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Changes to Immigration Policies Could Impact Contractors



President Donald Trump promised a crackdown on undocumented people living and working in the U.S., which could impact contractors who hire them—unwittingly or not.

While a judge has blocked Trump’s executive order to withhold federal funding from sanctuary cities that don’t cooperate with immigration enforcement, if the injunction is lifted or if the administration finds other ways to force those cities to cooperate, the construction industry could feel the effects on its workforce, says Michael Kelsheimer, a partner at Gray Reed & McGraw LLP, a TEXO and Houston Chapter member, in Dallas.

“If those cities begin to more heavily enforce the immigration laws in order to keep their federal funding, then that will cut down on the number of undocumented workers available in and around those counties,” Kelsheimer says. “In some sense, people might say that’s a good thing, but whether people like it or not, undocumented workers will all disappear, and then there will be a shortage issue.”

In certain trades, such as concrete and masonry, there are already massive workforce shortages, says J.P. Vogel, another partner at Gray Reed & McGraw LLP in Dallas. When subcontractors in those trades become stretched trying to meet contractual obligations to finish projects on time while also starting additional projects, sometimes they might hire workers who are undocumented.

“In a majority of contracts, penalties are almost always associated with failing to complete work on time, and so many contractors choose to roll the dice and not verify whether or not their crew is documented,” Vogel says.

Another executive order signed by Trump calls for expanding the prosecutorial discretion of the U.S. Immigration and Customs Enforcement (ICE), as well as the hiring of more ICE agents, which could also impact the construction industry, says Phillip W. Pemberton, an attorney at Ogletree, Deakins, Nash, Smoak & Stewart P.C., a member of multiple AGC chapters, in Denver.

While the Obama administration criminally prosecuted employers and undocumented workers, the Trump administration is expanding prosecutorial discretion, in part by expanding the definition of ‘criminal’ for purposes of being deported, Pemberton says.

“Before there was a hierarchy under the Obama administration of what types of individuals would be considered a priority for removal, but now that hierarchy essentially has been nuked,” he says.  Now there is no priority—any felony case can be prosecuted. This also includes cases in which the person has committed the acts  to be charged, but not even convicted of the charge. For example, someone who fraudulently completes a Form I-9 but hasn’t been charged for those acts.” Prosecutorial discretion also includes going after people who have willfully misrepresented that they are in the U.S. lawfully, which means that the agency could expand that to anyone in the country that is undocumented, Pemberton says.

“But from a practical standpoint, that would cause a political firestorm, and we haven’t seen evidence of ICE going to the point of deporting every single undocumented worker,” he says.

If a contractor starts to suspect that they have unwittingly hired an undocumented worker, there is little they can  do about it until that worker gives them direct evidence, or evidence comes to the contractor in some way, that the worker is undocumented, Kelsheimer says. As long as the worker has properly completed the I-9 process at the beginning of employment, employers can’t subsequently ask them to provide extra information or the worker can file a discrimination claim.

The Form I-9 is the document that employers must complete for every employee to ascertain whether or not the person has a right to work in the U.S.

“This is not just to determine whether or not they are an undocumented worker, but it’s also to ascertain whether or not foreign-based workers with H-1B or H-2B  visas have expired,” he says.

An employer should terminate an  undocumented worker’s employment if the person confesses that they are undocumented  or if the employer finds out via  an audit by the Department of Homeland Security, a mismatch letter from Social Security, an unusual event in the workplace, or substantiated rumors, among other ways, Pemberton says. When in doubt about documentation or whether something could lead to knowledge that a person is in the U.S illegally, it is best to reach out to a competent immigration attorney.

It’s important to be sensitive to discrimination  concerns associated with undocumented immigrants, he says. “There are two train tracks—on the one side is ICE making sure no undocumented people are in the workforce, and the other is the Immigrant and Employee Rights Section of the Department of Justice trying to ensure that employers are not discriminating based on national origin,” Pemberton says. “Employers have to make sure they stay between those parallel train tracks so they won’t get into trouble.”

An example of what the DOJ would consider “document abuse” would be asking a person who has already produced the appropriate documentation to reproduce their green card to see if it has expired, he says. In addition, requiring an employee to complete a new I-9 form or running an employee through the E-Verify database again are examples of situations the DOJ investigates through its IER section.

“I recommend performing a self-audit every one or two years, just to make sure your employees and HR staff are properly completing the I-9 forms,” Pemberton says. “There can often be missing signatures or the certification section won’t be completed. Self-audits can really eliminate liability risk if ICE ever came in and performed an audit.”

Kelsheimer says a good I-9 compliance policy will control who completes the I-9 paperwork; mandate the timing to complete the I-9; outline the correct procedure and clarify incorrect procedures such as asking for additional information, accepting suspect documents, or preferring certain documents over others; arrange for the retention of I-9s; and mandate the re-verification of temporary employment authorizations. Contractors should conduct I-9 self-audits once a year to stay in compliance.

