The headlines in Nashville, Tennessee are hard to miss: “Construction work force taking a hit amid ICE operations in Middle Tennessee” and “Tennessee ranks near the top for ICE arrests” For contractors and subcontractors, these are more than political talking points. It is a business risk that can hit the bottom line overnight.

Labor Disruptions on Site. An ICE raid occurs when U.S. Immigration and Customs Enforcement (ICE) agents arrive at a construction site to investigate the immigration status of workers. These raids can result in employees being detained or leaving the jobsite, causing immediate labor shortages and project disruption. Even off-site arrests can ripple back to the project, as workers may not return out of fear or uncertainty, further straining the labor force. For example, a $20 million project in Mobile, Alabama was on track for on-time completion by November 1. However, as of July 28, 2025, the contractor is looking at a three-week delay after about half of his workers, scared by an ICE raid in Florida, have stayed away.

The Cost of Delays for Owners, Contractors, Subcontractors. Lost labor quickly translates into lost time for contractors. Delays compound as subcontractors reschedule work, crews sit idle, and materials wait in staging. Owners, however, rarely accept “labor disruption” as an excusable delay. Most construction contracts include a liquidated damages provision, which imposes penalties that can range from hundreds to thousands of dollars for each day the contractor misses a contractual milestone.

“Labor Shortage” as Excusable Delay. A crew that looks stable on Monday can be half its size by Wednesday. In a market already stretched by skilled-labor shortages, finding qualified replacements is rarely quick or easy. Contractors can be left scrambling to fill roles that require specific expertise, licenses, or certifications. The contractor is only entitled to relief if the delay is caused by an “excusable delay” event or a “force majeure” event. Similar to unusually severe weather, market volatility due to tarriffs, or material shortages, ICE actions are unpredictable. Ultimately, the decision will come down to whether the labor shortage was considered to be unforeseeable, so long as the contractor has nothing to do with the shortage.

What Next? Contractors and subcontractors can’t control when or where ICE activity occurs, but they can prepare for its impact. Here are a few practical considerations:

• Review your contracts. Understand how liquidated damages, delay provisions, and force majeure clauses are drafted. If immigration enforcement is not addressed, you may be exposed to damages.
• Evaluate your workforce. Subcontractors in particular should know their labor pools and have contingency plans for sudden shortages.
• Plan for sequencing. A missing trade doesn’t just affect that scope of work. It can affect everything downstream on teh critical path. Build flexibility into schedules where possible.
• Communicate early. If a disruption occurs, keep owners and upstream contractors informed. Transparency may help mitigate disputes later.
• Document impacts. Keep clear records of manpower, schedules, and correspondence. In the event of a claim, documentation can be your best defense.

For Tennessee contractors, the risk of ICE enforcement is no longer abstract. Immigration enforcement is a sensitive and often polarizing subject, but on the jobsite, it boils down to one thing … risk. Contractors and subcontractors who recognize and plan for that risk will be in the best position to protect their projects, their businesses, and their bottom lines.