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A Patchwork Quilt of Compliance
Myriad state immigration laws create a very messy compliance scenario for contractors
By Mary Buckner Powers
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| Contractors must comply with individual state laws, which often conflict with each other now that federal immigration legislation is not likely to be passed before the presidential election. (Photo by Tom Spitz Photography, Courtesy of Sundt) |
hanges in federal immigration laws seem unlikely this election year, which means contractors must continue to deal with states trying to address on their own the issue of undocumented workers.
Last fall, 1,500 pieces of legislation were introduced in the 50 states dealing with immigration, says Kelly Knott, the Associated General Contractors’ director of government affairs for labor, safety and risk management. Not every state has passed laws on its own, but the conflicts among those that have and the angst the laws have caused contractors reinforce the need for one unifying federal law. Says Knott, “It’s a mess.”
States’ Rights?
One example Knott cites is Illinois, which passed a law in August that the Dept. of Homeland Security says “effectively” prohibits employers from using the federal government’s Employment Eligibility Verification System, or E-Verify. Arizona, on the other hand, requires contractors to use E-Verify.
“At some point, a contractor is in violation of some state law,” Knott says.
Illinois has felt the wrath of the federal government for its attempt to go it alone. Its law, which was scheduled to go into effect on Jan. 1, 2008, prohibits employers from using any verification system until that system can accurately determine a job applicant’s legal status 99% of the time. The state claims E-Verify is flawed and its database is full of errors.
DHS, which maintains E-Verify, filed a legal action against the state and asked that the law be declared illegal. In December state officials agreed not to enforce the law until the lawsuit is resolved.
In Arizona, a federal judge in February refused to block enforcement of a state law that penalizes employers who hire illegal immigrants, while opponents appeal their case to the 9th U.S. Circuit Court of Appeals.
The law took effect on Jan. 1. All state business owners risk losing their state and local licenses if they knowingly or intentionally hire undocumented workers. Licenses can be suspended for up to 10 days if an employer knowingly hires an illegal worker for a first offense. For all second offenses, licenses will be revoked.
The law is to be treated as a “law-enforcement priority,” which means prosecutors must review every complaint, and the attorney general must compile a public database of employers who violate the law. The statute requires all employers in Arizona to use E-Verify to check the legal status of newly hired workers.
Sundt Inc., Tempe, has been verifying new hires through E-Verify for eight years. “We were part of the pilot,” says Wayne Oliver, Sundt’s director of corporate compliance and diversity. Sundt used E-Verify in California originally and in other states where the firm had jobs, and “we found it to be a good program,” he says.
It is the possibility of having their business license taken away that has the contractors in Arizona upset, Oliver says. “That’s tougher than the federal law,” he adds. “The federal government will debar a company and not allow it to bid on federal projects, but it doesn’t take their license to work away.”
Sooner Exodus
Oklahoma’s constitution says that immigration is a federal issue, but that did not deter the state’s legislators, says Dick Anderson, executive vice president of AGC of Oklahoma’s building chapter.
The law there is considered to be one of the toughest in the country. It requires employers to check new employees’ legal status using E-Verify and makes it illegal to knowingly provide employment to illegal immigrants, or fire a legal resident and allow an illegal immigrant to stay on the job. It also makes it a felony to transport an illegal immigrant.
The new law has caused illegal immigrants to leave the state, but it also has caused many legal workers to leave, Anderson says. “The Hispanic community perceives that it will cause a wholesale roundup of workers who will be sent back to Mexico,” he adds.
Some legal workers worry that their illegal family members might be caught up in the crackdown, and many have packed their bags and moved to neighboring states, Anderson says.
About 20% of the total workforce in Oklahoma is Hispanic. That number excludes the licensed trades, according to Anderson.
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| A Colorado state law exempting some municipalities from immigration verification compliance keeps Gould Construction from bidding work in its hometown of Glenwood Springs. (Photo courtesy of Gould Construction Inc.) |
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| Contractors in Arizona risk losing their business license if they knowingly or intentionally hire undocumented workers. Companies must verify a worker’s status with DHS's E-Verify. (Photo by Tom Spitz Photography, Courtesy of Sundt) |
Larry Creekmore, president of paving contractor Creekmore Builders, Tulsa, says the number of applicants to work for his company has dropped 70% since the new law went into effect in November. The number now has stabilized, he says. “The problem is there are not a lot of Americans stepping up to fill these jobs,” Creekmore adds. “We’ve run ads and we’re not getting responses.”
An estimated 12,000 of about 60,000 Hispanic residents have left Tulsa, says Xaviera Nadia, a construction executive and Hispanic Chamber of Commerce member. “The new law has caused people to be living in fear,” he adds. It was well intended but not well thought-out, Nadia says. “It tried to address a federal issue, and the outcome was bad.”
