By Walter F. Roche Jr. Sun Staff and Willoughby Mariano Orlando Sentinel
A State Department appeals board ruled unanimously yesterday that a South Carolina-based program that has placed 2,000 young foreigners for one-year stints in menial hotel and tourism jobs violates federal law and cannot remain in operation.
After conducting a three-day hearing in Washington, D.C., that concluded June 5, the panel decided that the American Hospitality Academy's programs in Orlando, Fla., and Hilton Head and Myrtle Beach, S.C., were really work programs and not management training, as company officials had claimed.
Noting that AHA, a for-profit firm, is paid about $1,300 a month under its agreements with hotels and resorts for each trainee placed, the six-page ruling states:
"The emphasis in these contracts is on having the positions filled. There are only fleeting, unspecific references to training responsibilities."
The three-member board said the deficiencies in the program "constituted serious violations of the regulations that could not be corrected. ... The board considered imposing lesser sanctions but concluded that these would not suffice to correct the deficiencies."
The decision by the board upholds an April 1 State Department decision revoking AHA's right to participate in the J-1 visa program, designed to foster international educational exchange.
AHA had been a participant in the program since 1998.
The revocation followed a State Department investigation triggered by complaints registered by two Thai students.
The Sun and The Orlando Sentinel reported in April that the foreign students who were signed up in the AHA programs were assigned to menial tasks such as cleaning goose dung from boat docks and conducting face-painting sessions for the children of hotel and time-share guests.
The students were paid $300 a month, or the equivalent of $1.67 an hour for a 45-hour week, far below the federal minimum wage of $5.15 an hour. AHA also provides housing.
Under State Department rules governing the J-1 visa program, AHA will be required to allow the current participants in the program to complete their stays here in the United States, according to department spokesman Nicole Deaner.
AHA President Cindi Reiman said yesterday that the company would appeal the decision in federal court.
"We're going to win this," Reiman said.
She said the State Department decision was based on a basic misunderstanding of the tourism industry by government officials. While the jobs AHA interns filled appeared to be menial, she argued, they are an integral part of a hotel management training program.
"It's a criticism of our industry," Reiman said of the ruling.
Currently, Reiman said, about 200 overseas students are working at AHA locations in Orlando and South Carolina. She said those students will remain until their contracts expire.
Although the company has not recruited foreign students under the J-1 visa program since November, she said, her company still actively recruits students from U.S. universities. The State Department has no jurisdiction over American students.
"It really hasn't affected our company dramatically," Reiman said of the decision.
Nothing has changed
One AHA foreign intern, who asked not to be named because she feared retribution, said yesterday that the ruling and the public hearings have brought little change for overseas students still in the program.
She said aspiring hotel executives are still baby-sitting children, cleaning floors and twisting balloons into animal shapes.
"It's still the same," she said. "They still treat us the same. I think nothing is going to change."
"It's a shame," said Bill Murphy, general manager of Celebration World Resort in Kissimmee, Fla., in response to the decision.
"We need to take a hard look at the rules for these programs. In the hospitality industry, every position is a training position to get to the top."
He said his time-share will continue to use the program. Currently, he has three foreign trainees, two from the Philippines and one from India, working at the front desk. They take reservations and perform other tasks.
The hearing in Washington was opened to the public only after the newspapers filed suit in U.S. District Court, arguing a First Amendment right to attend.
Under a settlement, the suit was dropped after reporters for the papers were admitted.
At the hearing, Reiman and AHA attorney Laura Reiff pressed their argument that entry-level work was a necessary part of a management training program.
But the appeals board said that, while there were benefits to the AHA program, it "does not appear to provide sufficient supervisory or management training to participants to be consistent with the authorizing regulations."
Concluding that the classroom sessions for AHA trainees were not linked to their job assignments, the decision states, "The program structure, including the use of employment contracts, appears incompatible with the goals of the J-1 designated training."
In its ruling, the appeals panel noted that the revocation will not affect a separate three-month summer work/travel program that AHA operates.
In addition, the panel said its decision will not trigger an automatic five-year ban on future participation by the company in J-1 programs.
"This upholding of AHA's revocation is not based on a negative assessment of the character or integrity of AHA or its principals," the ruling states.