Why it matters

The Department of Labor (DOL) announced settlements with four foreign-based construction contractors with a total payment of $14 million for violations of the Fair Labor Standards Act in relation to the construction of the Saipan Casino and Hotel. MCC International Saipan Ltd. Co., Beilida New Materials System Engineering Co. Ltd., Gold Mantis Construction Decoration Co. Ltd. and Sino Great Wall International Engineering Co. Ltd. all failed to pay minimum wage and overtime as required by the statute, the DOL’s Wage and Hour Division found in an investigation. In addition, three of the companies also employed workers who arrived on Saipan with tourist visas and never obtained proper work visas, the DOL said. The four companies will pay roughly 2,400 Chinese workers a total of $13.9 million in back wages and damages. The settlements should serve as a warning to employers to follow all relevant laws, regardless of where work occurs, the DOL cautioned employers.

Detailed discussion

The Department of Labor (DOL) initiated a wide-ranging investigation into the ongoing construction of the Saipan Casino and Hotel on the island of Saipan in the commonwealth of the Northern Mariana Islands.

According to the DOL, investigators with the Wage and Hour Division (WHD) determined that four Chinese-based companies—MCC International Saipan Ltd. Co., Beilida New Materials System Engineering Co. Ltd., Gold Mantis Construction Decoration Co. Ltd. and Sino Great Wall International Engineering Co. Ltd.—failed to pay their workforce in accordance with the Fair Labor Standards Act.

Specifically, the companies paid more than 2,400 employees from China less than minimum wage and neglected to pay them overtime.

In addition, three of the four companies (MCC, Beilida and Gold Mantis) employed workers who were brought to Saipan under a tourist visa waiver program offered by the commonwealth of the Northern Mariana Islands. Despite being in the country on tourist visas, the individuals were employed at the site without the proper work visas, the DOL said. Required to pay for their own airfare and recruitment fees prior to coming to Saipan, these employees also incurred debt of $6,000 or more.

To settle the charges, the four companies entered into settlement agreements with the DOL to pay a total of $13,972,425 in back wages and liquidated damages to the employees. The companies—which contracted with Imperial Pacific International for the casino and hotel project—are only one piece of the WHD’s investigation, the DOL noted.

“These settlements ensure that thousands of workers will receive the wages they legally earned, while simultaneously sending a strong, clear message to other employers,” WHD Acting Administrator Bryan Jarrett said in a statement. “Employers who evade the law in an attempt to reduce expenses must not gain a competitive advantage over those who play by the rules. Regardless of where work is performed in the U.S. or its territories, we will continue to enforce the law and level the playing field.”