New rules raise the bar on contractors who hire illegal workers

WAIPAHU—Earlier this month, Gov. Linda Lingle signed into law a bill that punishes contractors who hire illegal, undocumented workers in Hawaii. While the new law significantly ups the stakes for contractors who cut corners by hiring illegal workers, and addresses old legal loopholes, the Hawaii Civil Rights Commission warns that the law may influence contractors to discriminate against certain races. Proponents of the law, however, argue that it is a necessary step in levelling the playing field for legit businesses and workers.

The statute, now Act 185, could hold a contractor to the revocation, suspension, or nonrenewal of its license for knowingly or intentionally employing a person on any project who is not eligible to work in the United States under federal law. The law will be enforced directly through local licensing boards and the State Department of Commerce and Consumer Affairs.

The law comes at a time when jobs, affordable housing, and even benefits, are scarce. Nearly 54 percent of unionized carpenters statewide are unemployed, unions announced last week. Hawaii’s unemployment rate was 6.3 percent in June, with just over 40,000 people without jobs in the state, according to the U.S. Bureau of Labor Statistics.

The Hawaii Independent spoke with Rep. Henry Aquino, co-introducer of the bill, about why the new regulations are necessary for Hawaii’s workforce.

“This issue in the bill has been continuous from the last few years,” said Aquino, who represents House District 35—Pearl City and Waipahu. “I signed on this year to help push it through, but [contractors hiring illegal workers] has always been an ongoing issue ... The contractors that have hired illegal workers have gotten away with it. Since there were loop holes in the law in the past, there have always been ways to get away with it,” Aquino said.

A previous law, Act 145, subjected only contractors working on public construction projects affiliated with a government agency to licensing penalties.

The Hawaii Civil Rights Commission opposed the bill because it felt federal agencies were responsible for enforcing hiring laws.

However, under federal regulations, only the individuals who did the actual hiring or recruiting of illegal workers were prosecuted—allowing offending companies to continue with little or no repercussions, argued Mike Kido of the Pacific Resource Partnership (PRP) in testimony. PRP is a joint partnership of the Hawaii Carpenters Union and their 240 signatory contractors.

The Commission also said the addition of State-imposed penalties would result in contractors discriminating workers based on race.

“The proposed prohibition and license revocation create a likelihood of increased ancestral and national origin discrimination in employment,” the Commission stated in testimony. “If contractors face the serious penalties under state law as proposed, in addition to the sanctions faced under federal law, affecting their contractors’ licenses and livelihood, it will encourage them to avoid the potential penalties by not hiring workers who appear to be non-native, foreign-born, or immigrant. This will result in unlawful discrimination against those whose language, accent, or other characteristics are not typically ‘American,’ creating a climate of discrimination against immigrant workers.”

Aquino said that with the new penalties in place, all contractors will focus on hiring eligible laborers no matter what the ethnicity.

“Even though there is a concern about profiling, the passage of this bill really puts the hammer down to make sure companies ensure they hire legal workers and that the residents that pay taxes have the opportunity to work,” Aquino said.

Illegal workers themselves are also at risk on the job because they do not have insurance or legal protections against hazardous work situations.

Kido also explained that undocumented workers get paid in cash, thereby avoiding income tax contributions.

“Our fight is not against the illegal aliens who come here to try to make a living,” Kido said. “Our state is made up primarily of those who have come here at one time or another from other countries. Our cause is targeted against those employers who seek to ‘cheat’ our local people out of gaining employment and exploit illegal labor in these tough economic times for the sake of their ‘bottom line.’”

Despite the intended purpose of the law, the Hawaii Civil Rights Commission maintains that there are many Hawaii workers who are authorized to work who have neither a lawful permanent resident “green card,” a naturalization certificate, nor a U.S. birth certificate—including American Samoans (who are U.S. nationals), individuals from the Federated States of Micronesia (who enter under the Compact of Free Association), and political asylees (who may only have an order), as well as people who may have a pending immigration application or other form of documentation. The Commission said the most effective way to ensure a legitimate process is to strengthen and enforce protections against abuses, not to push immigrant workers
farther to the margins.

Ultimately, Hawaii lawmakers decided that the need to punish contractors cheating the system was key to protecting the few jobs available.

“Given the current economic climate and resulting unemployment rate in Hawaii, it is not unreasonable that the State should provide a level playing field for contractors who hire legally-employable workers, rather than continuing to license contractors who may be cutting corners by hiring workers who are not,” said Sen. Brian Taniguchi, chair of the Senate Committee on Judiciary and Government Operations, in his decision.

The new law, Aquino says, should have a significant impact on Hawaii’s construction jobs by creating more work opportunities for the qualified people.

Whether the new law in fact generates more job opportunities without creating further discrimination, only time will tell.

If you or someone you know makes a living in Hawaii working for contractors, The Hawaii Independent would like to know what your experience in the hiring process has been like. Please email [email protected].