Weather, Congress Among Variables Likely to Affect Industry in the Year Ahead

As we move forward in 2019, the roofing industry can expect to be influenced by two sometimes out-of-control, difficult to predict forces: the weather and the United States Congress. Add to the equation a shifting economic outlook, as well as uncertain immigration policies, and you have a potentially toxic mix that makes any projection difficult. But there are some constants in the current environment that can help guide strategies for the roofing industry, and here’s our take on what to expect as this decade winds to a close.

There may be some limited success in tackling immigration reform, but don’t expect enough change to mitigate the labor shortage experienced by roofing companies. The Trump-promised wall has yet to be built, but actions to slow illegal immigration have been somewhat successful. The roofing industry has pressed for immigration reform; experts estimate that worker shortages account for up to 20 percent in lost roofing business each year, and sensible immigration reform could help end those shortages. The Center for Construction Research and Training, or CPWR, points out that in some construction occupations, including roofing, more than half of the workers are of Hispanic origin. So, the roofing industry certainly has a compelling case to be made for reform. 

Balancing the demand for secure borders against the need for additional workers has so far failed to produce meaningful legislation. Given the intense disagreement on how to move forward, 2019 will most likely be another year of bipartisan gridlock on this issue. The encouraging news comes from two areas of activity: innovations that promote ease of roofing installation, and industry efforts to certify roofing workers and increase the prestige of working in the trades. These efforts may help to recoup some of the business that has been lost because of the labor shortage, but only rational immigration reform will help to meet the unmet demand.

The weather may, in fact, be more predictable than the lawmakers who just assembled on Capitol Hill. Late in November of this past year, the Federal Government released the National Climate Assessment, the fourth comprehensive look at climate-change impacts on the United States since 2000. The Congressionally mandated thousand-page report delivered a sobering warning about the impact of climate change on the United States and its economy, detailing hownatural disasters are becoming more commonplace throughout the country and predicting that they may become much worse. 

While some may challenge the reality of long-term climate change, statistics tell us that short-term increases in cataclysmic weather events are an indisputable fact of life. And a temporary lull in these disasters cannot be taken as a sign of a change in weather patterns. For instance, as of early August this past year, the Tropical Meteorology Team at Colorado State University downgraded the forecast for the rest of the year, until November 1, from      “slightly above average Atlantic hurricane season” to less than anticipated. They were correct, for a while. No hurricanes formed in the Atlantic during the rest of August, making it the first season in five years without a storm of hurricane magnitude. But just as forecasters were declaring victory over unpredictable nature, Hurricane Florence delivered a pounding to the Carolinas in early September, and in October Hurricane Michael devastated much of the Florida panhandle. The erratic weather patterns did not stop at the end of the hurricane season: an early December storm dumped as much as a foot of snow on parts of the Carolinas that rarely see that much during an entire winter. So much for the predicted respite from extreme weather conditions.

The difficult-to-predict weather is creating one certainty for the roofing industry: customers will increasingly be looking for durable materials and systems that can withstand weather extremes. Additionally, the focus is turning to anticipating destructive weather and mitigating its potential impact by creating resilient structures. ERA has just produced its first annual report, “Building Resilience: The Roofing Perspective.” We anticipate updating this product each year to help provide the roofing industry with the latest approaches to creating resilient roofing systems. 

Unpredictable labor markets and unpredictable weather patterns are defining the “new normal” for our industry and will no doubt be part of our reality in 2019. But based on past performance, there’s at least one certainty we can count on: the roofing industry will come out ahead in the face of these challenges, providing our customers with innovative products and superior service and providing our employees with a work environment that ensures a secure future.

About the Author: Jared Blum is the executive director of the EPDM Roofing Association (ERA), www.epdmroofs.org, and serves as chair of the Environmental and Energy Study Institute. 

What Contractors Need to Know About E-Verify and IRCA

Because proper compliance with immigration law is complex, this article should not be construed as legal advice. Those seeking counsel about proper compliance with IRCA, E-Verify requirements, the Fair Labor Standards Act, or wage and hour laws should contact an employment attorney practicing in their state. For general questions, feel free to contact the author at ctrautman@andersonandjones.com.

