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  • By Mar-Vic Cagurangan

Imperial casino to pay $3M for labor violations

The Imperial Pacific International has agreed to pay the U.S. Department of Labor $3.36 million for workers’ back wages and other civil penalties, assuming its contractors’ liabilities for labor violations.

Under the consent judgement that capped the USDOL's lawsuit, the labor secretary will be tasked to allocate and distribute the court award to former construction employees hired by IPI’s contractors to build the Imperial Pacific Resort Hotel and Casino in Garapan.

In assigning liability to IPI, the federal labor department noted that the casino developer “had economic control” over the construction project and its contractors' workers, “making it an employer of those construction workers for purposes of the Federal Labor Standards Act.”

IPI has contracted the construction project to Gold Mantis Construction, Decoration (CNMI) LLC and MCC International Saipan Ltd. Co.

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According to the labor department’s lawsuit, investigation conducted between Jan. 22, 2016 and Dec. 19, 2017 on the casino project revealed several FLSA violations by the contractors such as failure to pay overtime and minimum wages.

Prior to the consent judgement signing, IPI gave the labor department as initial payment of $300,000 on March 27. The rest of the judgment award will be paid in three consecutive years — $1.02 million installment — starting Dec. 1, 2019 and ending 2021.

Chinese workers stage a rally in front of the casino construction site, protesting nonpayment of their wages in Septermber 2018. Photo by Jon Perez

To avert the recurrence of nonpayment of workers, the consent judgment requires IPI to collect a minimum of $100,000 each from its contractors, to be deposited either with IPI or in escrow account, to cover payroll.

The court has appointed Burger Comer & Magliari Certified Public Accountants as an independent monitor tasked to “inspect all of the physical facilities and working conditions of the worksite; inspect all books, records, and documents including employee time, payroll and personnel records.”

IPI will shoulder the independent monitor’s expenses. IPI will deposit $45,000 in the court’s registry for payment to the independent monitor on or before April 15, 2019.

IPI’s yet-to-be completed Imperial Palace, a 14-story luxury resort with 350 rooms and over 200 gaming tables and more than 350 slot machines. IPI relied on workers from China and the Philippines, is currently on hold due to labor shortage in the CNMI.

In 2017, IPI was raided by FBI after contractors were found to have hired Chinese tourists to work at the construction site. Contractors were fined $193,750 for violations of the Occupational Safety and Health Act related to a death and multiple injuries suffered by workers at the construction site. This year, the U.S. Labor Department finalized a settlement with IPI subcontractors of $13.9 million for violations of the Fair Labor Standards Act.

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