A response that gives no answer

Q. There is an ongoing debate on House Bill 14-142 named Alien Workers Act of 2004. I would like to ask for your comment on this proposed bill and in particular what would be its impact on small business employers should it go through in its present form?

A. In my view, the main thrust of the H.B. 14-142, among others, is on the following two matters. First, “It is the intent of this Act to prohibit the transfer of alien workers from one employer to another, and that the employer of record shall repatriate the alien worker from the point of hire. It is also the intent of the Act to prohibit the alien worker from working for more than one employer.” Second, “It is the intent of this Act to provide stricter enforcement, control and regulation of alien workers. It is further the intent of this Act to require resident workers to be at least 10 percent of every employer’s management, supervisory and non-supervisory work force, which is to be increased at least 2 percent annually so that at the end of the five years resident workers comprise at least 20 percent of every employer’s management, supervisory, non-supervisory work force, to control the issuance of temporary work permits, to increase the job referral services provided to residents.”

As everyone in the CNMI knows, we are going through a period of declining economic activity whose turnaround is not in sight yet. More and more businesses are closing their doors and in particular the smaller ones. On the one hand, prohibiting the transfer of workers closes the safety valve on the ability to reduce losses of a failing business and on the other side opportunity for another employer to hire a worker without incurring off-island hiring expenses and going through months of work permit processing time. Socio-economic wisdom calls for bringing in the fewest possible alien workers and maximizing their use. The proposal to not allow them to work for more than one employer is a measure contrary to this principle.

In regards to the second focal point, the bill says, “The legislature finds that specific data regarding job category needs, availability of resident labor, in particular employment categories, and impact of apprentice training programs, is currently minimal,” yet it goes ahead and mandates hiring of resident workers starting from 10 percent and increasing it by 2 percent annually in almost all categories of employment. In my observation this requirement is unrealistic given the inadequate supply of resident workers to satisfy this mandate at the current level of economic activity, let alone our desire to expand it further. For the specific categories such as janitors, security guards, and custodians this bill proposes a minimum of 50 percent hiring of residents. I’m not sure how such a high proportion of requirement was arrived at that such job categories require more residents.

As for the small employers, this bill proposes, “Employers employing less than five but more than one employee shall employ at least one full-time resident worker.” It means all small business employers who employ 4, 3, or 2 employees would be required to have 25 percent, 33 percent, or 50 percent resident workers, respectively. There is no rationale given for setting this high proportion for the small employer while the bigger employers would reach a maximum of 20 percent at the end of five years after the enactment of this bill. I am glad that you asked this question on behalf of the small businesses because the impact or repercussion of this bill may have received little or no attention from the point of view of small employers. During the public hearing of the Legislature on Saipan, the Hotel Association, Saipan Chamber of Commerce, and other special interest groups gave their input but I don’t think anyone representing small employers gave any comment.

Finally, this bill is 34 pages long and writing a comprehensive analysis would probably require twice as many pages. While the intent of the bill may be to serve the social and economic needs of the people of CNMI, it falls far short in adequately addressing them.

(Ashraf is an International Resource Economist. He is solely responsible for the views expressed in this column and doesn’t represent the views of Saipan Tribune. His email address is ashmdr@hotmail.com)