Author: Kayla Schoenberg

Navigating Increased Immigration Enforcement at Construction Sites

Federal agencies, including Immigration and Customs Enforcement (ICE), have ramped up inspections and penalties for employers suspected of hiring undocumented workers. This increased scrutiny means that contractors, even those not directly targeted, face risks from raids aimed at detaining and deporting undocumented immigrants on construction sites. It’s crucial for both general contractors and subcontractors to understand how these raids are conducted, the different types of warrants involved, and the best practices for responding and mitigating risk.

The Shift in Enforcement

A new executive order, “Protecting the American People Against Invasion,” has refocused immigration enforcement since January 20, 2025. This has led to a greater likelihood of construction contractors becoming the subject of ICE raids. The Attorney General has issued policy guidance requiring federal agencies like ICE to investigate and prosecute immigration-related crimes. These efforts target not only individuals without legal status—particularly those with criminal affiliations—but also employers and contractors who knowingly hire or harbor undocumented workers.

How ICE Raids Are Conducted

Raids are planned meticulously and often based on intelligence or ongoing investigations. Here’s a breakdown of the typical process:

• Initiation and Entry: Raids begin with agents arriving in uniforms or body armor. They will present a judicial search or arrest warrant to legally enter non-public areas of the worksite. Employers should verify the warrant’s validity and ensure the site is safe for agents, shutting down any dangerous construction activities.
• Site Control: Agents will secure the site, restricting movement to prevent interference. Employees may be separated for questioning.
• Search and Seizure: Agents will search the site and seize documents or electronic records that fall within the scope of the warrant.
• Employee Interviews: Agents may interview employees, but they cannot do so on an employer’s premises without a warrant. Employees have the right to remain silent and request legal representation, a right that contractors should ensure their workers understand beforehand.
• Post-Raid: After the raid, ICE provides an inventory of seized items. Employers should document all agent activities to create an accurate record for legal review.

Understanding Warrants

ICE agents use different types of warrants, and knowing the difference is critical for a proper response.

• Judicial Search Warrants: Issued by a federal judge, these warrants give agents the authority to enter private property and seize specific items without employer consent. Compliance is mandatory.
• Judicial Arrest Warrants: Also issued by a judge, these warrants authorize ICE to arrest specific individuals. Employers must comply and should not interfere.
• Administrative Warrants: These are signed by an administrative official, not a judge. They do not authorize entry into private property without the employer’s consent. Agents can only search public areas like parking lots. This distinction is crucial for determining your legal obligations.

Best Practices for Contractors During a Raid

Preparation and a clear plan are essential.

• Stay Calm and Comply: Agents will be armed and will secure the site. It’s important for both employers and employees to follow instructions and not obstruct the enforcement actions.
• Verify the Warrant: Immediately request and review a copy of the warrant to understand its scope and whether it is a judicial or administrative warrant.
• Contact Legal Counsel: Notify your legal counsel immediately so they can review the warrant and advise on the proper course of action.
• Do Not Interfere: Do not physically or verbally challenge agents. Hiding individuals or evidence could lead to legal consequences.
• Document Everything: Keep a detailed record of all agent actions, seizures, and interviews.
• Protect Employee Rights: Remind employees of their right to remain silent and request a lawyer before answering questions.
• Resume Operations Cautiously: Only resume work after agents have left and the site is confirmed safe.

Proactive Measures to Mitigate Risk

The best defense is a good offense.

• Robust I-9 Compliance: Conduct regular internal audits to ensure compliance with federal employment verification laws. Train HR staff on proper I-9 form procedures while ensuring your hiring practices are not discriminatory.
• Develop a Response Plan: Create a clear plan for how to handle a raid. Train supervisors and key personnel, establish a communication chain (including legal counsel), and inform employees of their rights.
• Consult Legal Counsel: Proactively work with legal counsel to review your employment practices and stay current on regulatory updates.

Conclusion

Contractors must be prepared for potential ICE enforcement actions. While the laws haven’t changed, the enforcement priorities have intensified, making compliance more critical than ever. By implementing these proactive measures and best practices, contractors can protect their businesses, employees, and project timelines from significant disruption.

The Chains Are Tightening: Why This “Independent Contractor” Law Threatens to Collapse Minnesota Construction

The ink is barely dry on the latest legislative “achievement,” and already, the Minnesota construction industry is reeling. We’re not just talking about a new compliance hurdle; we’re staring down a legislative freight train designed to derail legitimate businesses, choke off opportunities, and fundamentally dismantle the way our industry operates.

Let’s be clear: This isn’t just a tough law; it’s an impossible one. It’s a regulatory boa constrictor, slowly but surely squeezing the life out of Minnesota contractors and the skilled tradespeople who drive our economy.

The new “Independent Contractor” test isn’t a guideline; it’s a trap. It demands that an independent contractor meet ALL FOURTEEN RIGID CRITERIA, a feat so challenging it renders true independent contracting virtually unworkable in our industry.

Let’s break down the absurdity:

The Illusion of Independence: How Many Businesses Can Truly Pass This Gauntlet?

The law starts by requiring a “Legitimate and Separate Business,” demanding independent contractors own, rent, or lease all their equipment, tools, materials, and even office space. It mandates they provide services for multiple people – a standard that ignores the realities of specialized trades or larger, long-term projects where a highly skilled independent contractor might dedicate themselves to one primary client for a period.

