ARCHIVE of Management Report for 2007

LATEST RULES AND INFO ON H-visas is available at http://www.ecouncil.org/04-01.htm

ASC and Rev&Tax have discovered that many Guam companies are out of compliance with the tax laws that relate to retirement plans and they can be facing past due taxes, interest and penalties in the tens of thousands of dollars per plan! What you need to do SOON...

GOOD NEWS -- The Internal Revenue Service has increased the mileage rates for computing the deductible costs of operating an automobile for business through December 31, 2008.  

The IRS mileage rate for business use of a vehicle, including cars, vans, pickup trucks and panel trucks is now 58.5 cents per mile as of July 1, 2008.  The new rate is eight cents per mile higher than the 50.5 cents per mile rate that was used for the first half of this year.   

Click here for more information on the standard mileage rate.

KEIDANREN is concerned that the Doha Round of World Trade Organization negotiations are in trouble. The Doha Development Round commenced at Doha, Qatar in November, 2001.  The objective of these talks is to lower trade barriers around the world, permitting free trade between countries of varying prosperity. Of os June, 2008, talks have stalled over a divide between the developed nations led by the EU, the US and Japan and the major developing countries (represented by the G20 developing nations, represented mainly by Indias, Brazil, China and South Africa. 

Political analyst Karl Rove, who served as deputy chief of staff to President Bush from 2001 to 2007, spoke before members of the Associated Builders and Contractors during the association’s 2008 Legislative Conference in Washington, D.C.  

Rove addressed key ABC issues, including the upcoming elections, the Employee Free Choice Act, and immigration and health care reform. He reminded the audience that winning key congressional races is important in helping defeat card-check legislation.  

“To block card-check, we need 40 solid votes in the U.S. Senate,” he said, also pointing out that there are 29 open Republican seats in the U.S. House of Representatives.  “It’s a reminder of how much your efforts matter,” Rove said. “Organization and an enthusiastic effort at the local level can get these votes. What you do will have a big impact this fall.”  

Rove ended his remarks by expressing appreciation for ABC members who are willing to stand up for the merit shop philosophy in the political arena, saying, “Thanks for doing what you do.”

Hawaii-based agents for the plumbers union and the carpenters union have been visiting local construction companies and Democrats in the Guam Legislature. We hear the plumbers union has a proposal to help Guam Community College expand apprentice training with money and instructors and union salesmen.

Their visits to the Democrats probably included discussions about repeal of Guam's "right-to-work" law and possible enactment of a measure that would eliminate the right of employees to a secret-ballot election when deciding when a group of employees are deciding "yes" or "no" about joining a union.

All unions are pushing this kind of law that would end more than 70 years of precedent established under the National Labor Relations Act (NLRA) of 1935, and it will repeal employees’ freedom to vote on union membership in a federally supervised, secret ballot election when deciding whether or not to join a union. Gibson believes a similar measure is sitting in the desk drawers of Democrats in  the Guam Legislature. 

We've been expecting these people since the announcement of the military build-up and the Marine transfer from Okinawa.

When we pin down some names and titles, we'll post the information here...meantime, if they contact you asking for a meeting, refer them to Jim Martinez at the Guam Contractors Association -- 647-4840, or Bill Gibson at 649-6616. 

1. If they "cold call" or walk in asking to see you, be civil and tell them to call Jim or Bill. Do not accept anything (cards, papers, flyers, etc.) they may want to leave with you.

2. Alert all managers and supervisors to freshen-up your No Solicitation/No Distribution notices and tighten-up enforcement of your policies about access to your employees and your workplace(s). Visit this link: NSND.htm

3. If you hear rumors about union activity at an employer you do business with (or even a competitor), call Bill Gibson so the word can be passed along anonymously.

Saipan employers already have enough to cope with right now, and given the high levels of employee anxiety in the CNMI, the union sales pitch could add even more complications.

We have alerted Carlsmith-Ball attorneys -- Meredith Sayre, Rossi Tolentino and Marcia Schultz -- to polish up their armor, sharpen their swords and be ready for battle once again.

IMPORTANT -- agents for the IBEW Local 1260 (electrical workers union out of Honolulu) have been visiting Guam employers (subcontractors of DZSP) asking for the mailing addresses of their own members. We have cautioned those companies about giving a union the addresses of their employees.

Any union worth the members' dues should already have a mailing list of the members. Union stewards have easy access to worksites and should be able to freshen-up their address files without asking the employer to provide it.  

