March 27, 2008

Watch out for changing immigration laws

  • Contractors also need to overcome language and cultural differences to ensure safe job sites for their Hispanic workers.


    Given the construction industry’s need for labor and its established dependence on foreign workers, the impact of proposed immigration legislation could be substantial for the industry. Statistics regarding Hispanic workers in the construction industry underscore this fact. Despite uncertain immigration legislation, the significant role of Hispanics in construction is unlikely to diminish.

    In its analysis of government census and labor statistics, the Pew Hispanic Center found that in 2006 the construction industry employed approximately 11.8 million workers and Hispanics accounted for 25 percent or 2.9 million of them.

    Pew Hispanic Center statistics further suggest that Hispanic workers accounted for almost two-thirds, or approximately 372,000, of the total increase of 559,000 new construction jobs in 2006. Sixty percent of these new Hispanic workers are foreign-born immigrants who have entered the United States in recent years.

    Source: Pew Hispanic Center
    Hispanics make up 25 percent of the national construction workforce.

    While addressing the language and cultural challenges associated with managing Hispanic workers is already a top concern for many construction employers, recent statistical trends suggest these concerns are likely to become even more important in the future. Many managers and supervisors already recognize that language barriers seriously affect job-site productivity. However, progressive construction managers are also learning that unaddressed language barriers can have a serious negative effect on job-site safety, and unmet cultural differences can detract from worker morale.

    Universal adherence to and understanding of safety regulations on job sites is critical. More Hispanics are injured and killed on construction sites today than any other ethnic or racial group. The language barrier between Spanish-speaking workers and English-speaking managers plays an obvious role in this disparity.

    Numerous industry trade and professional associations are helping workers of all nationalities and languages prevent accidents by encouraging participation in the Occupational Safety and Health Administration’s Alliance program — one of many safety programs working to leverage safety resources and expertise for the benefit of the modern construction industry’s workforce.

    Where Hispanic workers are

    The geographic distribution of construction jobs for Hispanics is consistent with the overall distribution of the Hispanic workforce. In 2006, most construction jobs for Hispanics were located in the South and West; 86 percent, or 2.5 million, of the 2.9 million Hispanic construction workers were located in these two regions.

    However, the greatest regional increases in the numbers of Hispanic workers have been in the Northeast and South in recent years. These regions realized greater increases than did the Midwest and West between 2004 and 2006. The percentage of Hispanic construction workers in the South increased from 45.6 percent in 2004 to 48.3 percent in 2006.

    The shift in the geographic distribution of Hispanic construction workers may be explained by variations in the housing market across the different regions, according to the Pew Hispanic Center.

    Immigration legislation

    Congress discussed proposals for new immigration reform legislation throughout 2006 and 2007. The Senate’s immigration reform proposals have been more moderate, and have attempted to address U.S. economic dependence on immigrant labor as well as national security interests. Senate proposals call for a combination of increased border enforcement by Immigration and Customs Enforcement in conjunction with modern measures, such as guest worker programs and opportunities to earn citizenship for long-term undocumented immigrants.

    These moderate immigration legislation proposals in the Senate continue to face vehement opposition from legislators in the House, who favor more restrictive immigration policies. In the fall of 2007, no agreement had been reached on a comprehensive immigration bill, and partisan politics derailed immigration proposals throughout the regular congressional sessions.

    In a climate of legislative inaction, the executive branch of government has taken action through its administrative agencies. In addition to highly publicized Immigration and Customs Enforcement raids on facilities of those suspected of employing unauthorized foreign workers, the Department of Homeland Security enacted new rules in August 2007 aimed at increasing pressure on businesses that hire unauthorized immigrant workers. The new rules give employers 90 days to resolve no-match letters, which are the cautionary enforcement letters sent to employers indicating that their employees’ records do not match Social Security Administration records.

    However, for the time being, construction employers will not have to take action under the new rules since an Oct. 10, 2007, order from the federal court in the Northern District of California temporarily blocked their enforcement. The court’s order barred Homeland Security from enforcing the new rule until Social Security Administration hearings are held. Further, another federal hearing will address whether the new Homeland Security rule may constitute impermissible rulemaking by an administrative agency. At the same time, the Associated General Contractors, Associated Builders and Contractors and the American Subcontractors Association petitioned Homeland Security to increase the time to consider no-match letters from 90 to 180 days.

    The future of American immigration regulation remains uncertain. Construction firms should ensure that their internal compliance systems are adequate, and that they remain diligent regarding changes in immigration laws, which will likely affect them in coming years. Construction employers should also work to promote effective, realistic legislative solutions to the broken immigration system.

    Nicholas M. Schubert, Esq., is a consultant with the Denver office of FMI, management consultants and investment bankers to the construction industry. He is involved in both the Consulting and Research groups at FMI, and focuses on providing clients with targeted, relevant analysis to aid in strategic decision making.

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