CONSTRUCTION Accounting ARTICLE -
Crackdown on Illegal Hiring Loom s

Target Audience: Construction Industry Professionals, Contractors, Construction Business Owners, Construction Accountant Interest, Construction Management, Imigration Issues Interest, Illegal Worker Federal Government Provision Interest, Employment Regulations Interest

Almost 3 million Hispanic workers were employed by the U.S. construction industry during 2006, reports the Pew Hispanic Center. Of that number, 2.2 million were born outside the United States. Although it’s virtually impossible to quantify illegal immigration statistics, Pew estimates that 168,000 of 559,000 new construction jobs went to illegal workers that year.

Those numbers, based on U.S. Bureau of Labor Statistics and Census Bureau data, demonstrate that foreign-born workers are critical to the construction industry. Problem is, contractors often can’t — or don’t — verify that their employees are eligible to work in the United States. And Uncle Sam is starting to take more notice.

The Heat is On

As this article went to press, the federal government was proposing sweeping changes in employment regulations as part of its overall effort to stem the flow of illegal immigrants into the country. If the government prevails over a court challenge delaying implementation, you could be held personally responsible for hiring illegal workers — even unknowingly.

For instance, one new rule would require employers to fire employees whose Social Security numbers don’t match his or her name as listed on government records within 90 days of notification, unless the situation is corrected in that time. If the employer fails to terminate the employee, a fine of at least $2,200 could be imposed. Although it has always been illegal to hire undocumented workers, employers were not previously held liable for fraudulent documents.

Today, potential workers may offer any of 29 documents to prove who they are and that they are allowed to work in the United States. Passports, driver’s licenses, Social Security cards, children’s school or day care records, work permits, and birth certificates are among them.

Unfortunately, employers aren’t trained counterfeit investigators, and, all too often, forged or altered documents pass their scrutiny. The government seems to recognize this problem and is trying to reduce the number of documents employers may accept as proof of employment eligibility. A recent press release from the Office of the Press Secretary indicated that the sheer quantity of acceptable documents is an invitation to fraud.

Meanwhile, the Department of Homeland Security (DHS) intends to crack down on employers that have significant numbers of illegal workers on their payrolls. As of this writing, the DHS plans to increase civil fines levied against employers who knowingly hire illegal immigrants by 25% and expand criminal investigations of such employers.

Bottom Lines Threatened

Some construction companies in the Southwest, where the industry is particularly reliant on immigrant workers, have acknowledged losing as many as half their workers when Immigration and Customs Enforcement personnel examined their records, according to a Christian Science Monitor report.

If the courts uphold the government’s immigration control plans, you may find yourself in a similar situation — not only having a harder time hiring workers, but also having to lay off existing ones. This could present a direct threat to your bottom line as you struggle to timely complete projects and prepare bids for new jobs.

Dark Cloud, Silver Lining

As the cliché goes, every dark cloud has a silver lining. Now may be an ideal time to work with your attorney to review your current employees’ employment documentation and to develop better ways of detecting illegal workers.

Doing so may save you a number of legal headaches — and a lot of money — in the future.

Find out how our expertise in construction accounting can add value to your business. Email us or call us at 1 (888) 875-9770.

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