We continue to hear that large numbers of employees covered by the union contract with the prime contractor DZSP and many of the subs have decided NOT to pay dues. Guam's "right-to-work" law does not apply to employment on federal property, so it looks like many, many employees have made a personal choice not to cooperate with the IBEW.

Last year, this same union makes was asking employers to distribute new dues deduction forms and announcements of dues increases. We consistently advise employers that they have no responsibility to tell union members that their dues are going up. Apparently, the union needs employee addresses so the dues increase notice can be mailed.

The U.S. Chamber of Commerce, taking a page from organized labor's playbook, is trying to marshal its membership to counter labor's influence within the Democratic-controlled Congress and the November elections.

"What we face is a tidal wave of union political spending in 2008, followed by an even bigger wave of legislative action aimed at driving up unionization and workplace regulation," said Steven J. Law, the chamber's chief legal officer and general counsel.

"We are mobilizing our membership across the country to counter this campaign to Europeanize the American work force." 

The Chamber says the nationwide initiative, which it will formally announce Thursday, will borrow from tactics regularly employed by unions, including outreach programs designed to mobilize individuals and local groups throughout the country, media advertisements and efforts to encourage voters to pressure elected officials and the media to take action on certain issues, such as efforts to make it easier for workers to unionize.

The chamber declined to put a price tag on its campaign. "There is nothing new here, this is the same old same old" from the pro-business movement, said Fred Azcarate who heads a workers-rights campaign for the AFL-CIO laboe rederation. 

Among labor's top legislative priorities is passage in Congress of the proposed Employee Free Choice Act, a measure that would allow unions to form after getting a majority of employees to sign a card or petition. The proposal has pitted labor activists and union foes in a fierce lobbying and public-relations campaign during the past few years.

Supporters of the proposal say the card-signing - or "card-check" -- method is more fair than holding a secret-ballot election because it's a simpler, more direct approach for workers to decide whether they want to unionize. Labor adds it would help protect unions from anti-union employers and lawmakers. 

The Chamber and other opponents say the card-check method is undemocratic and would hurt business interests. Card-check legislation failed in Congress last year, but unions are pushing to get the proposal re-introduced. 

The AFL-CIO and its affiliates collectively are expected to spend about $200 million this year on get-out-the-vote campaigns, issue ads and other election-related purposes.

"This definitely will be the biggest grass-roots mobilization we've ever had," Mr. Azcarate said.

Delegate Madeleine Bordallo is NOT to blame

Rep. Henry Waxman (D-CA) and other union stooges in Congress amended the 2009 Defense Authorization Bill (May 22) to extend the Davis-Bacon Act to military construction projects in Guam. 

The U.S. Department of Labor's Wage and Hour Division (WHD) uses methods for calculating Davis-Bacon wages are scientifically unsound. Davis-Bacon rates are calculated using a self-selected sample instead of a statistically random sample. 

The rates usually mirror the wages rates found in union contracts in a given locality -- those numbers are easy to obtain WHD just calls union headquarters...but only a tiny fraction of the construction industry is unionized. The data take years to process and even more years to update, meaning that contractors pay out-of-date wage rates. The survey forms confuse contractors and investigators, and the most recent audit of the WHD found errors in every wage report that it examined.

Unsurprisingly, Davis-Bacon rates bear little correlation to market wages. In many cities, they are below market rates, while in other cities, they are well above market rates. This hurts both workers and taxpayers. A decade of efforts to re-engineer and improve the flawed wage determination process has failed. Rather than allowing the WHD to continue duplicating the work of the Bureau of Labor Statistics, Congress should require the WHD to use BLS wage surveys to calculate prevailing wages.

Read what is wrong with DBA and how to fix it...  

Fight Against ECFA Card Check Gets a Boost!

The Coalition for a Democratic Workplace (CDW) launched a new public awareness campaign aimed at educating voters on the misnamed Employee Free Choice Act, which would take away an employee's right to a private ballot election when choosing to join a union.  As part of this multi-faceted campaign, CDW released a new television ad featuring Vince Curatola, better known as "Johnny Sack" from The Sopranos. The ad is designed to engage and educate voters on this important issue.  This must-see ad can be seen on all national cable news channels or by going to http://www.myprivateballot.com/.

WHEN IS THE NEXT ELECTION? Some members of the GFT who planned to vote in the April election of union officers are asking that question, but they are being told that the union's board of directors decided to move the election from April to February -- during a meeting at which insiders say lacked a quorum. 