Mention the word “immigration” in today’s political climate and be prepared for the conversation to take any number of turns. What starts as a friendly conversation could segue into a political debate about President Obama or Donald Trump, livening up or ruining a perfectly good Easter dinner.

But regardless of opinion or political identity, immigration law—and compliance therewith—is something about which most construction professionals should be talking. It is a necessary component of any employer’s operations and it is of particular concern to construction business owners. “Am I supposed to be E-Verifying my employees now?” and “How long do I have to store I-9 Forms?” are crucial questions for contractors.

At a minimum, it is essential for construction professionals to understand the basics of the Immigration Reform and Control Act (IRCA) of 1986 and E-Verify. By now, most business owners in the construction industry are familiar with E-Verify, as well as federal I-9 forms, which must be completed pursuant to IRCA. But with immigration reform becoming a hotly debated issue in the U.S., contractors should not only be prepared to comply with existing laws, they should also pay attention to what changes the future could hold.

IRCA

IRCA, a federal statute, makes it unlawful to hire “unauthorized aliens”, which the law defines as individuals who are not “lawfully admitted for permanent residence” or not otherwise authorized by the attorney general to be employed in the U.S. [8 U.S.C § 1324a(h) (2012)]. IRCA is the statute that requires all employees and employers to complete I-9 Forms; the employer must then retain the original forms during the employment of each active employee (and for three years after employees become inactive or are terminated). The statute’s intention is to require every employer, regardless of the number of individuals it employs, to verify all employees hired after Nov. 6, 1986, are authorized to work in the U.S.

As a practical matter, compliance with IRCA likely won’t ensure all employees are authorized to work in the U.S. However, correctly filling out the I-9 Form is crucial to avoid fines and other penalties from Immigration and Customs Enforcement (ICE), Washington, D.C. Employees and employers have obligations regarding the I-9 Form, so cooperation between both sides of an employment trans- action is key. Under IRCA, ICE has the authority to inspect I-9 Forms and conduct audits to ensure employers are complying.

Common, but often innocent, mistakes are made. For example, employers often fail to check the “status” box on the I-9 form or fail to have the employee sign the form. Also, inaccurate classification of employees as “active” or “inactive” can lead to trouble for employers who have stopped maintaining I-9 forms for employees who no longer work for the employer but who are still classified as “active”. Instituting company policies on what constitutes an “active” and “inactive” employee, as well as ensuring proper completion of I-9 forms, can help prevent ICE audits and the fines that could result.

E-VERIFY

Unlike IRCA, E-Verify is not a statute but an Internet-based system that allows businesses to determine the eligibility of their employees to work in the U.S. In many cases, E-Verify will more accurately determine an employee’s eligibility to work than the I-9 Form system under IRCA. E-Verify is available to all U.S. employers free of charge by the Washington-based U.S. Department of Homeland Security (DHS) but it gene- rally is not mandatory for employers.

Although E-Verify is technically voluntary, numerous states have enacted provisions requiring most employers to use E-Verify. These states include Alabama, Arizona, Colorado, Georgia, Idaho, Indiana, Florida, Louisiana, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Utah and Virginia. Additionally, pursuant to a presidential Executive Order and a subsequent Federal Acquisition Regulation rule, federal contractors—or those contractors doing business with the federal government—must use E-Verify.

Again, except in certain circumstances, enrollment in E-Verify is voluntary. Once enrolled, however, employers are required to post English and Spanish notices indicating the company’s participation in the program, as well as the Right to Work issued by the Office of Special Counsel for Immigration- Related Unfair Employment Practices, a division of the U.S. Department of Justice, Washington. These posters must be visible to prospective employees. To enroll, an employer simply needs to visit the E-Verify website and begin the process. Next, the employer enters into a written Memorandum of Understanding (MOU) with DHS and the U.S. Social Security Administration (SSA), Washington. This MOU provides the responsibilities of each party— employer/federal contractor, SSA and DHS.

