The Devil Went Down to Georgia: New Immigration Law for Public Projects

A few of my favorite parts of a holiday picnic are: kids running through sprinklers, very cold watermelon, crispy hot dogs, and the Charlie Daniels Band blaring over the speakers.  (... yep, the devil went down to Georgia ... he was looking for a soul to steal ...)  I do not intend to equate the devil with immigration reform, but keep reading so that you can make your own decision.

Last week, Georgia law makers enacted the Illegal Immigration Reform and Enforcement Act of 2011, which will change the requirements for doing work on construction public projects in Georgia.  The existing law (OCGA 13-10-91) already requires a contractor bidding or contracting with a public owner to provide an affidavit attesting that:

  1. it has registered with and is authorized to use E-Verify;
  2. the contractor's user ID number and date of authorization; and
  3. it is using and will continue to use E-Verify throughout the contract period for all newly hired employees or subcontractors. 

First and second tier subcontractors are also required to register and participate in E-Verify to verify info of all newly hired employees.  Notice of the identity of any new subcontractors on the project is required to be sent to the owner within five business days.

The new law extends the affidavit requirement to all tiers of subcontractors and sub-subcontractors, including suppliers who contract with a sub or sub-sub.  A fourth  requirement is added to the affidavit form: (4) the contractor will contract for the work only with subcontractors who present an affidavit with the same info as the contractor's affidavit.  This additional requirement applies to the affidavits from subs and sub-subs.  Instead of sending notice of the identity of new subs, you send affidavits from the new subs.  The language indicating it applies to "newly hired employees and subcontractors" has been deleted, so now it applies to everyone.  Obviously, the idea is to require the public owner to collect affidavits from everyone working on the project that they are verifying employee info through E-Verify. 
 
So what, fellow Charlie Daniels Band lovers?  Public owners face funding cuts if found to be in violation of the new requirements, so they will be taking it seriously.  Contractors face penalties only if they "knowingly and willfully" make false statements in an affidavit, but are not held liable for unknowingly or unintentionally accepting a bid or contracting with a sub who violates the requirement.
 
The effective date for these changes is July 1, 2011.  The way the statute is written, it apparently applies only to new bids and contracts after the effective date.  It says a public employer shall not enter into a contract for work unless the contractor participates in E-Verify, and shall not consider a bid unless it includes the new affidavit from the contractor.  Also, a form of affidavit is supposed to be posted on the website of the Dept of Audits and Accounts by August 1, 2011, a month after the effective date of the statute (none posted yet).  This indicates the new affidavit requirements only apply to bids and contracts after the effective date of July 1, 2011.  Therefore, for public contracts already signed and underway, it appears that you keep doing what you were already doing.  But it is worth confirming with the owner rep on ongoing projects. 
 
There is another portion of the new law that requires all businesses with more than 10 employees to register with and use E-Verify as a condition of getting or renewing a business license or maintaining licensure status under state licensing laws.  It is phased in over a couple of years, first becoming effective Jan 1, 2012 for employers with 500 or more employees.

Image: may wong

Heads Up Public Contractors! Nashville to Pass Non-Discrimination Bill Including Gender and Sexual Orientation

As reported in the Nashville Business Journal and News Channel 5 (video), a non-discrimination bill passed on a second reading at Metro Council last week.  The council voted 21 to 16 in favor of the bill that would add two new classes to the procurement code Metro contractors already follow. These companies would not be able to discriminate on the basis of gender identity and sexual orientation if it passes.  

A copy of the non-discrimination bill can be found here.  The bill must pass a third and final reading at the next council meeting set for March 15, 2011.  As reported, Mayor Karl Dean said that he would sign the bill into law.  According to The Tennessean, more than 181 other communities across the country have adopted similar policies.

What does the proposal mean to contractors?  If the legislation is passed on the final reading, contractors and suppliers who work with Nashville would have to offer workplace protections for homosexuals and transgender individuals.  In its simplest terms, contractors who do business with Metro would be required to add gender identity and sexual orientation to their non-discrimination policies.  In addition, the parties' contract must include an affidavit of compliance, which should be part of the bid documents.  The law reads:

The purchasing agent of the metropolitan government shall include in all bid specifications or invitations to bid a provision to the effect that no contract shall be entered into for building and construction projects or supplies or services unless the successful bidder submits an affidavit to the metropolitan government stating that by his employment policy, standards and practices he does not subscribe to any personnel policy which permits or allows for the promotion, demotion, employment, dismissal or laying off of any individual due to this race, creed, color, national origin, age, sex, gender identity, or sexual orientation, and that he is not in violation of and will not violate any applicable laws concerning the employment of individuals with disabilities.

As amended, the law excludes businesses with less than 15 employees and it does not not apply to religious institutions.

Thompson Research Group Says, "Public Construction: The Only Game in Town."

Earlier this week I attended the AGC of Middle Tennessee's membership lunch.  Everything was right on!   I love chicken ... they served chicken!  I have 5 kids ... the guy next to me had 9 kids!  And I like to follow construction industry trends ... and the speaker loves to follow construction industry trends.

David Wells, a senior equity analyst for Thompson Research Group, spoke about the 2010 economic outlook for the construction industry.  Some key talking points:

  • There is no longer a drag on residential construction and we may see some improvement in the upcoming year
  • As to non-residential or commercial construction, we have not yet bottomed out ... which may occur mid-late 2010
  • Finally, as you can expect, public construction is "the only game in town"

Given the increased investment in public construction, there remains some challenges in this arena.  For example, U.S. government (and other public) borrowing has replaced private borrowing.  This creates a public debt crisis at the federal level, resulting in federal deficit projections of unparalleled amounts.  At the state level, the budget crises stem from the same economic conditions coupled with the requirement to maintain a balanced budget.

This may be new information to some of you.  It is probably old news to many others.  But what does it mean practically?  Here are some of David's concluding recommendations:

  1. Take cost cuts now, if necessary.  The uncertainty of work significantly impacts employee productivity.  If you are going to need to make cuts, make them now, and reassure your remaining team that they are part of the team.
  2. De-lever your balance sheets.  Use the time now to analyze your debt structures in place and attempt to de-leverage your company as much as possible.
  3. Watch out for opportunities.  Weaker companies will be looking for solutions to their problems.  Stronger companies should be on the watch for opportunities to build and expand through acquisition or partnership.

Question: Any recommendations for improving your 2010 economic outlook?

Graph: Council on Foreign Relations

 
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