How are audits and warrants impacting construction? What could trigger an investigation? How can you protect your business and stay cool? An AGC attorney has answers.
Bruce Buchanan, senior counsel at Littler Mendelson in Nashville, Tennessee, a member of multiple AGC chapters, has been practicing law for 43 years, the last 18 of which have been focused on immigration, though his specialty, even in that field, is rare among his kind: compliance.
It’s a field that has always included ICE audits, internal I-9 audits, IR (immediate relative) investigations and the like, but since Jan. 20 – when an executive order titled “Protecting the American People Against Invasion” was issued – Buchanan’s related to-do list has grown exponentially. This shift in his workload was not unexpected.
“I-9 audits and subpoenas have been around since the second Bush administration,” noted Buchanan. “The audits were carried on by Obama, averaging maybe 3,000 or 3,500 notices of inspection each year.”
President Trump, however, made it a focus.
“Year one they got it up to 6,500 and were seeking 12,000 when COVID hit,” said Buchanan, which curtailed this target.
“The Biden administration did the least of it, perhaps 500 … but as soon as Trump came back, even before he was inaugurated, they made it clear … they wanted to do 12,000-15,000 notices of inspection a year.”
The construction industry, with a history of undocumented workers, has always been considered vulnerable to ICE enforcement actions. So, what can AGC members do to proactively prepare for this possibility?
Having those I-9 (Employment Eligibility Verification) forms in good order is a start, says a southwest AGC member contractor, preferring to remain anonymous, whose company has had four audits in the past 15 years, but even then, your business could easily be impacted.
In the first, roughly 30 staff of his crew found themselves in the crosshairs.
“They were outstanding employees,” he said. “Some had been with me 15, 20, 30 years. I said, ‘What are you going to do, deport them?’ They said, ‘No, but you’re going to have to fire them.’”
Years later, recounting the tale, he still sounds incredulous.
“They went to work for my competitors for less money and were misclassified as independent subcontractors instead of W2 employees … and it’s happened all over the country across all different industries.”
It’s stupid, he said plainly.
“It took employees paying into the Social Security system and dumped them into the underground economy ….”
It’s not uncommon, in particular for smaller contractors, who might not be as on top of their required paperwork, said Buchanan. But he warns, notices of inspection can arise from just about any direction. His own resume has myriad examples.
A jobsite death that triggered an OSHA investigation, revealing that the worker was undocumented: ICE showed up the very next day.
A contractor, suspected of drug involvement, was discovered to have over $200,000 in cash in his vehicle. It turned out he used the money to pay his crew, all of whom are here illegally.
He’s seen wage-and-hour investigations lead to audits. High-profile hiring events showcased on the local news. Even angry exes, whose calls to government agencies prompted ICE to respond.
“Sometimes, it’s very difficult to figure out what could put you on the map,” Buchanan said, but adds they don’t spend too much time thinking about it, “because no matter why you’re being audited, you have to respond. Preventative medicine is better.”
Internal I-9 Audits
Some companies do it with paper. Larger ones usually employ an electronic system. But even those, he said, aren’t perfect.
“We always recommend to contractors that they do an internal I-9 audit, and we at Littler want to be a part of that.”
Immigration compliance attorneys can conduct or oversee the process. For smaller companies, 200 or less, he suggests, lawyers can handle the entire thing.
“If you have 1,000, you’d probably want to have us do a sampling, usually 25-33%.”
The larger the staff, the lower the sample size.
“After a certain number, it becomes cost prohibitive.”
A Formal Immigration Compliance Policy
Your company should have one, said Buchanan, who’s barely seen any in his 18 years in the field.
“It’s just a roadmap,” he explained. “Something you can refer to that’s a stepby-step approach.” This might also include a chart of staffers responsible for HR, legal and public relations, along with other compliance standards.
Additionally, enrolling in services like E-Verify, administered by SSA and USCIS, can help streamline the verification process.
ICE at the Door? Stay Cool.