For even better compliance, Kelsheimer recommends E-Verify, an internet-based system that allows businesses to determine the eligibility of their employees to work in the U.S. Currently, employers have a choice whether or not to join the E-Verify program, but it will likely become mandatory at some point, he says.

Many employers currently don’t use the E-Verify system because they believe it’s inconvenient to get online and complete the package of paperwork to be enrolled, they’re comfortable with completing I-9 forms manually, or they’re just not aware of the E-Verify program, Kelsheimer says.

“But probably the most common reason is because E-Verify catches people that might have facially valid Social Security cards, driver’s licenses or visa documents, but the system’s database catches falsified documents—and that’s a problem for contractors who need workers and would rather just accept documents that are valid just on their face,” he says.

If contractors are audited by ICE, they have up to three days to prepare.

“The very first thing contractors should do is to call a lawyer who actually knows something about this, because their regular corporate lawyer may not have experience in this, and they will not be able to give the best advice,” Kelsheimer says.

Contractors then should conduct their own internal audit of both their I-9 documents and their I-9 compliance program and make any corrections before the government comes to review them, he says.

If it’s a raid, the government is going to show up unannounced with a search  warrant, Kelsheimer says. The first thing contractors need to do is to identify the agent in charge, get a copy of the search warrant, and call their lawyer—and have them on their way to the contractor’s office immediately. “They should keep their lawyer on the phone while the lawyer is on their way, and read the search warrant to them,” he says. “If there is a problem with the warrant, it’s good to know which agent is in charge, because then the contractor and their lawyer will know who to argue with.”

If there isn’t a problem with the search warrant, then contractors should exercise their right to remain silent, Kelsheimer says.

If contractors are fearful of a raid, they might choose to offer advice to their workers about how to respond to a raid, he says. This advice should be offered to all employees, not just the ones who might be undocumented.

“Singling out suspected undocumented workers could subject you to a discrimination claim,” Kelsheimer says.

He cited advice from the Maryland Court Appointed Special Advocates for employees who might have concerns when faced with an ICE raid: Stay calm and don’t run away, exercise their right to remain silent, refuse to sign any document without showing it first to a lawyer, carry all legal identification documents at all times, identify a well-qualified immigration attorney who can represent  the employee if issues should arise and keep the lawyer’s contact information handy.

While there has yet to be a “big crackdown,” there has been an increase of 10,000 new ICE personnel, and a tripling of I-9 audits is expected for 2017, Pemberton says. If contractors self-audit and have identified a large undocumented workforce, they would at least understand the risk to prevent further loss.

“They can then work on boosting their recruitment program in case there is an audit or raid while working to terminate their undocumented workforce,” he says. “The hardest part of replacing workers is the time element, so having a prebuilt plan and having recruitment methods in place can help to mitigate the risk associated with audits and raids is a best practice.”

If the Trump administration were to significantly crack down on undocumented workers, then the industry workforce would definitely shrink, Pemberton says.

“It may be one thing the Trump administration is considering—what the business impact would be if ICE targets specific industries for raids of undocumented workers,” he says.

AGC of America has long called for comprehensive immigration reform.

The association believes the current immigration system is broken. It provides little opportunity for legal immigration, has created a permanent underclass of undocumented workers, fails to utilize the latest technology to verify work status and has created a patchwork of ordinances causing uncertainty for employers who are trying to comply with competing federal, state or local ordinances.

To fix the system, successful legislation must strengthen national security, create a fair and efficient employment verification system, create a program for temporary guest workers to meet future workforce needs in the less-skilled sectors, and find a reasonable and rational way of dealing with the current undocumented population in the U.S.

AGC is also calling for the following actions:
• Any federal legislation must preempt the patchwork of conflicting and confusing state and local laws that has been adopted or could be implemented in the future. Employers should be subject to uniform standards regardless of worksite locations.
• Each company should be held accountable for their direct employees and not be subject to fines based on the hiring actions of their subcontractors.
• Efforts to change the procurement process and ignore current Federal Acquisition Regulation (FAR) procedures for federal contractors should not be part of any immigration bill. Efforts to do so
distort the procurement process, which was not set up to be an enforcement tool for other federal agencies.
• Any penalties for errors or non-compliance should be commensurate with the violation(s) and should exempt minor, first-time paperwork violations. Fines should be reasonable and capped.
• Construction employers want a reliable method of verifying the work authorization of new hires and they also want to be protected from liability for making a hiring or firing decision based on a government-mandated system.
• A new guest worker visa program should be established that is flexible and based on the needs of the marketplace.
• The H-2B visa program needs relief from the statutory cap by exempting returning workers who have followed the law from counting against the limit. The program needs to be more compatible with the distinct needs of the construction industry.