Stay Ahead: Managing Immigration Risks and Workforce Compliance in Construction

August 08, 2025

The construction industry faces new challenges in the realm of labor, employment, and immigration law. Since January 20, when President Donald J. Trump took office, significant policy changes have emerged. These shifts affect how construction companies comply with the federal government regulations while simultaneously sourcing a skilled, legal workforce to complete their projects. This alert will guide these companies through these challenges and offer practical solutions to help them navigate this evolving landscape effectively.

Policy Changes and Their Impact

President Trump's executive order on January 20 reshaped the enforcement landscape. For nearly 40 years, the federal government avoided enforcing employment-related immigration violations in schools, hospitals, and churches. Now, these areas no longer enjoy protection as “sensitive locations.” Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) now have more authority to identify and apprehend undocumented workers. This shift means ICE is more likely to visit worksites, including those in construction, to enforce federal immigration laws. These changes require construction firms to stay vigilant and informed about the latest policies to ensure compliance and avoid potential penalties.

Enforcement Actions and Government Resources

The first six months of the Trump Administration saw a significant surge in enforcement actions targeting various sectors, including construction firms, shipbuilders, and food suppliers. These industries faced numerous audits and raids as part of the federal government's intensified efforts to crack down on immigration violations. The construction industry, in particular, found itself under increased scrutiny due to its reliance on both skilled and unskilled foreign laborers.

ICE, now equipped with substantial monetary resources, expanded its operations by hiring more agents, auditors, and investigators. This influx of funding enabled ICE to conduct more frequent and widespread raids to achieve the federal government's stated goal to remove undocumented workers from the workforce. Additionally, recent policy changes have resulted in a restriction of the number of foreign laborers who can legally work in the United States through work permits. For instance, Temporary Protected Status (TPS) previously granted for certain nationalities, such as Hondurans, has been terminated limiting the availability of legal foreign labor.

These changes have significant implications for businesses, particularly in the construction sector. Companies must be vigilant in maintaining thorough and accurate records of their employees' documentation. Ensuring that all employees possess the necessary legal documentation to work in the country is not just a compliance issue; it is a critical business necessity given the current enforcement climate.

Construction companies must adopt proactive measures to safeguard their operations. This includes conducting regular audits of employment practices, staying informed about policy changes, and ensuring that all employees are legally eligible to work. By doing so, businesses can mitigate risks and better navigate the challenges posed by the current enforcement landscape.

Whistleblower Program and Employer Risks

The U.S. Department of Justice (DOJ) now actively encourages employees to report immigration violations through its newly established Corporate Whistleblower Awards Pilot Program (CWAP). This program represents a significant shift in enforcement strategy. It offers financial rewards to employees who come forward with information about their employers' immigration-related violations. Whistleblowers are eligible for up to 30% of the first $100 million in net proceeds recovered by the DOJ in successful enforcement actions, and 5% of any additional amounts.

Employers must recognize the potential for these whistleblower actions to not only result in financial penalties but also damage their reputation and disrupt operations. The prospect of confidential reporting, where employees can bypass internal channels and report directly to the DOJ, further complicates the situation.

To lessen these risks, employers should implement robust internal reporting mechanisms that encourage employees to voice their concerns internally before resorting to external channels. Creating a transparent and supportive environment can help address potential issues early, reducing the likelihood of external whistleblower claims. Employers should also ensure that their internal compliance programs are up-to-date and comprehensive, covering all aspects of immigration and employment law.

Training employees in the importance of compliance and the proper channels for reporting concerns is crucial. By educating the workforce on these matters, companies can foster a culture of accountability and diligence. Additionally, employers should conduct regular audits of their practices to identify and rectify any compliance gaps proactively.

By taking these steps, businesses can better protect themselves against the risks associated with the DOJ's whistleblower program, ensuring they remain compliant with federal laws while maintaining a positive and open workplace culture.

Responding to ICE Raids

Construction companies must be well-prepared for the possibility of ICE raids, which can occur without prior notice and have important implications for business operations, especially on a construction project. Establishing a dedicated response team is essential for managing interactions with federal agents effectively. This team should comprise individuals who are well-versed in the company's compliance processes and have the authority to speak on behalf of the business. The team should also be trained to understand the scope of any investigation and the specific requirements outlined in any warrants or subpoenas presented by ICE agents.

The response team should be prepared to assert the company's rights and protect its interests. This includes ensuring that the business retains copies of any legal documents, such as notices of inspection or warrants, and verifying their scope and validity. Team members should be familiar with the company's legal obligations and know the limits of assistance that is legally required. For instance, they should know that while they must comply with a valid warrant, they are not obligated to provide additional courtesies, such as meeting spaces or interview rooms, unless specified by the warrant.

Employees and employers must be educated about their rights during an ICE raid. This includes:

the right to remain silent
the right to legal counsel and
the right to refuse to assist ICE agents beyond what is mandated by law.

Employees should be informed about the potential dangers of fleeing during a raid, as this could lead to additional legal issues or safety hazards, particularly on construction sites where heavy machinery and equipment are in use.

By having a clear, well-communicated plan and trained personnel ready to respond, companies can minimize disruptions and maintain control during an ICE raid. This preparation not only protects the company's interests but also helps to reduce anxiety and confusion among employees. Having regular training sessions and drills can ensure that everyone knows their role and responsibilities and enhances the company's ability to handle such situations calmly and efficiently.

Employee Training and Compliance

Training is a critical component of maintaining compliance in the ever-changing landscape of labor and immigration law. Human Resources personnel and frontline supervisors must be well-versed in the latest compliance requirements to effectively manage their teams and ensure adherence to federal regulations. This knowledge enables them to identify potential compliance issues early and take corrective action before they escalate into more significant problems.

