Labor uncovers sponsorship arrangement

The Department of Labor has uncovered an unlawful sponsorship deal after an alien worker disclosed he had worked only “one day” of his first year of employment on Saipan.

Labor also discovered that the worker, Kwang Qing, was unable to identify his employer or the location of his employment.

Labor administrative hearing officer Jerry Cody ruled that Qing’s admission indicates the arrangement is an unlawful “sponsorship.”

“Fraud is a serious matter that warrants imposing substantial penalties,” said Cody in an administrative order issued Tuesday.

The hearing officer affirmed the Labor director’s decision to deny Kwang Qing Corp.’s permit application to employ Kwang Qing. Cody denied Kwang Qing’s request for transfer relief and ordered him to depart the CNMI within 20 days.

Kwang Qing’s last employer on record, Kwang Qing Corp. was directed to provide Kwang Qing’s repatriation ticket.

Cody recommended that the Labor director commence an agency case against the corporation’s manager, Kwang Yong Nian, for his apparent involvement in a scheme to obtain a fraudulent work permit for Kwang Qing to enter the CNMI.

Kwang Qing Corp. operates an Internet café called CK Internet in Chalan Kanoa. The corporation employs four foreign national workers. Majority of the corporation’s officers are based in China.

Kwang Qing is the grandson of the corporation’s president and son of its manager, Kwang Yong Nian.

On Oct. 25, 2007, the corporation submitted a permit transfer application to employ Kwang Qing as a commercial cleaner. Labor approved a conditional grant of transfer on the same day.

On March 10, 2008, Labor denied the application, stating that the employer’s income did not justify the hiring.

The corporation and Kwang Qing appealed.

At the administrative hearing, the manager produced Business Gross Revenue Tax records for the first and second quarters of 2008.

The records showed that the company’s 2008 earnings ($16,820 and $14,100 for the first and second quarters) were sufficient to pay wages for four employees, including Kwang Qing.

In his order, Cody said further questioning of manager Kwan Nian revealed serious irregularities with the business.

Cody said the manager testified that receipts were issued to customers for only large purchases and even then, only to customers who requested a receipt.

The manager also testified that he kept employer’s accounts receivables in his possession rather than depositing them in a bank.

The Labor director noted that this combination of factors—conducting sales without receipts and failing to regularly deposit revenue in a bank—made the BGRT figures impossible to verify and inherently suspect.

In effect, the manager could assert that he received any amount of revenue, as it is impossible to verify how much was actually received.

Cody discovered other problems in reviewing the application.

He noted that the manager testified that this small business employs one manager, two supervisors and a commercial cleaner.

However, Cody said, Kwang Qing testified that he does not work as commercial cleaner but as a computer attendant, helping customers at the Internet café.

Cody said this establishes that the position of commercial cleaner is not actually being used and thus, “is not needed for this small business.”

The hearing officer noted further that particular suspicion was raised regarding Kwang Qing’s work history when he could not furnish the name of his last employer of record or even identify where the employment took place.

Cody said Kwang Qing’s work permit was arranged by his father, Kwang Nian, while Kwang Qing was still in China.

Cody said Kwang Nian arranged for the work permit through a “friend,” who was not identified at the hearing.

The hearing officer established that it is clear from Kwang Qing’s testimony that no actual employment occurred.

Instead, Cody said, after entering the CNMI under a procured work permit, Kwang Qing spent the rest of the year studying English at the Northern Marianas College.

Cody agreed with the Labor director’s position that transfer relief should be denied to Kwang Qing based on his fraudulent conduct in entering the CNMI and remaining for a year under an unlawful “sponsorship.”

“The fact that this worker benefited from such a fraudulent scheme should be weighed against him with respect to his equitable claim for transfer relief,” he said.