By Haidee V. Eugenio
Variety Assistant Editor

CITING financial insolvency, the Department of Labor has affirmed the denial of a request to hire three more alien workers by the owner of a massage parlor and night club convicted of prostitution and immigration fraud.
Labor Hearing Officer Barry Hirshbein on Wednesday affirmed the denial of the hiring request made by Edward C. Cabrera, owner of Red Heart Massage and Maya Karaoke Night Club.
Labor initially denied the hiring request after determining Cabrera’s financial inability to ensure employees’ payroll and welfare.
Cabrera, who was convicted of prostitution and immigration fraud last year, appealed Labor’s denial of his hiring request.
During Tuesday’s hearing, the employer presented documents to support his claim of solvency, including the business gross revenue for the first three quarters of 2004, 2005 and 2006.
In the third quarter of 2006, records showed that Cabrera’s business gross revenue was $33,430. In the same period, the employer paid approximately $24,380 in wages, and this includes his own wages of $606 per month as well as those of his sons Eric and Edward who were working full-time for minimum wage during the second and third quarters of 2006.
Hirshbein said that while the business gross income increased by about $11,000 in 2006, it was more than offset by the increase in wages of almost $12,500 during the same period.
“The hearing officer believes that given the gaps in the documentary evidence presented by employer, the actual expenses are likely to be greater and the loss higher than what is reflected here. Based upon the foregoing, the hearing officer finds that the employer is not solvent,” said Hirshbein in the six-page administrative order dated Jan. 10.
During the hearing, Hirshbein raised other questions about the employer’s employment practices but these did not form the basis for the decision in this case and were referred instead to Labor’s Enforcement Section for review.
For example, Hirshbein questioned how a bar that purchases only $700 worth of beer, wine, alcohol and other beverages per year can generate the revenue declared by the owner of Red Heart Massage and Maya Karaoke Night Club.
The labor hearing officer also learned from the employer’s testimony that he paid his employees in cash, did not keep written records of his wage payments, and did not provide written payroll statements to his workers. The employer also testified that his employees earned commissions on “ladies’ drinks” but these were paid in cash and were not reflected in the wages paid.