Legislative Update: Debate over proposed forest labor law ongoing

Two very important bills focused on the use of “bonded” workers (or foreign labor) in Maine’s forest products industry came to the Legislature this year. The bills, sponsored by Senator Troy Jackson and Representative John Martin of Aroostook County, were aimed at the elimination of Canadian workers in Maine’s north woods. Jackson and Martin have been frustrated over the use of Canadian labor in their region for years, and this looked like an opportune time to put a halt to it once and for all.

These two bills, LD 1545, An Act to Protect Maine Workers and LD 1552, “An Act to Improve Employment Opportunities for Maine Workers in the Forest Products Industry” came at a very integral point in time for the forest products industry here in Maine. Here in the U.S., the economy is beginning to recover, and demand for Maine paper will gradually increase in the next several months. Combine that with an increase in global demand for wood fiber due to labor strikes in Europe and the earthquake in Chile, and Maine’s forest products markets are poised for growth. Tampering with the wood supply chain would mean instability in the market and make that growth more difficult.

For those who may not know what a bonded worker is, it is a foreign citizen that is hired by an American company due to lack of American labor available for specific jobs. There is a legal federal process by which an American employer must go through in order to hire a bonded worker (Federal H2 program). The process requires that American citizens be given preference and first opportunity to take the job. In the instances where no American takes the job, the company is then allowed to hire the bonded worker. Bonded workers are important to a variety of other Maine industries as well, including agriculture, tourism, and medical.

Bonded workers are an essential component of the wood supply chain to Maine’s paper mills and saw mills, and other wood manufacturers. In fact, they represent approximately 12 percent of Maine’s wood supply. A disruption of that much wood could mean mills taking down time or layoffs.

Canadian loggers have traditionally filled gaps in labor supply in northern and remote sections of Oxford, Franklin, Somerset, Piscataquis, and Aroostook Counties. These are areas usually far away from Maine towns, family, and public services, often a combination that makes the jobs unattractive for American workers. So, many companies who work in this region must supplement their American workforces with scattered bonded workers. It is not unusual to have several Americans working with one, two, or three Canadian workers on a harvest site. It is also important to know that wood harvested in the far northwest regions of Maine’s big woods may feed mills across the state.

The first bill, LD 1545, An Act to Protect Maine Workers was a proposed piece of legislation to add a number of new requirements to Maine’s proof of equipment ownership law, which Maine logging employers already must follow in order to hire bonded workers, such as:

• Increasing fines for companies found in violation of bonded labor program requirements (for the second consecutive legislation session). The level of fines for a first offense would range from between $10,000 and $25,000, even if it was a minor technical paperwork violation!
• It would have created a two year prohibition on any company found in violation of bonded labor program requirements for any reason, again, even if it was a minor technical paperwork violation!
• It would have eliminated the use of an equipment lease as proof of equipment ownership as require by current law. This is despite the fact that almost all contractors lease their equipment as a legal and affordable means of obtaining expensive logging equipment, which often times can cost hundreds of thousands of dollars.
• It would have expanded the legal definition of logging equipment to include trucking and use of roadside equipment which could drastically impact the maintenance and construction of integral forest management roads.

Simply put, this bill had the potential to artificially increase the cost of wood, put Maine mills at an economic disadvantage during a time of growth and subsequently threaten a huge number of jobs in wood manufacturing facilities.

Interestingly, the Maine Civil Liberties Union submitted a letter to the Legislature’s Labor Committee expressing concern that LD 1545 violates the Equal Protection clause of the Constitution, and would have attempted to preempt federal labor law.

Like Senator Jackson and Representative Martin, agriculture and forestry interests are also concerned that the Federal H2 is very complicated, costly, confusing, and extremely difficult to use, especially for small logging contractors. The industry, as represented by the Maine Forest Products Council, has made repeated attempts to help fix the process during the past year, but the U.S. Department of Labor and Maine Department of Labor have pushed back.

In the end the bill was amended adding language to the laws governing proof of equipment ownership for employers using foreign laborers requiring that any lease used to demonstrate ownership must be a bona fide lease and setting forth some of the standards for determining whether a lease is bona fide. The amendment requires employers of bond workers to notify the Department of Labor of the name and location of bond workers performing logging work in the State.

The amendment requires employers seeking bond workers to form and participate in a recruitment clearinghouse that assists in evaluating and referring potential logging occupation workers. The Department of Labor will work with the clearinghouse to ensure understanding of, and compliance with, recruitment and hiring requirements under federal regulations and state law. This is a critical part of this legislation.

The amendment requires the Department of Labor to maintain a list of contractors who are seeking to hire bond workers, and to require landowners to hire contractors from that list. Contractors who violate federal regulations or state law relating to bond workers must be removed from the list. A landowner who enters into or maintains a contract with an entity that is not on the list is subject to a fine of up to $50,000.

The amendment establishes the Foreign Labor Certification Process Fund and adds an appropriations and allocations section.

Time will tell whether these modifications to the law improve the situation or not. The final resolution and outcomes of LD 1552, An Act to Improve Employment Opportunities for Maine Workers in the Forest Products Industry will be included in a future article.