exposure, like say the poor attempt at an oga bill that just passed the house.

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