Companies repay recruiter fees to workers – AP – 3/5/12

4 SD companies repay recruiter fees to workers

The Associated Press – RAPID CITY, S.D.

Four employers in South Dakota’s Black Hills have repaid tens of thousands of dollars to foreign workers who paid a Sturgis-based employment recruiter fees that aren’t permitted by the federal government.

The Labor Department said in January it had ordered Custer State Park Resorts to pay back $93,000 to 72 foreign workers hired for the 2010 tourism season. Officials with three other businesses—Xanterra Parks and Resorts, Mount Rushmore KOA and Shiba Investments—tell the Rapid City Journal ( that they also have been ordered to pay back foreign workers. All the companies worked with Global Employment Agency, which Scott Kaubisch has shut down amid the Labor Department’s ongoing investigation.

Kaubisch said he did not exploit foreign guest workers, but took phone calls at all hours, arranged rides and helped secure housing for them.

“We wanted to make sure these workers were taken care of,” he said. “We did nothing to hurt them.”

The Labor Department says it is impermissible to charge foreign workers fees to get jobs, and Kaubisch charged as much as $1,500 per worker. No action has been taken against him. The Labor Department says businesses are legally liable for the actions of their contractor.

Kaubisch said he never misled companies that hired him about charging foreign workers fees to cover expenses.

“Every single employer knew it,” he said.

Josh Schmaltz, general manager of Custer State Park Resorts, said Kaubisch did not tell him that he was taking money up front.

“What he was saying was he was getting reimbursed for expenses. That he was clear about,” Schmaltz said. “But after the (Labor Department) investigation, they had found it was not a reimbursement, it was an employment fee.”

Such fees can bury guest workers in debt, according to one workers’ rights advocate.

“Their reality is that they spend a lot of money to come—money they don’t have—that they take out high-interest loans to get,” said Jacob Horwitz with the National Guestworker Alliance.

The Labor Department ordered Mount Rushmore KOA to pay about $20,000 to about 15 workers after an audit last year, general manager Josh Daiss said. All the money was repayment for recruitment fees charged by Kaubisch, he said.

Karim Merali, managing partner in Shiba Investments, which owns the Adoba Eco Hotel in Rapid City, said the Labor Department ordered his company last year to repay about $20,000 in recruitment fees and travel expenses to employees hired in 2008 and 2009 at the hotel that then operated as The Radisson. He said for many years he paid the fees to Kaubisch for the employees, but at some point, new workers paid Kaubisch directly.

Xanterra Parks and Resorts, which operates concessions and dining facilities at Mount Rushmore National Park, hired Kaubisch in 2010. General Manager Russ Jobman said the Labor Department ordered Xanterra to pay back about $12,000 to 10 employees.

“We were surprised. We were shocked,” Jobman said. “That is a lot of money to any worker. You would rather give it to them in a wage, rather than have that happen.”

Kaubisch’s clients ranged from a North Dakota hotel to a Florida golf resort. Lynne Lucas, food and beverage manager at Pelican Nest Golf Course in Bonita Springs, Fla., which used Kaubisch as a recruiter in 2010, praised his work.

“I know the employees that we had reached out to him if they needed money or had trouble,” Lucas said. “It was almost like he was `Uncle Scott’ to them.”

Horwitz said such stories are common.

“I think a lot of the labor recruiters and employers paternalistically claim they are taking care of the workers like a father or uncle, when in point of fact, they are exploiting the workers and their vulnerabilities by charging these fees,” Horwitz said.

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