Some members have been told that are no records of that board meeting because the hard drive on President Matt Rector's computer has crashed.  Union members who hoped to vote to replace Rector are being told that the election was already held and that Rector won.

We do not recall any of the customary public announcements or publicity about an election of  GFT officers and we're not 100% persuaded that the information coming to us about this is righteous -- it could be leaking from a dissident faction or a few unhappy union members -- but it is very typical of the way union elections tend to be manipulated.

The GFT's organizing efforts have been successful lately...including excursions out into the private sector...but playing games with control of the union could result in a setback. This gets to be emotional stuff.

Perhape the core members of the GFT -- educators -- see the union to be drifting away to organize firefighters, GHURA's insecure Section 8 staff, port employees, employees of federal service contractors and other non-teacher bargaining units; leaving Guam's public school teachers and their problems forgotten and ignored. Their majopr concern: Guam's teachers remain among the worst-paid in the nation! Our public school teachers really NEED a union!

NMI, American Samoa seek delay in wage hike or $30M aid

Gov. Benigno R. Fitial and American Samoa Rep. Eni Faleomavaega have asked the U.S. Congress to either delay the next minimum wage hike or approve $30-million in aid for both jurisdictions.

The governors reiterated their plea for Congress to postpone the next minimum wage increase scheduled for May 25, 2008. They said that a study by the U.S. Department of Labor supports their position. In the CNMI, temporary support could also be given to the visitor industry to help bring new money into the islands.

Fitial and Faleomavaega wrote to Rep. George Miller, a staunch defender of the scheduled increase in the minimum wage. They asked Miller to support legislation that would hold off, or offset, further wage hikes. The minimum wage rates applicable to American Samoa and the CNMI were increased 50 cents an hour in July 2007.  Minimum wages to both jurisdictions will increase by 50 cents until they reach the federal minimum wage of $7.25 an hour.

I WANT TO SEE MY PERSONNEL RECORD -- is a request that ex-employees often make. Employers are not required to allow active or former employees to examine any company files, even the ones you keep about them. You will not be troubled by these requests IF you make it a practice to give all new-hires a folder labelled "EMPLOYMENT RECORD" that has a notice that says:

"This will be your personal employment file. You should keep it in a safe place at home. You will be given a copy of every document or form that we place in our confidential company files. The file already contains a copy of your job application, and copies of documents covering promotions, transfers, pay and benefit changes, commendations, disciplinary actions will be given to you. Put your copy of each document in this file and keep it for your records -- that way you will always have a complete set of your employment records." 

CRACKDOWN ON ILLEGAL WORKERS -- The government plan to crack down on illegal workers could cost employers more than $1 billion a year and legal workers billions in lost wages, a study commissioned by the U.S. Chamber of Commerce says.

Those costs are enough to trigger a federal law that would require the Homeland Security Department to analyze more thoroughly the effect of its proposal, said Richard Belzer, a consultant hired by the chamber to do the study. It was made available to The Associated Press on Thursday.

The department's proposed "no match" rule would require employers to fire workers who can't resolve mismatches between their name and Social Security number. The chamber opposes the proposal.

Belzer's study will be among public comments submitted to the Homeland Security Department on the proposal. The department could adopt the proposal after reviewing the comments. The deadline for comments is Friday.

Social Security sends no-match letters to employers. They often occur because someone is working illegally, but a mismatch can also take place because of typos, misspellings and name changes, among other reasons.

The Homeland Security Department issued average costs for employers based on how many employees they have and what percent might be unauthorized workers. It determined there would not be a heavy cost to employers.

Belzer, a former economist with the Office of Management and Budget, looked at overall costs and multiplied the average costs by the number of employers in each category. He also used the Homeland Security's estimates that 2 percent of legal workers a year would lose their jobs because they can't resolve the Social Security mismatch.

That adds up to between 37,000 to 137,000 unable to get work. Belzer estimated their lost wages would be from $8 billion to $37 billion.

Belzer said the crackdown could cost employers who have to carry out administrative paperwork when their employees are affected. The loss of employees could also affect a company's ability to produce goods.

His cost estimates are based on the department's now -suspended plan to enforce the no-match rule after the government sent 140,000 employers no-match letters, each with about 10 or more names. A U.S. district judge blocked the plan last October after groups opposed to it sued. The department is appealing.

A law in place since 1981 requires agencies to do a comprehensive study of proposed regulations if the cost exceeds $100 million, said Belzer, an independent consultant.