Then come the bureaucratic hoops: Federal EIN, Minnesota tax ID, 1099s, self-employment taxes, W-9s, Secretary of State good standing, a Minnesota Unemployment Insurance account, and workers’ compensation coverage. While some of these are standard for legitimate businesses, the sheer cumulative burden, combined with the other requirements, creates an almost insurmountable barrier, especially for smaller independent operators.

The “Legitimate Contract” – A Blueprint for Disaster

This section is where the law goes from challenging to outright destructive. Imagine the scenario:

• “Compensation on a commission, per-job, or competitive bid basis and NOT ON ANY OTHER BASIS.” This single line guts established industry practices. What about hourly rates for specialized consulting? What about time-and-material contracts for unforeseen issues? This rigid demand flies in the face of how complex construction projects are managed and compensated. It forces legitimate businesses into payment structures that simply don’t fit every project or service.
• “Submits invoices and receives payments in the name of the business entity NO CASH.” While promoting transparency, this also overlooks the practicalities for many smaller contractors or those in specific situations where cash payments might be a legitimate and agreed-upon method, particularly for immediate needs or smaller jobs.
• “The independent contractor incurs the MAIN EXPENSES and costs relating to services under the contract.” This is perhaps the most egregious attack on industry standards. In construction, it’s common for general contractors to supply the majority of materials for efficiency, bulk purchasing power, and quality control. This provision essentially outlaws that fundamental practice, shifting an enormous financial burden onto individual independent contractors who may not have the capital or logistical capacity to bear it.

The Perilous “Contracting Chain” and Unprecedented Liability

Here’s the real gut punch: the law places the employment relationship responsibility squarely on the employer of any worker performing services in the contracting chain below, unless every single intervening business entity and contract meets this impossible test.

This means you, the general contractor, the subcontractor, the specialized trade – are now directly liable for the compliance of every single entity and individual down the line. One misstep by an independent sub-sub-contractor, and you, the prime contractor, are on the hook. This isn’t collaboration; it’s collective punishment for an unachievable standard.

The Penalties: Financial Ruin and Criminalization of Business

The penalties are not merely deterrents; they are instruments of destruction designed to obliterate businesses and individual livelihoods:

• Individual liability: Owners, partners, principals, officers – your personal assets are now on the line.
• Compensatory damages: Supplemental pay, benefits, employer contributions to unemployment, Social Security, Medicare – essentially, you’ll be forced to retroactively treat contractors as employees, paying out sums that could bankrupt a thriving business overnight.
• Hefty Fines: Up to $10,000 per misclassified worker, plus $10,000 per violation of the statute, and a $100 per day penalty for obstructing an investigation. These aren’t fines; they’re extinction events.
• Criminal Record for violations

The Merit Drywall Precedent: A Chilling Warning

The Merit Drywall case, with its criminal complaint, isn’t an anomaly; it’s a direct consequence of this overreaching regulatory mindset. While paying cash under the table and evading insurance are clear violations that no legitimate business condones, the focus on “extensive supervision,” “piece rate or hourly basis,” and “general contractor supplied the overwhelming majority of materials” directly mirrors the very practices this new law now criminalizes. This case serves as a stark warning: what was once standard practice, or even necessary for project efficiency, can now land you in legal and financial ruin.

Stop-Work Orders: The Ultimate Weapon

The Commissioner of Labor and Industry or the Attorney General can now issue a stop-work order for any violation. This is the ultimate weapon, capable of grinding projects to a halt, destroying timelines, and costing companies millions in liquidated damages and lost revenue. One minor perceived non-compliance, and your entire operation can be shut down.

This is not about protecting workers; it’s about strangling an industry. This law is vague in its implications, goes against deeply ingrained industry standards, and can – and will – destroy entire businesses and the careers of countless skilled individuals.

What Can We Do?

We cannot stand idly by. Builders Association of Minnesota (BAM) is committed to fighting this destructive legislation. We must:

• Educate: Understand the devastating implications of every clause and share this information with other contractors you know.
• Advocate: Engage with legislators, share your stories, and demand realistic, industry-informed solutions.
• Unite: Our collective voice is our strongest asset.

This is a critical moment for the Minnesota construction industry. The viability of your business, the livelihoods of your employees, and the future of our state’s housing industry depend on our ability to challenge this impossible law. The chains are tightening – we must resist.

Support BAM’s efforts to protect your career and business!

Top 5 Worst Aspects of this Minnesota Worker Classification Statute for Construction Contractors:

1. Massive, Stacking Financial Penalties:
   • The potential for fines that accumulate per misclassified worker and per violation creates a severe financial threat. Even minor, unintentional errors could lead to crippling penalties, potentially forcing business closures.
2. Strict and Unforgiving 14-Factor Test:
   • The rigid requirement to meet all 14 factors, with no room for error, creates an extremely high compliance burden. Even temporary lapses or simple mistakes can trigger misclassification.
3. Vague and Ambiguous Language:
   • The poorly defined terms within the statute make it difficult for contractors to understand and comply with the law. This creates a high risk of unintentional misclassification and legal disputes.
4. Risk of Criminal Penalties:
   • The potential for criminal charges related to wage theft adds a significant layer of risk and stress for construction contractors. This creates a fear of prosecution for mistakes made in a very unclear regulatory environment.
5. Increased Risk of Litigation and Disputes:
   • The combination of unclear rules, and large financial penalties creates a very high risk of lawsuits from workers, or from the state. This increases the cost of doing bus