The law went into effect in November for state construction jobs. It will take effect on July 1 for private jobs.
Utah has used the Oklahoma law as a model for proposed immigration legislation, and others consider it a benchmark for immigration reform, says Oklahoma AGC’s Anderson.
Under Georgia’s new immigration law, the requirement to verify the legal status of workers is being phased in through 2009. The conflict there is Gwinnett County in suburban Atlanta, which passed an ordinance that makes contractors responsible for their subcontractors’ employees. A contractor must direct its subcontractors to fire anyone whose legal status cannot be confirmed with a verification system.
“We have no means to verify them,” says Mark Woodall, director of government affairs for AGC’s Georgia Branch. The chapter and Georgia Utility Contractors Association filed a lawsuit against the county.
Colorado has an unusual circumstance. State law there requires all contractors that work for any state or local government agency use E-Verify to certify a newly hired employee’s legal status. The problem is that some municipalities and counties are self-governing and do not have to follow the state’s verification law.
“We have a bumpy playing field, with some [players] that have to follow the rules and others that don’t,” says Mark Gould, president of Gould Construction, Glenwood Springs. Because Gould uses E-Verify for its work with government agencies that require it, the company must use it for every job.
“Once you get into the system, you have to verify every employee,” Gould says.
Gould’s biggest worry is in counties and municipalities with home rule and on some private jobs where his firm must compete with companies that do not verify their workers. Although Gould is located in Glenwood Springs and has built many projects there, he no longer bids work from the city because of its home-rule status. “It’s kind of crazy,” he says.
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| Sundt Construction, which has a new headquarters in Tempe, Ariz., has no problems using EVerify.It participated in the pilot program and has used the federal system for eight years. (Photo by Liam Fredrick Photography, Courtesy of Sundt) |
Thousands of workers, both legal and illegal, fled Oklahoma when it passed a law making it a felony to transport an illegal immigrants. (Photo by Tom Spitz Photography, Courtesy of Sundt) |
Gould has been criticized for his public stance on immigration reform. He has commented often about his frustration at not being able to hire U.S. citizens to do hard labor.
“The immigrants are here only because there are not enough workers in the U.S. to do the jobs,” he adds. “We are having a tough time filling positions. It’s about the availability of semiskilled workers, the guys at the end of the shovels.”
Gould favors complete immigration reform. “It’s terrible to have a hodgepodge of state laws,” he says. “We just want a good supply of safe workers.”
Exactly What Are Employers Responsible For?
hile the country descends into a patchwork of inconsistent requirements with little hope of a federal resolution before the presidential election, there are steps contractors should follow to help them stay out of trouble, says Otto Immel, a labor attorney with Quarles & Brady’s Naples, Fla., office.
Immigration and Customs Enforcement is expected to issue a modified version of its earlier “Safe-Harbor” rule, which attached a hefty penalty, up to $5,000 per employee, for employers who fail to resolve “no match” letters from the Social Security Administration.
Those letters inform employers that a name and a number do not match in their records. A federal court agreed with opponents in October that the Social Security database is full of errors and stopped the agencies from implementing the rule. Social Security stopped sending the letters.
Until recently SSA would send out no-match letters, but there was no requirement to do anything about it. Now it is uncertain when and what the requirements or the penalty will be, but Social Security was to begin sending out no-match letters again in March. “Our advice at this point is to do some part of what those regulations required,” Immel says.
Once an employer receives a no-match letter, it important to check the company records to make sure no errors were made on the I-9 new-hire verification submission to the agency. “It’s an easy fix and one that every employer should make. Often, there are typos or transpositions of numbers,” Immel says.
If there is no error, the employer should tell the employee that Social Security found a mismatch and advise the worker that it is important to correct the mistake. “Give him a deadline, 90 days or so, to verify his status,” Immel says. If an employee does not do that and used a Social Security card for his original I-9 verification, then it is smart and reasonable to ask the worker to prove his status without a Social Security card, Immel says.
“It shows the government that the employer is making the effort to show it has a legal workforce,” Immel says.
The best way to minimize risk is to have a thorough, diligent, I-9 process in the first place, Immel says.
There are areas in which employers make common mistakes, such as not completing the form or attaching photocopies when originals are requested, he says.
“Employers are not supposed to be the police. If a worker has what appears to be good documents and has gone through the I-9 process, an employer has met his obligation,” Immel says.
The only remaining issue is having an employee that the federal agency may say an employer should have known was illegal.
“The law says if you know a worker is not legal, it does not matter what documents they show you. There is no safe harbor for knowledge of illegality,” Immel says.
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