"This is 10 times that," Belzer said. "They haven't done the level of analysis that for almost 30 years would be commonplace."

Russ Knocke, the department's spokesman, said while he is "not shy to talk about the virtues of no-match, it's difficult to talk about something I have not seen."

HAWAII GOVERNOR VETOS "FAIR CHOICE" BILL -- Governor Linda Lingle  has vetoed a bill that would authorize the Hawaii Labor Relations Board to recognize union representation when a majority of workers simply sign union cards -- an alternative to traditional secret-ballot union elections.

Lingle called the practice a "poor substitute for the secret ballot and is ripe for abuse." The Hawaii bill is similar to the mis-named "Employee Free Choice Act" now before Congress.  The Hawaii bill would not apply to employees covered by National Labor Relations Board rules, so it would be limited mostly to workers at small businesses and agricultural operations.

The Hawaii Chamber of Commerce and other business interests opposed the bill, while the International Longshore and Warehouse Union and other union interests back the proposal.  The bill passed both the Hawaii House and Senate with more than the two-thirds' majorities needed to override a veto. House and Senate leaders will decide soon whether to try to override. We are awaiting introduction of a similar measure in the Guam Legislature. 

EMPLOYEE ABSENCE AND TARDINESS -- This website has a number of files that are consistently in our "top 5" downloads...our file on absenteeism/tardiness is always in the top 5. We have added to absent_tardy -- because this problem involves actual MONEY in significant amounts...it now contains some tips that will save time, money and morale. 

Japan must confront the real Threats posed by its declining Birthrate

Tomijiro MORITA
Vice Chairman, Nippon Keidanren
Chairman of the Board, The Dai-ichi Mutual Life Insurance

Japanese stock markets have experienced sharp declines since the start of the year. The subprime loan problem in the United States has been one of the main factors in this, but it is far from being the sole reason. Before the subprime loan debacle broke out, many observers had noted the fragility of economic growth in Japan and its over-dependence on exports. Japanese share prices plunged by 11% on a year-on-year basis in 2007: a solitary decline among stock markets worldwide. Revisions to Japan's

Japan laws cast further major shadows over its economy last year, restricting housing and capital investment, and leading to a downturn in an already weak domestic demand. As a result, real economic growth for fiscal 2007 is set to decline sharply to around 1.6% from 2.4% in 2006.

Weaknesses in Japan's domestic demand in 2007 would have been unquestionable, even without the subprime loan crisis or revisions to the building code. These weaknesses appear to be a fundamental factor in Japan's inability to shake off deflation, despite the fact that Japan has sustained growth since February 2002. Along with the subprime loan crisis, the structural problem of stagnant domestic demand in Japan has destabilized the stock market and triggered fluctuations in interest and exchange rates. Japan's declining birthrate is the most important cause of its sluggish domestic demand. Its working-age population began to fall in 1996 and as soon as the following year, 1997, net sales achieved by department stores and supermarkets nationwide began to fall on a year-on-year basis (figures based on existing stores). Net sales for daily necessities such as foods and beverages also slowed and domestic sales of new cars declined. As this and other data suggests, personal consumption in Japan continues to face downward pressure. As the decline in the working-age population gains speed, this trend is set to increase. Entire report...

Guam Resort Settles Sex Harrassment Lawsuit
Pacific News Center March 26, 2008

Leo Palace Resort has settled a two year old lawsuit filed by three female employees. The company has agreed to pay the women $243,000 in damages and attorney fees in a "same sex" complaint against a female co-worker.

The three women charged that they were constantly subjected to sexually explicit harassment by another female employee who engaged in sexually explicit behavior such as rolling up towels or balloons to simulate a male body part. The women said the co-worker grabbed, groped and rubbed against them on occasions.

The settlement requires the hotel to provide annual training on preventing harassment, revising its policies on discrimination and semi-annual reports to the EEOC.

One of the victims, Rose Taimanglo said, "The settlement is a message to everyone that such cases can be won no matter how big the company you are fighting against is."

The Employers Council has a training and policy package that will keep this from creating problems in your workplace. Call 649-6616 and book it now.  

TEACHERS UNION WINS ELECTION FOR ROME RESEARCH EMPLOYEES -- 

A majority of employees of Rome Research, a federal contractor, voted YES to be represented by the union. The was conducted by Guam-based agents of the U.S. Department of Labor substituting for the National Labor Relations Board (NLRB) at Rome's work site at NCTAMS.  Rome Research is the second private employer where employees are represented by the teachers union in Guam.

