Guest workers buoy industry

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The Senate Small Business and Entrepreneurship Committee under the chair-manship of Sen. David Vitter, R-La., questioned seafood regulators and industry experts on the effects of federal labor and safety laws on small businesses within the seafood industry.

According to Vitter, Washington bureaucrats have failed to realize their rule making has placed many domestic seafood producers permanently out of business, leaving a void, and the sub-committee heard from the industry during proceedings that began earlier this month.

Seafood plays a major role in the culture and economy of the Gulf states, where 70 percent of the nation’s oysters and 69 percent of domestic shrimp – as well as large quantities of soft and hard-shell blue crabs are produced.

Statements before the committee highlighted the seafood industry as a creator of jobs and revenue, supporting numerous families and coastal communities along the Gulf.

This is why a strong regulatory scheme is in place, witnesses acknowledged, that can should take into account local and regional needs while promoting safety and economic growth.

Gulf seafood processors rely on seasonal foreign workers to fill the most labor-intensive positions throughout the sector. These workers come to the United States legally under the H-2B visa program. This program is vital to many in the seafood business as many of these operations take place in small rural communities where access to a stable, reliable labor force can be troublesome.

GSI’s Frank Randol testified that the guest worker program is extremely important for the small business community and vital for the survival of seafood processing, especially in states bordering the Gulf of Mexico.

After completing active duty service as a lieutenant in the U.S. Army, Randol returned to Louisiana. Starting with a one-man food truck in 1971, he founded Randols. Four decades later, the operation has grown in size and scope. It has expanded into processing a variety of seafood; especially crawfish.

“I’m here to express my concerns about the future of my business and other small businesses that struggle to daily succeed,” the owner of the famous Lafayette restaurant told the committee. “During the past four decades we have faced continuous natural and man-caused obstacles including floods, hurricanes, oil spill, lack of product and Chinese crawfish dumping. Today we face one of our biggest challenges, changes in H-2B rules by the Department of Labor that has paralyzed the Louisiana crawfish industry.”

Last year his plant processed between 6,000-8,000 pounds of seafood daily. Having missed both caps for guest worker visas this year, he has little hope that the plant will even open.

Portia Wu of the U.S. Department of Labor told the committee that seafood producers are one of the top ten businesses filing for H-2B applications. The department’s processing of visas has been slowed by a series of wage level court challenges brought by the seafood industry since 2011, as well as other groups contending the agency isn’t doing enough to insure reasonable pay standards and working conditions for foreign workers.

According to her the department understands the need for foreign workers, but the federal government has an obligation to insure that seafood producers pay comparable wages to U.S. workers. Undercutting American workers is not an option, and open positions must be advertised sufficiently so American workers can claim the jobs whenever possible.

Since the DoL took over initial wage certification from states in 2008, the process to acquire guest workers has become increasingly more time consuming and difficult. “I initially I did the paperwork myself but have had to turn it over to someone more qualified to run through the government hoops, just like many people have to use CPAs,” Randol explained.

As the difficulty of compliance with this program has increased, the Department of Labor’s decision to stop accepting Private Wage Rate Surveys has forced businesses to re-allocate their financial resources, often paying out more in order to cover high wages that do not reflect local markets.

During Randol’s testimony to the committee, he said comments such as, “If you pay more money then you will get the labor you need,” are regularly heard.

“We feel that it’s more about the job than the money, it’s probably considered by most to be one of American’s least desired jobs,” he said.

During a recent recruitment in Louisiana, Randol hired seven prison trustys to handle crawfish processing. After the first day, one trusty said he would rather go back to jail than peel crawfish. The warden was informed and he never returned. The remaining trustys in the training program continued to shrink until the program was halted two weeks later.

Union activity has also created even more problems for the industry.

The National Guest Workers Alliance is seeking a negotiated long-term solution to reach an agreement to the reported “significant labor abuse” in the seafood industry. The National Labor Relations Board has also become involved.

Louisiana Agriculture and Forestry Secretary Mike Strain testified that temporary foreign workers are critical to the Louisiana seafood industry. He said that it was important that legal temporary workers get work visas to support businesses from farming and fishing to restaurants and wholesale and retail food operation.

“Many of these businesses are located in rural areas that simply do not have sufficient populations to supply their extra workforce needs,” he told the committee. “Many of these businesses are located in rural areas that simply do not have sufficient populations to supply their extra workforce needs.”

“Urgent fixes are need to save the H-2B Program for small businesses,” Randol testified. “Congress has to take action now. The lost opportunity to fix the problems created by the U.S. Department of Homeland Security (DHS) and the DoL last year has already done severe harm, a lot of small businesses will not recover.”

Randol said Congressional action is needed to block the recent DHS/DoL proposals. In addition, the H-2B returning guest worker exemption from the annual visa cap must be resumed, as well as returning authority for determining prevailing wages to the states.

“We need a seat at the DoL table, similar to that of the National Guest Workers Alliance. Also, the Small Business Alliance Office of Advocacy needs to be more aggressive in confronting both the Departments of Homeland Security and Labor as policy changes are discussed,” he said.

In his testimony, Randol said that there are numerous “hurdles” that can alter seafood production, one example is a hurricane. If a plant is forced to close, under the new DoL rules seafood processors would be obligated to pay 75 percent of the wages of H-2B workers for a for the full term of 10 months, even if they return to Mexico. The new parity rule would force processing plants to offer the same wages and benefits for citizens working in the plant.

“Currently all our plant workers are at a base rate. We offer production incentives; pay for pounds peeled. The more workers peel, the more they make. Some workers can earn $12-$15 under this incentive, parity could stifle this incentive,” Randol explained.

In addition to H-2B, Vitter’s committee heard testimony from the U.S. Food and Drug Administration‘s Steven Solomon on whether the 2.77 percent of foreign seafood imports now subject to inspection is sufficient to insure safety.

Solomon was questioned on the effeteness of the FDA’s steps to prevent importers from moving foreign seafood rejected at one port to another where it might avoid inspection.

“With more resources the agency could do more,” he told the committee. “If the agency had more resources it would expand oversight across the board in its multi-faced safety controls that include requiring importers to verify that they obtain shipments from processors who comply with safety rules.”

Solomon said the agency has made progress in identifying misidentified foreign fish – intentionally mislabeled to generate higher prices. He also said the department sends electronic notices of rejected shipments. According to him, the FDA is currently working on a system to formally tag rejected shipments, but the system is not yet in place.

“We need to make sure that federal regulations do not negatively impact our small seafood providers,” said Vitter, who introduced the Imported Seafood Safety Standards Act. “What Washington bureaucrats often fail to realize is that their rule-making can put many domestic seafood producers permanently out of business and leave a void that will quickly be filled by foreign competitors.”