This article is a component of “The Dotted Line” series which provides a comprehensive examination of the complicated legal structure of the construction industry. To see the entire series visit this link.
In May, Florida Gov. Ron DeSantis signed into law an obligation that private firms that employ more than 25 people use the federal E-Verify information system to verify that their employees are legally authorized to work within America. United States.
That’s led to a massive wave of worry and uncertainty for leaders in the construction industry who worry that the already small workforce could be further eliminated. Reports of abandoned job sites in Florida during the months following the law’s passing increased the concerns.
“There’s a lot of fear among the unauthorized immigrant population about what the law means for them, and I’m sure their employers are getting nervous as well,” Madelin Zavodny who is a labor economist who is also a professor at the University of North Florida, explained to Construction Dive.
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According to the National Conference of State Legislatures, twenty-two states now require E-Verify use by all or some employers. For construction firms, finding employees in a field with more than 383,000 job openings became more difficult for construction firms.
Alex BaghdassarianCourtesy of Hanson Bridgett
“It’s already difficult to find good, eligible contractors who have time to take on projects,” said Alex Baghdassarian, a partner at Hanson Bridgett in Los Angeles. “To the extent those contractors are impacted by having to comply with this provision, that ends up having a trickle-down effect on the consumers that utilize their services.”
Utilizing the system
E-Verify is a federal online system that permits employers to confirm whether employees are eligible who are eligible to be employed at a job in the U.S. It scans simultaneously Social Security and Homeland Security data and also images of people to determine if they are a match or flag those who don’t appear to be authorized work in the United States.
Mark NeubergerPermission granted by Foley & Lardner LLP
“The E-Verify system is free, and normally you get a response almost instantaneously,” said Mark Neuberger, an employment lawyer and attorney at Foley & Lardner in Miami. “But it puts an added burden back on the employer if they don’t get the green light to do additional diligence on the employee.”
This system is more stringent than the usual requirements for Form I-9, the verification of eligibility to work, as employers are required to keep copies of the documents submitted by applicants instead of simply looking at them.
“That makes it easier for a governmental agency to audit for fraud,” Neuberger stated about the requirement of keeping copies. “While employers themselves don’t have to be fraud examiners, when you see a Social Security card with white out on it and the numbers are changed or the name is changed, that’s a problem.”
Although the Federal system has been in effect since 1996 and has always applied to firms working under federal contracts, different state regulations mean that smaller private subcontractors could be covered as today, too. They might need to be made aware of the stricter regulations or the process they must adhere to to comply with them.
This could create a massive problem for prime contractors, lawyers suggest. While E-Verify’s requirements do not apply to independent contractors who work for a business, Construction lawyers offer that general contractors should ensure that their subcontractors have done everything they can to comply with the law to the letter.
“The government can get pretty creative in imposing liability for this legal concept of being a joint employer,” said Penni Bradshaw, who is a co-chair and partner in the group’s immigration practices at Constangy, Brooks, Smith & Prophete in Winston-Salem, North Carolina. “It’s an issue that comes up frequently when you bring in subs.”
Consequences of getting it wrong
Fines that have recently increased in response to rising inflation are up to $27,000 per employee for employers who are knowingly hiring an employee who is not eligible. Federal qualifications still apply even in states that do not require private companies to use E-Verify, like California and Washington.
“That doesn’t mean California contractors can willy-nilly employ workers that aren’t eligible to work in the United States,” Baghdassarian said. “By doing so, they would be subject to federal enforcement action and then potentially action by California’s Contractors State License Board.”
Although criminal and civil penalties are possible, The state’s agency can cancel contractors’ licenses.
“That’s probably the most onerous situation, where the CSLB can decide to disbar a contractor, basically making them ineligible to perform construction work,” said Baghdassarian.