Bill that would require foreign worker to pay $20,000 criticized

Bad bill: Senators must reject measure to increase the H-2 worker fee

Sen. Matt Rector has amended Bill 48 to reduce a proposed increase for the annual registration fee for temporary foreign workers, but it remains bad, punitive legislation that lawmakers must reject.

The bill would increase the annual fee companies pay per H-2 worker from $1,000 to $5,000, beginning in October. The fee would be further increased over the next two years, capping at $20,000. While this is half of the original proposed increase, there's no logic or sense behind the exorbitant fee.

Rector says the bill would raise local wage levels and provide employment for Guam workers instead of foreign workers, and that the increases can be passed on to customers of companies that employ H-2 workers.

The fact is these H-2 jobs require skills and training in various trades and construction professions. You can't just hire people off the street to be masons, heavy equipment operators or welders.

And Guam will need upward of 20,000 H-2 workers in the coming years for construction projects associated with the military buildup. Guam lacks sufficient skilled workers to fill that many jobs; temporary foreign workers will be required.

The higher H-2 fee would unfairly punish companies, especially smaller businesses, by making it prohibitive to hire the temporary foreign workers needed to complete military buildup-related construction projects. And there's no way the federal government, or any other customer, would assume the costs of the increased fees.

Bill 48 wouldn't create better-paying jobs for Guam residents. What it would do is unfairly penalize companies, including local small businesses. It also would endanger military buildup projects. And it would add to the impression that our island discourages private-sector growth and development, and that Guam doesn't welcome companies who want to invest here.

Rector's fellow senators must recognize that Bill 48 is bad legislation that must be rejected. www.guampdn.com

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Chairman: Bill will hurt small business

BY CONNOR MURPHY • PACIFIC DAILY NEWS • MAY 26, 2009

Even cutting a proposed fee increase for temporary foreign workers in half won't stop it from hurting island businesses, according to industry officials.

Bill 48, introduced by Sen. Matt Rector, raises annual registration fees for temporary foreign workers.

If the bill becomes law, the fee would go from its current $1,000 per worker to $5,000 each this October. Over the next two years it would raise in increments to a final fee of $20,000 per worker in 2011.

An earlier version of the bill saw the fee rising to $40,000 immediately.

"By implementing a fee of up to ... $20,000 per year gradually over a period of several years for each worker it will make it more profitable to hire local workers at wages comparable to that of their brothers and sisters doing exactly the same work in Hawaii or elsewhere in the nation," the bill states.

The bill would send most of each registration fee into the government's General Fund. Currently, the entire $1,000 fee each employer pays deposits into the manpower development fund, which supports work force training programs.

The revised bill doubles the current manpower fund contribution to $2,000, but this contribution doesn't increase in increments as the fee does.

Most temporary foreign workers on Guam are here on H-2B visas and working in the construction industry. Companies must pay annual registration fees for each employee.

Last year U.S. Department of the Interior representatives testified to Congress that the construction boom expected along with the military buildup could require more than 20,000 workers, Pacific Daily News files state.

Frank Campillo, Guam Chamber of Commerce board chairman, said that reducing the increase didn't fix issues he saw with the bill. It still could prohibit smaller construction businesses from participating in buildup projects, he said.

"If a small business had to come up with that amount of money to hire people that we know for a fact the business would not be able to find on Guam, you're killing the opportunity that they might have," he said.

Limited Workers

It's likely the island won't have enough trained local construction workers at the height of the military buildup, said John Robertson, owner of AmOrient Contracting Inc. and a Guam Contractors Association board member.

"There aren't that many people in the market with an interest in construction jobs," Robertson said. "It just creates an impossibility."

Bringing in workers from the mainland United States rather than nearby foreign countries will be difficult because of Guam's distance, Campillo said.

"There is clear evidence that no matter what we do, we won't be able to provide the labor pool for the work that's coming ahead," Campillo said.

Finding workers on island already is competitive, Campillo said.

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Bill 48 won't create jobs for Guam residents

BY JOHN M. ROBERTSON • MAY 26, 2009 - www.guampdn.com

Sen. Matt Rector has revised and reintroduced his Bill 48 for legislative action by increasing H2-B Registration Fees to $20,000/annum/worker in place of the current $1,000/annum. This is instead of the originally proposed increase to $40,000/annum/worker.

It has no greater value than the original as "The Middle-Class Job Creation Act of 2009." If enacted into law, there are several courses this could take with different consequences:

Contractors and others would most likely use nonimmigrant alien workers anyway and be damaged substantially by the increase in registration fees, especially with the inclusion of professionals such as those in the medical, education, engineering, accounting and other fields. In the case of construction related to the military buildup, the cost would have to be passed on to the federal government as a component of labor cost. In a conservative calculation, the amount would be 10,000 H2-B workers at $20,000/worker/annum, or $200 million.

Is this the kind of gesture we want to present to the entity that is delivering the much-needed economic boost to our island? This would cover half the annual Guam budget. In fact, this approach would face legal challenge that would nullify it anyway. The cost of GovGuam and civilian construction would escalate by a considerable amount, up to a 30 percent increase. This approach would not create jobs for Guam residents.

Contractors and others could possibly bring in workers and professional employees from Hawaii and the U.S. mainland. This too would increase cost of business for all concerned and have a negative impact on our economy. Contractors on the mainland U.S. would be required to hire more H-2B workers, if Guam contractors were successful in luring workers to Guam. History has shown that most construction workers from the U.S. mainland cannot be relied on to fulfill a long-term commitment to projects here in the western Pacific. This approach would not create jobs for Guam residents.

Contractors and others could try to rely only on locally available workers. While the population of Guam is about 170,000, there are not that many interested in a career in construction, possibly 4,000. Maj. Gen. David Bice of JGPO has announced that the military is figuring on only 2,000 skilled workers from Guam. If we try to use untrained and unskilled workers in construction, many will be injured due to accidents and costs would skyrocket because of rework. This approach would not create jobs for Guam residents.

The correct way to create good-paying, middle-class jobs for Guam residents is through skills training. That is being done at the Guam Community College using Manpower Development Funds along with federal grants and at the GCA Trades Academy with funding by AHRD, private sector scholarships plus tuition paid by the students and by their employers. The GCA Trades Academy now has 160 students in the construction trades program, many more than are being trained currently at GCC.

If a portion of Manpower Development Funds could be allocated to the Trades Academy, more Guam residents could be trained for good-paying jobs during the military buildup and be on hand to take over jobs temporarily held by H-2B workers when the buildup is over.

We hope that the 30th Guam Legislature will reject Bill 48 on the basis that it has no redeeming value for the people of Guam.

John M. Robertson, P.E., is a civilian engineer, general contractor and a resident of Tamuning.