Closure of business

Q: Does the closure of an employer’s business constitute valid grounds to terminate the alien workers’ employment contracts?

A: Yes, but the employer must follow proper procedures in doing so. The Department of Labor’s administrative hearing office, in the case against the defunct Elephant Corp., clearly explained the procedure. An employer who knows that his or her business is about to close has a duty to give advance written notice of the closure to the Labor director and the employees.

The employer must pay the employees their back wages owed, plus wages for the advance notice period. The notice should state that the employer intends to close his business and terminate his workers’ employment as of a certain date in the future.

The amount of prior notice required is specified as a certain number of days, stated in the standard employment contract. The Labor director should review the closure to determine whether to approve it. Once approval is given, the Department of Labor can arrange for repatriation of the affected workers.

If the employer does not follow the proper procedures by just closing his or her business and departing from the Commonwealth, this would result in sanctions against the employer. The insurance companies, as sureties for the employer, would then end up obligated to pay the wage awards to the abandoned workers.

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Q: If an alien worker submits a request to Labor for consensual transfer, is that already an official transfer?

A: No. The consensual transfer is considered official only after the Labor director approves the grant of transfer. Labor has also been strict regarding scheduling for consensual transfer customers. If the customers fail to show up on time, Labor would require them to reschedule the interview to the next available date and time.

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Q: After an alien’s working hours, what are the two restrictions that he or she can’t do?

A: 1. He or she cannot work for another employer. 2. He or she cannot operate his or her own business.

Submit questions on labor issues to Saipan Tribune via e-mail at editor@saipantribune.com, or by calling 235-6397, 235-2440, or 235-8747 and leaving a message at Ext. 133 or 141. You may also submit questions in person by writing it down and dropping it off at the Saipan Tribune’s office on the second floor of the Century Insurance Building on Beach Road, Garapan.