Audit report: IPI not paying mandated CNMI prevailing wage

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THE federal court’s appointed independent monitor, Burger, Comer, and Magliari LLC, reported that Imperial Pacific International was not paying its employees — CWs and U.S./local workers — the mandated CNMI prevailing wage rates.

“CW-1 visa holders should be paid at the prevailing wage rate that became effective October 1, 2019, regardless of when their CW-1 status was approved,” the report stated.

The report added that the implementation of the prevailing wage rule also requires the employer to pay its U.S. workers at the prevailing wage rate from Oct. 1, 2019 forward.

“We believe that the CW-1 workers, and some U.S. workers were underpaid from Oct. 1, 2019 until their pay rates were increased,” the report stated.

In April 2019, IPI agreed to a consent judgment with the U.S. Department of Labor to settle and resolve the labor violations of former IPI construction contractors.

IPI agreed to pay USDOL — over four installments from 2019 to 2021 — $3.36 million for back wages, liquidated damages, and civil monetary penalties and also agreed to cooperate with Burger, Comer, and Magliari, a court-appointed monitor, permitting the firm to enter the IPI worksite without prior notice so it could “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.”

Managing partner David Burger said BCM randomly selected names of employees from the employee master list and the payroll registers to come in for interviews.

From Nov. 16, 2019 to February 15, 2020, two interviewers conducted interview sessions, Burger said.

He said the first interviewer conducted two interview sessions and interviewed 35 employees.

Burger said, “The primary concern voiced by these 35 employees was the implementation of the prevailing wage based on the prevailing wage survey.”

He said the second interviewer conducted nine interview sessions with 104 employees.

Employees stated during interviews that there was no time clock in their area that they could use to time in and time out. Instead they had to fill out time sheets manually.

In response, IPI human resources stated that “there may be employees in remote locations where there is no time clock.”

IPI also stated that it “actually [has] doubled the number of time clocks/biometric devices used to record employee work time.”

IPI HR staffers will look into the issue further with the department involved, Burger said.

The report stated that employees in one department must still fill out their time sheets manually. “The area where they work is not conducive to maintaining sensitive equipment, as it is exposed to the elements.”

According to the report, IPI implemented a new timekeeping program in 2019.

The accounting firm attached to its report an invoice for its services in the amount of $25,347.50.





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