Rome Research Corporation is a subsidiary of PAR Technology Corp. The company has numerous federal contracts for facilities operation and maintenance. Rome provides technical, logistical, and management service. 

 NEW-HIRE REPORTING -- You are going to be hearing a lot more about a federal/Guam program that requires employers to report newly-hired employees to the Child Support Enforcement (CSE) or Family Division of the Attorney General’s Office. Federal officials recently visited Guam to help the AG's office beef up the program.

Guam's CSE matches the names of new hires against their child support records to locate parents, establish a child support order, or enforce an existing order.

The goal of the program is to locate parents (usually fathers) who do not meet their legal and moral obligations to provide for their children. There are only minor costs to employers. They simply send info from the news employee's W-4 form to the CSE units at the AG's office -- when there is a match, employers must withhold child support payments from the paycheck and send the money to the CSE.

There are federal penaltie$ for employers who do not report new hires, or conspire with new employees by working these irresponsible flakes "off the books" and paying wages in untaxes cash.

This program has significantly increased child support collections, cut welfare expenditures, and saved millions of dollars in Medicaid, Food Stamps and phony unemployment claims.

More on this program...

In case you think 2009 is going to be great for business, consider this: both houses of Congress have endorsed the idea of tax increases for millions of Americans as Democrats pressed ahead with budget plans that would allow some or all of President Bush's reductions to die after he leaves office.

Not a worry for you? Watch the polls. Congress' annual budget debate involves a non-binding resolution that sets the stage for later bills affecting taxes, benefit programs like Medicare, and the annual appropriations bills. Congress rarely tackles difficult budget issues as elections loom.

The first year of an administration is typically when heavy lifting on the budget is done, but all of the campaign plans promise more than they can deliver. McCain's tax cuts would require applying a meat cleaver to spending. Clinton and Obama promise spending that will increase the deficit or require large tax increases.

In Guam, we must pray that Congress does not re-think plans to realign America's defense posture in Asia.

FedEx-cess: Inviting In the Big, Bad Government Wolf

By Chuck Muth 3/16/2008

We all know a few bad apples can spoil the whole barrel. And never is this saying truer than when it comes to a rogue company or industry abusing its privileges, thereby inviting the government to stick its nose even further into the business of business.

Think Enron, and the resulting compliance nightmare known as Sarbanes-Oxley. Or just ponder the red-tape regulation-palooza headed the mortgage industry’s way this year.

Which is why the nation’s self-employed independent contractors need to be aware of the dangerous line FedEx is walking these days. The regulatory wolf rabidly believes that when it comes to imposing new controls on American businesses, it absolutely, positively has to be there overnight. And FedEx is inviting inside the hairy one with big fangs.

At issue is the difference between being a self-employed independent contractor and a company employee. Generally speaking, independent contractors perform various services for various people. Employees work directly for one company.

Independent contractors pay their own taxes and provide for their own benefits, such as health insurance and retirement. Employees have taxes deducted from their paychecks and receive unemployment benefits and workers comp.

Employees cost a company more money because of this, which is why many companies choose to outsource certain services to independent contractors.

For example, a business might contract out grounds-keeping to an independent lawn care service rather than hire a full-time gardener. The independent lawn care owner, providing his services to various businesses, is self-employed; the full-time gardener is an employee.

The government, especially the IRS, doesn’t much like independent contractors. If they had their way, every worker would be designated an “employee,” thus falling under more of their direct control and scrutiny.

For their part, independent contractors don’t much like government. They prefer to be, um, independent. Which is why an abuse of the independent contractor option by FedEx should be of grave concern to all true independent contractors.

At the heart of this matter is FedEx’s claim that its delivery drivers are independent contractors and not employees. This claim seems laughable on its face, even for those who aren’t familiar with the “official” definition of independent contractors.

Let’s face it, the drivers drive FedEx trucks, wear FedEx uniforms and identify themselves as FedEx representatives. I mean, come on. If it walks like a duck and quacks like a duck, it’s not a gorilla, right?

But beyond this common sense surface observation, let’s look at some of what the IRS says constitutes an employee relationship, as outlined in its infamous “20 Factor Test.”

-- Does the company direct when, where and how work is done?
-- Are workers subjected to company-provided training?
-- Are the workers’ services integrated into business operations?
-- Is there a continuing relationship between the company and the worker?
-- Are the workers hours or days of work dictated by the company?
-- Is it full-time work?
-- Does the company require the work to be done in a specific order or sequence?
-- Is the worker required to provide regular written or oral reports?
-- Does the worker use company-provided equipment, tools, and materials?
-- Does the worker provide services for several unrelated companies?
-- Does the company enjoy a unilateral right to discharge a worker?

