Two Saipan-based garment companies were sentenced on May 30 after pleading guilty in November 1999 to criminal contempt charges for violating a 1998 consent judgment entered by the US District Court for the Northern Mariana Islands that ordered them to pay legally-required wages to their employees. As a result of the Federal government’s crackdown on labor and employment law violations in the Commonwealth of the Northern Mariana Islands (CNMI), Micronesian Garment Manufacturing, Inc and Diorva Saipan, Ltd. (MGM/Diorva) have been sentenced to each pay a fine of $100,000 and serve five years probation. A US Labor Department investigation found that MGM/Diorva underpaid workers by almost $1 million from November 1998 through January 1999, although both companies in April 1998 had been ordered by the court to comply with overtime and record keeping requirements of the Fair Labor Standards Act (FLSA). The April 1998 court order involved FLSA violations committed by MGM/Diorva from July 1996 to about March 1998. It resulted in the payment of $560,000 to 427 employees. The Labor Department’s subsequent investigation, however, revealed that 336 employees were owed $986,661.05 in unpaid wages, including overtime. MGM/Diorva paid the back wages, and they admitted to knowingly and willfully violating the April 1998 consent judgment and to not paying workers their lawful wages. In March 1999, the Labor Department assessed MGM a civil money penalty of $336,000 for repeated and willful violations of the FLSA, stemming from the November 1998 — January 1999 violations. The company has appealed the fine. Saipan is the capital of the Commonwealth of the Northern Mariana Islands, a US territory. The child labor, overtime pay and record keeping provisions of the FLSA apply to employers on the islands but under the existing covenant the island government sets and enforces its own minimum wage, which is $3.05 per hour. US Labor Department news releases are accessible on the Internet at

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