Some firms play loose with the law
Myung Oak Kim, Fernando Quintero and Laura Frank
Rocky Mountain News
Mar 2, 2007
It's the worst-kept secret in construction.
The industry is addicted to illegal immigrant labor - and many companies are using questionable, if not illegal, methods to feed the habit.
In some trades, such as drywalling, roofing and concrete work, at least a third of Colorado workers are believed to be illegal immigrants, according to local construction trade organizations and unions.
Many contractors are taking advantage of this labor force by hiring them off the books and paying them less than their U.S.-born co-workers - and sometimes not at all - say those in the industry.
The system is often fueled by labor brokers - middlemen who arrange deals with contractors to provide cheaper workers on short notice. These workers commonly are paid cash and rarely get workers compensation coverage or other benefits, even though state law says all workers, regardless of legal status, are entitled to workers comp benefits.
Companies also reduce their costs by classifying workers as independent contractors. That allows employers to avoid paying workers compensation insurance and payroll taxes. It also means they don't have to check the workers' identification and immigration status, according to federal immigration law.
In many cases, however, these workers don't fit the legal definition of an independent contractor.
"These companies are getting rich on the backs of undocumented workers," said Gustavo Maldonado, a local union organizer with the Carpenters' District Council of Kansas City & Vicinity, which includes Colorado.
"The workers are seen as the problem, but it's the companies that lure them to these construction jobs, pay them cash, or not pay them at all. It's not fair to the industry, and it's not fair to the workers," he said.
Losers in the system
In Colorado and across the country, the construction industry is booming while the percentage of U.S.-born construction workers is dropping, federal labor studies show. As a result, employers are struggling to find workers to keep pace with the demand.
The gap is filled largely by a steady influx of young men from Mexico and Central America, many of whom are in the country illegally.
When employers take advantage of workers' undocumented status to withhold pay, the employees often have little recourse.
Lucas, a 45-year-old Denver father of five, said he was paid only half what he was promised for installing roofs at housing projects in the Denver area in 2005.
Lucas, an illegal immigrant who spoke to the Rocky Mountain News on the condition that his last name not be used, is more fortunate than many. After an unsuccessful attempt to take the employer to small claims court, he found lawyers through Centro Humanitario Para Los Trabajadores, a Denver day labor center, who sued in Douglas County Court. The lawyers negotiated a $9,000 settlement in December.
"I didn't really know what to expect, and I didn't completely understand the legal process in the beginning," said Lucas. "But in the end, I'm glad I went through with it. I've always believed in justice and in the basic civil rights of people and workers."
Harold Lasso, who runs the center's legal clinic, said about 75 percent of those who seek help are construction workers who report being underpaid or not paid at all. He takes about 10 such cases a month.
Workers are not the only victims of this off-the-books system. Communities miss out on tax dollars. Hospitals wind up treating injured workers who otherwise would be covered by workers compensation, and those costs get passed along to taxpayers or to insured patients through higher premiums.
The system also puts legitimate businesses at a disadvantage. Companies who don't pay taxes and workers compensation insurance can bid lower on projects and still make a sizable profit.
Lax enforcement
Labor unions, businesses that follow the law and construction trade organizations have been crying foul for years. They say they've reported shady firms to government agencies. But enforcement has been weak.
The U.S. Department of Labor can pursue, on its own, civil violations of labor laws and commonly nabs companies for failure to pay overtime wages. The agency also can seek criminal charges with the help of the U.S. Attorney's Office and, in immigration cases, with U.S. Immigrations and Customs Enforcement.
No criminal charges related to labor practices have been filed against Colorado construction firms in at least a half-decade, according to a spokesman for the Denver U.S. Attorney's Office.
Last year, the federal Labor Department completed six civil investigations against Colorado companies accused of wage violations. One involved a construction firm.
In October, the agency ordered Discount Max Construction, a residential and commercial builder in Pueblo, to pay $123,927 in back overtime wages to 52 low-wage workers. It's unclear whether those workers were immigrants.
The state Department of Labor and Employment recently referred the investigation of a construction firm that has been the target of repeated complaints about wage violations to a local district attorney's office for possible prosecution, a spokesman said.
The department said it cannot give details because of the pending action. It is not clear whether the complaints involve immigrant workers.
Alex Salaiz, district director of the U.S. Department of Labor's Wage and Hour Division in Denver, said it's unreasonable to monitor every employer.
"It works on an honor system. Not everybody gets their taxes audited. You just expect taxpayers to comply and be truthful," he said.
As with many public agencies, Salaiz said, the Labor Department needs more money to step up enforcement.
"We do the best with the resources we have," he said.
Immigration officials say they rounded up more than 4,300 workers in raids nationwide last year. But only a handful of managers have faced charges. In the few known construction investigations, no top-level general contractors have faced charges.
In Colorado, construction sites have largely escaped immigration crackdowns or scrutiny of their hiring practices. An immigration raid in September at a housing construction site outside Buckley Air Force Base stands out as the exception.