As the IRS states, “You don’t need to have all the factors in your favor to be able to treat a worker as an independent, but you are more likely to pass the common law test if the more important factors point to independence.” Unfortunately for FedEx, the Second Court of Appeals for the State of California ruled last year that FedEx failed the 20 Factor Test miserably.

Let’s just look at one, simple example here. The IRS says your worker “is probably an employee if you require him or her to follow instructions on when, where and how work is to be done.”

The IRS further states that if a company determines “what gets done when, it indicates you control how the work is performed.” And the IRS considers this is “a very important factor” in determining if a worker is an employee or an independent contractor.

So let’s say FedEx promises to deliver your package by 10 a.m. on Wednesday morning. Can the FedEx driver wearing the FedEx uniform in the FedEx truck deliver your package at 3 p.m. on Thursday? Or even at noon on Wednesday? Of course not. The driver has no such flexibility, or, dare we say it, “independence.”

There’s more. Much more. Which I’ll detail in a follow-up column to this one. But for now, here’s the bottom line:

A California court ruled that FedEx drivers are employees, not independent contractors. The Appeals court said “the drivers look like FedEx employees, act like FedEx employees, are paid like FedEx employees, and receive many employee benefits.”

Putting it in layman’s terms, otherwise known as plain English, the Court concluded “that if it looks like a duck, walks like a duck, swims like a duck, and quacks like a duck, it is a duck.” Now where have I heard that before?

Or putting it even more plainly, the Appeals court stated flatly, “We affirm the finding that the drivers are employees.” Period. And if FedEx continues trying to call a duck a gorilla, it will endanger the rights and prerogatives of all legitimate independent contractors.

This is not to say I agree with the government’s position on this issue. In my opinion, every worker should have the right to freely enter into whatever kind of employment relationship the worker and the employer deem acceptable to both parties with no government intrusion whatsoever.

But the reality is that Big Brother already has its hooks in the employment market and there are those in Congress who would like to further put the squeeze on independent contractors.

FedEx’s abuse of the independent contractor provision will only add fuel to the regulatory fire. They should cut their losses and change their employment practices before the big, bad wolf comes for the rest of us.

One IRS agent who has investigated some of the abuse of the independent contractor classification on Guam, reports that several construction companies say they don’t have employees, only contract labor.

Some service companies do the same thing.  The Muth article was trying to discuss legitimate small businesses providing services under contract such as lawn care.  Where it becomes problematic for “contract labor” is the invisible costs to the taxpayers.

He cited some of the reasons outlaw employers use the independent contractor classiification system:  a) the income tax withholding will not be taken out and/or the employee will under-report gross income for tax purposes;

b) as a contractor they would be required to have a business license and pay GRT on their earnings but the “labor” contractors usually don’t observe the tax laws;

c) Social Security withholdings and employer matching is not being withheld -- giving a competitive advantage to the prime contractor and a greater burden on society for the Medically Indigent Program (MIP). No SSI contributions no Medicaid-Medicare credits;

d) and he was not sure a company would have to have workman’s compensation insurance on the ‘contractor’ which goes back to the short-and-long term problems mentioned above.

GFT CLAIMS "Democracy Denied" at KGTF board meeting -- Guam's public radio station has a board of directors and an effort to put teacher's union officials in control fell apart when the Chair and ruling members of the Board continued their efforts to dominate KPRG and deny what teachers call "any voice of decent" (or do they mean "dissent"?

The Marianas Variety reported (3/12/08) on a classic unlawful discrimination lawsuit, filed by five former garment workers on Saipan.

Nenita Africa, Adona Carino, Emma Escobar, Emelita Magayaga and Asuncion Sapo, engaged attorney Steven Woodruff, to file the complaint in federal court against Mirage Saipan Co. Ltd.

The women, all from the Philippines, were employed by Mirage between 2003 and 2004. The garment firm claimed that the employees could not meet production quotas, but the women said the company had not informed them about any performance standards.

After being terminated in 2004, Magayaga questioned her supervisor, Miss Liang, about why they were terminated and Liang is alleged to have said “one Filipino out, all Filipinos out.”