BROADER ACTIONS

In recent years, President Obama and state governments have implemented changes to immigration law and policy that are impacting the construction industry. President Obama, in response to Congress not passing an immigration reform bill, announced a number of executive actions in November 2014. One such measure would allow certain undocumented immigrants to temporarily remain and work in the U.S. without fear of deportation. Because of pending litigation, this measure has not yet taken effect.

Although President Obama has attempted to prolong some immigrants’ ability to legally work in the U.S., several states have enacted legislation that could do the opposite. While the 19 states previously listed had made E-Verify mandatory for certain employers, some states have broadened the scope of situations requiring employers to use it. North Carolina, for example, had required all employers with 25 or more employees to use E-Verify as of 2013. But in October 2015, Gov. Pat McCrory signed into law a bill that requires all contractors and subcontractors on state construction projects to use E-Verify (N.C.G.S. § 143-133.3). The statute appears to require this without regard to a contractor’s number of employees, bringing North Carolina a step closer to South Carolina’s zero-tolerance policy for employment of undocumented immigrants.

In South Carolina, private employers who fail to E-Verify new hires could lose their licenses to do business in that state [S.C. Code Ann. § 41-8-10, et seq. (2012)]. The South Carolina law, and similar laws, easily could affect contractors from other states with more lenient policies; however, the South Carolina statute defines “private employer” to include any company transacting business in South Carolina, required to have a license issued by any state agency (including a business or construction license) and employing at least one person in South Carolina. Therefore, companies outside South Carolina that have a South Carolina office—or just one employee in South Carolina—likely will have to use E-Verify, which is becoming required in an increasing number of locations.

EMPLOYEE MISCLASSIFICATION

Importantly, E-Verify does not apply to independent contractors; companies that are required to use E-Verify need only verify the status of employees, not of independent contractors that contract with the company for work. This is noteworthy in light of another trending issue in the construction industry: employee misclassification. Employee misclassification occurs when a business wrongly classifies an employee as an independent contractor or vice versa. This is a violation of the federal Fair Labor Standards Act.

According to the U.S. Department of Labor’s (DOL’s) website, the DOL’s Wage and Hour Division is engaging in “strategic enforcement” to identify instances where companies are identifying workers as independent contractors even though they function like employees. Whether companies could be penalized for failing to E-Verify independent contractors who should have been classified as employees is unclear. However, it appears that eventually many employers will have to reclassify workers who are currently classified as “independent contractors” to “employees” to comply with federal contracts, state contracts or state laws that require use of E-Verify. It appears that this will inevitably result in employers being required to use E-Verify on an increasing number of workers.

NRCA Issues Statement about President Obama’s Executive Action on Immigration

The following statement is attributable to William Good, executive vice president of the National Roofing Contractors Association:

For many years, NRCA has consistently supported immigration reform that increases border security, improves workplace enforcement without burdening employers, provides an avenue for workers to enter the U.S. legally when our economy needs them, and addresses the problem of the existing illegal workforce in a balanced manner. NRCA believes immigration reform that addresses all these components is needed to fix our broken immigration system, end illegal immigration, protect U.S. workers and meet the economic needs of employers in the 21st century.

NRCA believes that for immigration reform to be successful in meeting the needs of the roofing industry, it is imperative Congress be the deliberative body that addresses this issue. NRCA is disappointed the House did not take up immigration reform legislation in the 113th Congress and urges the new 114th Congress to move expeditiously on immigration reform measures in 2015.

NRCA also is disappointed President Obama decided to move forward with unilateral executive action which can, at best, provide only a temporary and partial solution to fixing our broken immigration system. NRCA is further concerned the president’s executive action could cause significant difficulties for employers with respect to employment eligibility verification compliance and will be reviewing the executive order to determine potential effects on employers.

NRCA urges Congress and the Obama administration to work together to pass immigration reform legislation that meets the needs of employers and workers in the roofing industry as soon as possible.