I-9 Compliance and E-Verify

The I-9 form, introduced in 1986 under the Immigration Reform and Control Act, remains a cornerstone of employment verification and compliance. It serves as a critical tool for employers to document and verify the identity and employment eligibility of their workforce. Employers are required to complete Section One of the I-9 form on the employee's first day of work. This section captures essential information about the employee, including their name, address, date of birth and employment eligibility status. Employers must then review and verify the supporting documents presented by the employee within three days of hire to ensure they genuinely relate to the individual and appear valid.

The verification process involves careful examination of documents such as passports, Social Security cards and driver's licenses. Employers must use a reasonable person standard to assess whether these documents appear to be authentic and relate to the employee presenting them. While employers are not expected to be document experts, they must remain vigilant for any obvious discrepancies or red flags that could indicate fraudulent documentation.

A complementary tool to the I-9 process, E-Verify is an electronic system that allows employers to confirm the employment eligibility of their workers through a federal government database. Although E-Verify is not mandatory at the federal level, its use is required by many states for businesses involved in public contracts. States like Florida, Tennessee, and Texas have implemented strong E-Verify statutes, making it essential for employers in these regions to integrate the system into their hiring processes.

By utilizing E-Verify, companies can receive prompt confirmation of an employee's eligibility to work in the United States. The system reduces the risk of hiring unauthorized workers and helps maintain compliance with immigration laws. Employers must sign a memorandum of understanding with the federal government to use E-Verify, agreeing to follow specific procedures and obligations.

Employers should stay informed about their state's specific E-Verify requirements and ensure compliance to avoid potential penalties and legal complications. Integrating E-Verify into the hiring process not only safeguards against non-compliance but also demonstrates a commitment to maintaining a lawful and reliable workforce.

H-2B Program for Legal Workforce

The H-2B program offers construction companies a legal and structured pathway to hire foreign labor, and address both skilled and unskilled workforce needs. Employers who can prove a temporary need for additional laborers can obtain certification to hire through the H-2B program. This program is particularly valuable in the current regulatory environment, where obtaining a reliable and legally compliant workforce is increasingly challenging due to heightened immigration enforcement and policy changes.

To participate in the H-2B program, employers must follow a multi-step process. First, they must post job orders to advertise the available positions to U.S. workers. This step ensures that the opportunity is first extended to American workers, aligning with the program's requirement to prioritize domestic labor. If no qualified U.S. workers are available to fill these positions, the employer can proceed to the next step.

The employer must then obtain certification from the U.S. Department of Labor (DOL), which involves demonstrating that hiring foreign workers will not adversely affect the wages and working conditions of similarly employed U.S. workers. The DOL certification is a crucial component, as it validates the employer's need for foreign labor and sets the prevailing wage rate that must be offered to H-2B workers.

Once the DOL certification is secured, the employer can petition U.S. Citizenship and Immigration Services (USCIS) for the number of foreign workers needed. After USCIS approval, the employer works with U.S. consulates overseas to secure visas for the selected workers. This involves coordinating with consulates in countries such as Mexico, Honduras, Costa Rica, Guatemala, and others, depending on where the labor is sourced.

The H-2B program allows workers to stay in the United States for up to 10 months, typically on a ten-month on and two-month off cycle. The cyclical nature of the H-2B visas provides construction companies with flexibility to meet seasonal or project-based labor demands, ensuring they have the necessary workforce to maintain productivity and meet project deadlines.

Employers leveraging the H-2B program must adhere to specific obligations, such as paying the prevailing wage and fulfilling the terms of the employment contract. While housing is not a mandatory requirement under the program, providing or facilitating housing options can enhance the attractiveness of the job offer and help secure a stable workforce.

Key Takeaways

Prepare for ICE Raids:
- Establish a Response Team: Designate a group within your management structure to handle government interactions during a raid. This team should include individuals who understand the company’s compliance processes and have the authority to communicate with federal agents.
- Know Your Rights: Familiarize yourself and your team with the legal rights of employers and employees during a raid. This includes the right to remain silent, the right to review and retain copies of any warrants, and the right to refuse assistance beyond legal obligations.
Train Employees:
- HR and Supervisor Training: Conduct comprehensive training sessions to ensure that Human Resources personnel and frontline supervisors understand the latest compliance requirements and can identify potential issues.
- Employee Awareness: Educate your workforce on how to respond during an ICE raid. Emphasize the importance of staying calm, not fleeing, and understanding their rights, such as the right to remain silent and the right to legal counsel.
Conduct Compliance Audits:
- Regular Reviews: Schedule periodic audits of your employment practices to identify and rectify any compliance gaps. This proactive approach can help mitigate risks and demonstrate good faith efforts to comply with federal regulations.
- Internal Reporting Mechanisms: Encourage employees to report any compliance concerns internally before they escalate to external authorities. This can help address issues early and maintain a culture of transparency.
Understand I-9 and E-Verify:
- Accurate I-9 Completion: Ensure that I-9 forms are filled out accurately and in a timely manner. Section One should be filled out on the first day of employment, and documents should be verified within three days.
- E-Verify Compliance: If you operate in a state where E-Verify is mandatory, integrate the system into your hiring process. Stay informed about your state’s specific requirements to avoid potential penalties.
Utilize H-2B Program:
- Legal Workforce Strategy: Consider the H-2B program as a viable option for sourcing temporary foreign labor. This program allows you to hire skilled and unskilled workers legally for up to 10 months.
- Step-by-Step Process: Follow the necessary steps to participate in the H-2B program, including posting job orders, obtaining Department of Labor certification, and securing visas through U.S. consulates. This investment can provide a stable and compliant workforce for your projects.

Please contact Brandon Davis or any member of the Phelps Immigration team if you have questions or need advice or guidance.