Despite a company’s best efforts, said Buchanan, “you need to have a plan of action when ICE comes to visit.”
This goes whether they show up to conduct an audit or present the employer with an administrative or search warrant.
In an I-9 audit, agents are delivering a notice of inspection (NOI) and a subpoena, “but you don’t have to turn over any documents that day,” Buchanan said. “You have a minimum of three days and can seek an extension as well.”
Administrative warrants, which are not judicially issued, allow for the most flexibility.
“You can allow them on the site to find the individual they’re seeking or call that person up to the trailer. You can tell them you’re not going to honor it and wish them a good day.”
Some clients prefer a middle-ofthe-road approach. One in which they neither thumb their nose at ICE nor appear to be cooperative in front of employees. In these cases, “[employers] will not allow ICE onto the property, but will acknowledge that the person they are seeking is employed there and let them know when that person’s shift ends.”
There’s no perfect answer, which is precisely why that plan of action is so important.
“It could be that the foreman is the first person ICE encounters on the site when presenting their administrative warrant,” Buchanan offered. “You don’t want the foreman to be the one deciding whether to allow them to proceed.”
Having a procedure set and properly communicated to employees – “at the very least all the managerial employees,” he stresses – will ensure that the policy is carried out according to plan.
Raids
They don’t happen as often as the news might indicate, said Buchanan. “A lot of the things the press calls ‘raids’ are not actually raids,” he offered, “oftentimes the agents are just serving an administrative warrant.” But they do happen.
“The definition of a raid for an immigration compliance attorney is a situation where Homeland Security (HSI) are the ones running the show,” he explained. And it’s not something they can do without first making a case before a federal judge with evidence they’ve acquired.
“If the judge finds probable cause, they can do the raid – and there have been raids on construction sites,” though the audit scenario is far more likely.
Penalties
If, after a NOI, an investigation results in penalties or fines, another notice of intent will be issued. Contractors have the right to challenge it, and Buchanan always does, no matter how small the sum.
“You won’t be able to wipe it out completely, but based on the facts, you can bring it down to a better number, usually 20 or 30%. I got one down 70% earlier this year,” he said. “I think that’s my record.”
Though his experience with ICE audits has made that aforementioned contractor far more careful in his hiring practices, he knows nothing is foolproof.
“Someone could have a perfect fake ID, or someone else’s Social Security number,” he said, “but what we really need is a good, quality, hourly workforce if we’re going to build our companies. A company is only as good as its people.”
He laments the status of the Dreamers, “700,000 kids that we put through grade school, middle school, high school, that we spent all this money on who can’t get legal status, they can’t get a Social Security number, so they have to work off the books…. and the last thing we need to do is spend billions on deporting them.”
He’s seen instances, he said, where HSI raids have resulted in the execution of a valid warrant, but it’s followed by, ‘oh, by the way, while I’m here, let’s see your papers’ – and they’ll pick up two or three more. Collateral damage, they call it.”
It’s not too disruptive, he said.
“Not yet. But I think it’s coming. And I think the public will eventually say they’ve had enough.”
Ensuring the continuation of the Deferred Action for Childhood Arrivals (DACA) program, which has seen many challenges since the Trump administration attempted to rescind it in 2017, would be a step in the right direction, for the construction industry and for the nation.
“We need policemen. We need firefighters. We need people in our military. We need nurses and people to build highways and houses, to clean our buildings and do the landscaping and provide child and elder care.”
He’s all for rooting out the felons, he said, but most workers can pass background checks.
“If you take one million workers out of the underground economy and put them on W2 payrolls … they’re paying into the system. And if they’re going to work their whole lives building our country and not get anything at the end, that’s ridiculous.”
He’d rather see the country clear paths to those who deserve it than spend billions trying to round them up.
“If we were to say, ‘You can come in and get legal status if you follow these rules – background check, facial recognition, pay your taxes -’ they’ll come. You won’t have to go look for them.”