The women asserted that most of the Filipino contract workers were terminated while most of the contracts covering Chinese workers were renewed. Magayaga, Escobar and Africa claim that their supervisors subjected them to various forms of ridicule and harassment on account of the ages of the employees.

The lawsuit also charges Mirage with unlawful discrimination based on national origin, age discrimination, breach of contract, breach of an implied covenant of good faith and fair dealing, and intentional infliction of emotional distress.

The five women are seeking lost earnings, lost benefits and punitive damages against Mirage. In addition, they want an exemplary award, punitive damages, compensatory damages and damages for mental suffering, anguish, humiliation, loss of enjoyment of life, and other damages -- including attorney’s fees, cost of suit and other relief.

Employers note: additional research into similar cases of unlawful discrimination (and the consequences) can be found at:

http://www.allbusiness.com/discrimination/3159539-1.html?googlesubtop=discrimination%20cases

Biggest Donors to U.S. Election Campaigns. -- The Center for Responsive Politics has published a list of top 100 biggest givers list. The Center is a not-for-profit, non-partisan watchdog group in Washington, D.C., that has tracked contributions to federal candidates and federal parties since 1989.

Notwithstanding current gas prices, oil companies are not the major donors that you might expect. Chevron, the first oil company on the list, was 71st and ExxonMobil, the world’s largest oil company, ranked 75th, packed right in there between the National Rural Electric Cooperative Association and the National Restaurant Association. The National Rifle Association was 32nd; the National Education Association was sixth. And Big Tobacco? Well, the Altria Group came in 17th, behind the American Medical Association.

So who made the list of America’s top donors? Unions. They had six of the top 10 and 12 of the top 20 spots. Only two corporations were in the top 20: AT&T and Citigroup. AT&T, second on the list has given $38.9 million to federal candidates and parties. Others in the top 10 are the National Association of Realtors, the American Association for Justice (formerly the Association of Trial Lawyers of America) and Goldman Sachs, which gave $27.8 million over the years, (a former Goldman Sachs golden boy, Robert Rubin, served as U.S. Secretary of the Treasury during Bill Clinton’s two administrations).

But the other top spots belong to unions: The International Brotherhood of Electrical Workers, the Laborers’ Union, the Service Employees International Union and the Carpenters and Joiners union, and on and on.

So, who was No. 1? The American Federation of State, County and Municipal Employees (AFSCME), which represents 1.4 million people who work in the public sector at various levels. AFSCME's agenda includes opposing privatization. The first priority of government, it seems, is protecting and perpetuating government. Ever wonder why government continues to grow under different parties and presidents, despite promises to shrink it, cut it, reduce it, reign it in and streamline it?

Clarification exempt “executive” under FairPay Act.

Executive explanation

• Two additions to the list of examples of “management activities” were added to reflect DOL’s longstanding view that “management activities are not limited to supervisory activities.” The two new examples are “planning and controlling the budget” and “monitoring or implementing legal compliance measures.”

• New language on “concurrent duties,” clarifies DOL’s “previous position” that exempt executive employees can perform exempt and non-exempt duties simultaneously without losing the exemption as long as the employee’s primary duty is management.

• The “directly and closely related” standard means the same thing as the “directly and closely related” language (in old section 541.108) that time spent on work that is “directly and closely related” to the performance of exempt work is considered to be time spent on exempt work.

Administrative assessment

The criteria in the duties test for the administrative exemption in the 2004 revised final regulations are substantially the same as under the prior rule. DOL answered a question about whether a defense contractor’s background investigators were exempt administrators. It said administrative employees’ primary duty must involve “performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers” as distinguished from working on a production line or selling a product. Non-manufacturing employees can be considered ‘production’ employees if their job is to generate (produce) the product or service that the employer’s business offers to the public.

The opinion letter is consistent with case law and prior opinion letters, the investigators are not eligible for the administrative exemption because their activities “are more related to providing the ongoing, day-to-day investigative services, rather than performing administrative functions directly related to managing … [the] business.” The opinion said, most of the investigators’ work involved “the use of skills in applying known standards or established techniques … as distinguished from work requiring the exercise of discretion and independent judgment as required for exemption…”

Professionals

Having some employees in the same job classification who perform the same duties but who are paid on a different (hourly) basis, does not affect the status of any other exempt employees paid on a salary basis. A new opinion letter says on-call nurse practitioners paid on an hourly basis were classified appropriately as non-exempt, while nurse practitioners who worked a regular day shift and were paid on a salary basis were exempt professionals.

