Accounting firm: IPI has dual rate system for its employees

THE Commonwealth Casino Commission has authorized the use of dual rates for some Imperial Pacific International employees, according to a court-appointed independent monitor, Burger Comer Magliari or BCM, an accounting firm.

In April 2019, IPI agreed to a consent judgment with the U.S. Department of Labor to resolve the labor violations committed by its construction contractors.

IPI agreed to pay USDOL $3,360,000 for backwages, liquidated damages, and monetary penalties. The casino also agreed to cooperate with BCM, permitting it to enter the worksite without prior notice 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.”

BCM managing partner David Burger, in a report filed on Aug. 16, 2019, stated that IPI has a “dual rate” system in place which was implemented recently.

After an interview of about 210 IPI employees, the accounting firm identified potential issues, the report added.

“As IPI consolidates departments or functions, it is possible that an employee will perform the duties of the job they were hired to do, and may also perform the duties of a different position.”

The different position may carry a different hourly rate, BCM stated.

Sometimes an employee is paid based on the rate for the alternate position, and sometimes the employee is paid solely the rate for the original job classification.

BCM said the Fair Labor Standards Act and applicable regulations did not seem to have any guidance or prohibition on paying an employee one rate regardless of whether the employee performs the duties of more than one position.

“Our research indicates that the employee and employer can agree on how the employee will be compensated.”

BCM said it found guidance on how to calculate overtime pay for employees who work in more than one position,

In cases where a non-exempt employee is paid different rates for different duties performed, the overtime rate is calculated based on the weighted average hourly rate for regular worked performed, BCM stated.

It added that the Commonwealth Casino Commission or CCC apparently has authorized the use of dual rate for some of the employees.

“There is a specific stamp of CCC identification tags for employees authorized to receive dual rates,” BCM added.

“We are still trying to resolve certain issues relating to the rate of pay that was actually paid to certain employees. In all cases, IPI paid employees at a rate higher than we calculated.”

BCM said there were 21 in the sample of 280 employees in which the pay rate seemed to differ from the amount on the personnel action form or offer letter.

IPI stated that in almost all cases the difference was caused by tips paid to the employees, BCM added.

BCM likewise reported that there are nine contractors working for IPI. BCM visited six of them. Of the other three, BCM said one is on Guam; one shows contact information in Seattle; and one does not currently have any employees on Saipan.

According to BCM, the six contractors that it visited all said that they were not currently working on any projects for IPI, and were waiting for payment for their services.