It all started with Arizona.

The state’s tough immigration law that allows police officers to inquire about a citizen’s resident status has gotten much press about how it is essentially profiling based on race. However, there are other provisions in the law that more directly affect the construction industry, most notably the hiring of day laborers — even homing in on whether picking up said workers in any way “impedes traffic.”

Arizona remodelers have been dealing with immigration laws for the past four years while these regulations have ramped up. According to Steve Shuler, president of Aspire Remodeling, in Phoenix, the new laws didn’t affect his company because his business has always been compliant, but, he adds, compliancy “was not the norm in the construction industry.” Shuler says that, had the construction market not crashed when it did, the new law would have had a much bigger impact. “There would’ve been a huge manpower cost issue to be dealt with, especially in Arizona,” he says. “If we would’ve maintained that building level, there wouldn’t have been a labor force to support it.”

Shuler says the market crash essentially splintered the labor force because skilled legal Mexican workers left Arizona for other states. The real effects of the laws will be felt when the market starts to recover. “When Phoenix recovers, and if construction levels are even half of what they were before the crash, there will be a tremendous labor shortage,” he says.

A Spreading Trend

But Arizona is not alone in its zeal against undocumented workers; other states are starting to follow suit. According to the National Conference of State Legislatures, as of March 31, 26 states enacted 63 laws and adopted 78 resolutions (one additional bill was vetoed in New Jersey). During the first quarter of 2010, 34 states had enacted 71 laws and adopted 87 resolutions, for a total of 158. An additional 37 bills were awaiting governors’ signatures.

From January to March 2011, there were 279 bills that dealt strictly with employment introduced in every state legislature except for Alaska, Connecticut, Idaho, Louisiana, Vermont, and Wisconsin. All of these bills require employers to use some form of work and employment benefit authorization, mostly E-Verify (see sidebar below for more), and establish penalties for businesses that employ unauthorized immigrants.

In Alabama, for example, there are two bills targeting undocumented immigrants — SB 256 and HB 56 — that make it legal for law enforcement to question the immigration status of anyone they suspect is in the country illegally, just like the Arizona law. And one component makes it illegal for a business owner to “knowingly” employ or even give a ride to an illegal immigrant. Though this puts more impetus on the business owner to follow the letter of the law, this is something they should have willingly been doing in the first place, regardless of the effect on their bottom line. There is strong Democratic opposition in the Alabama legislature, and the American Civil Liberties Union has already vowed a fight.

Effect on Remodeling

Baugher Design & Remodel, in Birmingham, Ala., subcontracts all of its work to companies that are legal, licensed, and insured, according to company president Rob Baugher. “I’m guessing some of them may be using illegal aliens,” he says. “They will have to check their employees and make corrections.” He adds that there has been no change in hiring practices or any effect on his bottom line … yet. “We may see a rate hike in the total bill, but we don’t anticipate that to be much higher,” he says.

It’s doubtful that remodeling will be hit as hard as agriculture was — a new Georgia law requiring all employers to check workers’ status using the online E-Verify system sent migrant farm workers fleeing the state while millions of dollars of produce was left to rot on the vine. For now, the hammers are still swinging in states with new immigration laws. But that could change with the stroke of a pen.

—Mark A. Newman, senior editor, REMODELING.