The employer could pay the exempt nurse practitioners a shift differential for evening or night work without destroying their exempt status. An exempt employee’s predetermined salary “does not have to include all of the compensation that the employee will be paid,” the letter said. The shift differential can be paid on an entire shift basis or an hourly basis without invalidating their exemption. But if “an exempt employee’s pay is computed on an hourly, daily, or shift basis, there must be a reasonable relationship between the guaranteed salary and the amount actually earned”. Actual earnings must not be so disproportionately larger than the guaranteed salary as to make the “salary basis” of payment a sham.

This is guidance about verification of identity and work eligibility of job applicants from Micronesia. Employers should consult an attorney who specializes in immigration and employment law about this subject. Immigration law is a very narrow legal field and employers should consult an attorney who specializes in Immigration law when  questions arise about immigration issues.  We discourage the use of "immigration consultants" who are not lawyers.  Also read our file on Form I-9 Verification of Identity and U.S. Work Eligibility at: Immigration  

USDOL PROPOSES RULE CLARIFYING FMLA -- The U.S. Department of Labor (DOL) issued a notice of proposed rulemaking intended to help employers and their employees better understand their rights and responsibilities under the Family and Medical Leave Act (FMLA), and advance the implementation of a new law that expands FMLA coverage for certain military family members.

DOL says the proposed changes include increased notice obligations for employers; a revision of employee notice rules; technical changes to reflect recent decisions by the Supreme Court and lower courts; and a new section covering recently enacted legislation to expand the FMLA entitlement to 26 workweeks for certain military family members caring for a service member with a serious illness or injury.

The most noticeable changes:

(1) Up to 12 weeks of leave for qualifying exigencies arising out of a covered family member's active military duty, and

(2) Up to 26 weeks of leave in a single 12-month period to care for a covered servicemember recovering from a serious illness or injury.  Eligible employees are entitled to a combined total of up to 26 weeks of all types of FMLA leave.

We are analyzing the 127-page proposed rule to determine what the Council's position will be. Input from our members is solicited.

Click here for more information and to download a copy of the notice of proposed rulemaking.

NEW OKINAWA RAPE CASE MAY HASTEN MARINE MOVE TO GUAM -- Japan's prime minister has denounced the suspected rape of a 14-year-old girl by a U.S. Marine on Okinawa, an episode that echoes a 1995 case that sparked huge protests that jolted the U.S.-Japan alliance.

The Marine, 38-year-old Tyrone Hadnott, from Camp Courtney, was arrested Monday on suspicion of raping a schoolgirl when the two were in a car Sunday. He denied raping the girl but acknowledged forcing her to kiss him.

Political fallout could be limited this time if the two governments are careful. Japan is home to some 50,000 U.S. troops under a security alliance that is a pillar of Japan's postwar diplomacy. Unlike in 1995 when the Okinawa governor was a staunch critic of the bases -- the current governor was elected with ruling party backing and is inclined to support Tokyo on U.S. military issues.

U.S. officials have responded quickly to ease fallout from the case, as Tokyo tries to persuade Okinawa residents to accept a plan to relocate the Marine's Futenma Air Station from the densely populated central Okinawa city of Ginowan to the coastal city of Nago -- a move is part of a broader plan to move some 8,000 Marines from Okinawa to Guam.

Steady Progress in CNMI Immigration and Labor Reforms

H.R. 3079, the Northern Mariana Islands Immigration, Security and Labor Act, was considered and ordered favorably reported to the full Senate, Guam Delegate Madeleine Bordallo announced today.

Virgin Islands Delegate Donna Christensen (D-VI), whose Subcommittee on Insular Affairs cheered today’s passage of H.R. 3079 by the Senate Energy and Natural Resources Committee. Christensen called it one step closer to safeguarding our nation’s westernmost border from terrorism, establishing an immigration policy and labor standards rules consistent with the U.S.

A favorable Senate vote is expected soon and the measure will go to the White House where an early signature is been assured.

These events stand as a complete rejection of Resolution 80, which was unanimously adopted by the Guam Legislature on October 10, 2007. The authors of the resolution exhibited appalling racism and an utter lack of understanding that 3079 was "payback" for the antics of Lobbyist Jack Abramoff and the corruption in the CNMI government. Read Resolution 80

The Governor's Office asked us to send representatives to meet with an official from the General Accountability Office who was here to discuss aspects of the military build-up with representatives of the local business community. Our President, Monty McDowell and Executive Director Bill Gibson co-authored a written reply to questions from the GAO: