Undocumented workers play a critical role in the American construction industry in which 80% of firms are currently having difficulty finding enough workers. However, current US immigration laws are driving undocumented workers to work in the underground economy as independent contractors, where they then often seek work from American employers who misclassify workers by calling them subcontractors in order to avoid paying workers comp, overtime, and payroll taxes. This cheats workers out of benefits and wages and gives unscrupulous employers an unfair advantage against legitimate employers playing by the rules.
My good friend and COO of MAREK Mike Holland recently highlighted this issue well on an NPR radio segment titled “Undocumented But In Demand: Immigration And Labor In America.”
“We recently have become an E-verify employer, but it’s not foolproof. It’s a filter that may be better than no filter, but it certainly doesn’t catch them all, then we have to let the worker go…and they go to work for someone else. In many cases in our world, they go to work in the underground economy of independent contractors…in the construction industry, for close to half of commercial construction and almost all of residential construction there is not a W2 employee on a house or on an apartment. And so all you have to do is get on the internet to get an employee tax ID and you can work as an independent contractor. So you’ve got employees, or workers effectively, exploiting the system and not paying taxes, you’ve got others who cannot access the workforce. The problem has been going on for decades now and it fails to address the economics of our industry and country,” he said.
Holland also explained that although the construction industry is improving its training and recruitment practices, it’s still experiencing labor shortages.
“We have a graying of the industry and the country in general, and what we’re seeing is outbound three or four workers for every one that’s coming in and all the workforce problems that that might imply... …The industry is working hard to have more effective employment practices and there are great programs here in Texas and Houston, the Construction Career Collaborative, and our [Greater Houston] Partnership has the Upskill initiative. So there’s a great deal of focus on inbound workers and addressing the skills that are changing so quickly in our economy. The problem is it’s difficult to articulate a career path if there’s not a sustainable supply chain of workforce. Given the amount of undocumented workers in the construction industry, many of those are workers that legitimate employers do not have access to. They cannot become W2 employees and therefore they operate in the shadows as independent contractors,” he said.
Sensible immigration reform could help solve both of these problems.
If Congress would create a method for undocumented workers to earn their legal status, then the government could ID and tax them properly, and law abiding tax paying employers could hire them.
The process should require undocumented immigrants to provide a positive ID, pass a criminal background check, agree to work only for employers that deduct and match taxes, and agree to go to the “back of the line” to apply for citizenship.
Please continue to contact your lawmakers and ask them to support sensible immigration policy.
God bless you, and may He continue to bless America.