‘Touchback’ rule worries employers

Editor’s Note: This is part of a series of special reports that Saipan Tribune will be featuring every Friday this month, focusing on the “touchback” provision. The series will examine the rule’s impact on employers, affected workers, and the CNMI economy.

Part I

Manpower agency EFG Pacific Holdings LLC stands to lose half of the workers it supplies to many businesses in the CNMI by the start of the next fiscal year when the touchback rule comes into effect.

EFG Pacific Holdings LLC owner Eden Ordas said that Oct. 1, 2023, will be a “challenging time” for CNMI businesses that employ CNMI-Only Transitional Workers who have to exit the islands because of U.S. Citizenship in Immigration Services’ touchback requirement.

Under the rule, foreign workers with “CW” work visas must leave the CNMI for at least 30 days after two renewals of their CW-1 visa classification.

“The touchback rule is a very big challenge for me as a manpower agency. I believe that 50% of my total manpower agency will be affected,” said Ordas, who employs around 200 workers.

Workers of Hong Ye Construction work on the sewerline along Beach Road in front of Joeten Center Building 1 in Susupe. (MARK RABAGO)

EFG Pacific Holdings is a lynchpin of many businesses in the CNMI that uses CW workers; the manpower agency supplies cooks, waitstaff, bartenders, bakers, general repair and maintenance staff, among others to various industries in the CNMI.

“Companies hiring CWs are in a bind because they can’t really play the waiting game. In the case of the touchback rule, you can’t petition affected CWs until they’ve exited the CNMI for 30 days,” said Ordas.

And don’t expect the touchback CW worker to be back on the islands soon.

“In our own experience, there are some instances where CW permits were approved relatively quickly, but there are some instances where almost a year or even more than a year has passed and the CW permits haven’t been approved yet,” she added.

Aside from the challenges the touchback rule will have on the local economy, she said the requirement will also exact irreparable harm to affected CW workers themselves.

“They’re very much worried because they’re not ready to go home because they don’t have much savings. At the same time, what will they do back in their home countries? There’s just a lot of uncertainties,” said Ordas.

P&A Corp. general manager Doyi Kim also has had sleepless nights worrying about the touchback rule since more than 20 of her company’s staff will be affected by the requirement.  She’s hopeful that Delegate Gregorio Kilili C. Sablan (D-MP) will be successful in his plans to pass a bill delaying its implementation by two to three years.

“There might be some reasons. But I think we can do something about it [delay on touchback rule]. …We still need CW workers and we can probably make some better rules. …I agree that we need to control outside workers but [we’re not ready for the touchback rule]. …It’s not really easy to say because I don’t have any alternatives,” she told Saipan Tribune.

If the requirement pushes through this year, P&A Corp. will be losing IT specialists, maintenance staff, and most of their housekeeping staff, Kim said.

To steel themselves for the eventuality of the touchback rule, she said her company has been hiring new employees lately.

“We’ve been preparing since two years ago. We hired some new CWs and we’re trying to search from the local worker pool. I am interviewing as much as possible but I am very worried because most of the employees [that will have to leave] are the most important ones for the company,” said Kim, who admits she prefers hiring direct employees rather than relying on manpower agencies.

Currently, P&A Corp. is looking for electrical engineers and construction engineers. It operates CK Smokehouse, Marianas Meat Harvesting Co., International Roller Skates, among other businesses on Saipan.

Lindsey Ahn, the corporate social responsibility manager for E-Land Group, said the company that owns Kensington Hotel Saipan, Coral Ocean Resort Saipan, and Pacific Islands Club Saipan shares local businesses’ collective angst with the upcoming implementation of the touchback rule.

“Same as other companies, we are affected by the touchback issue. We are already trying to send some employees back to their home countries step by step to avoid the big shock coming this October,” she said.

Chow Time owner Anna Liza Alcantara admits she tears up whenever she thinks about the touchback rule as three of her employees will be affected.

“They’re all sad because they have families to feed and children they send to school in their home countries.”

Aside from the future of her staff and their families, she’s also worried about what will happen to the CNMI.

“It’s not reasonable because if all of your staff is affected by touchback what will you do? Will you just close your company? Also, how will the government make up [for] the taxes companies pay when these companies are no longer operating because they have to close down due to the lack of staff?” asked Alcantara, who supports Sablan’s bill to delay the touchback rule.

The owner of a company that operates a wholesale and grocery store on Saipan, who wants to remain anonymous, said the touchback rule is a significant concern for his business.

“Our CW-1 workers are skilled and essential to our daily operations, and their departure could create a significant gap in our workforce.”

The businessman also believes that Sablan’s bill to postpone the touchback provision only kicks the can down the road and would just be a Band-Aid solution for the CNMI’s labor woes.

“Some employers may support the bill as it would provide more time to prepare and transition to the new labor market conditions, while others may oppose it, seeing it as a delay that would not address the underlying issues of the touchback policy. Ultimately, the decision on the touchback policy and any proposed bills will be up to the relevant authorities and policymakers.”

He, however, is hopeful that both the CNMI government and USCIS will take into account the implications of the touchback policy on small businesses and offer assistance to minimize its unfavorable consequences.

“To address this matter, one feasible resolution is to introduce something similar to the H.R. 560, which grants a CNMI-Only permanent residency pathway to CW-1 workers who have been in the CNMI for an extended period and have established roots. It is crucial to also include those who are not qualified with the H.R. 560 and other newly arrived CWs affected by the touchback rule and provide them with CNMI long-term residency,” he said.

This would ensure stability and certainty for both workers and businesses and aid in alleviating the labor shortage effects caused by the touchback policy, according to the unnamed businessman.

Saipan Chamber of Commerce president Joe Guerrero, during his presentation in the recent Economic Forum, batted for a more sensible approach to solving the CNMI’s labor problems.

“The Chamber is pro-CNMI labor and we should have a pro-CNMI pro labor policy that builds up our local workforce.”

While he supports efforts by the Northern Marianas College and the Northern Marianas Technical Institute as well as the Department of Labor to grow the local workforce, Guerrero acknowledges that the CNMI continues to need foreign workers.

“Our policy should include, and we should not ignore, that we do need a nonimmigrant worker program that is sensible and effective for growth, one that has local input and perhaps co-managed by the CNMI government rather than a one-sided program determined by the federal government. Unless we resolve our labor situation, it’s doubtful that we will ever achieve meaningful economic progress in the next few years,” said Guerrero.

At the same Economic Forum, Hotel Association of the NMI chair Ivan Quichocho called for the repeal of the CW touchback provision. He added that the CW cap that reduces worker numbers every year, coupled with the emigration of the local population, “constrains the local labor market and economy.”

Workers advocate Malou Berueco said before the touchback rule is fully implemented, USCIS should consider long-term CW workers who have toiled in the CNMI even before the COVID-19 pandemic hit local shores.

She said if USCIS considers CW workers who have been here before March 2020, the numbers of the workforce affected by the touchback rule will be drastically reduced, which is a win-win for both CWs affected by the requirement and local businesses.

“The mere fact that up to now many CW workers affected by the touchback are still here even during the pandemic means they’re the ultimate survivors,” said Bereuco.

Ordas also pointed out a potential humanitarian crisis if the touchback rule is implemented as the requirement will actually be separating families.

“Since 2015 or 2016 when this touchback rule was enacted, a lot of CWs on Saipan have had children in the CNMI who are U.S. citizens. So, tell me what will happen to these U.S. citizen minor children when their parents have to leave the CNMI because of the touchback rule? Do they have to bring their kids back home because obviously they can’t leave them here because they’re minors.”