The following article was originally published in the July edition of AWCI's Construction Dimensions magazine. Don Procter writes about Marek's Dallas Division President and AWCI President John Hinson.
Anyone who knows John Hinson can tell you that he has a lot to say in any conversation about the state of immigration reform and the abuse of misclassifying workers in the United States. The new president of the Association of the Wall and Ceiling industry has strong views on the subject, and while he doesn’t profess to have a solution to the problems the country faces with between 11 million and 12 million undocumented workers (a conservative estimate, in his opinion), he has strong views about reform. Hinson is president of the Dallas division of Marek, one of the oldest wall and ceiling contractors in the United States. He says federal legislation that includes enforcement is required to pull undocumented workers out of the shadows and give them an opportunity to gain employment with legitimate contractors. Doing so would take away the economic advantage underground employers have over the legitimate contractors. It would boost the income tax revenue to federal and state governments and offer undocumented workers new and better employment opportunities in their field.
In Texas and elsewhere, Hinson sees two kinds of contractors: those who pay payroll taxes and benefits, and those who skirt employment law to take advantage of undocumented workers. The former he considers to be legitimate contractors and the latter to be underground employers.
"The way the laws are right now, it is illegal to employ undocumented workers and yet they are working here for someone (primarily for underground employers at low wages and no benefits). By skirting employment law, these employers have an unfair market advantage,” Hinson says.
While Hinson doesn’t promote amnesty for these workers, he is a practical man. "What I am saying,” he says, "is you can’t deport millions of people without our economy suffering. We need these people.”
Hinson says fixing the immigration problem has to start at the federal level with comprehensive immigration reform. "But as a state—Texas or, for that matter, any state—comprehensive immigration reform is not going to fix misclassification of workers, in part, because it is very difficult to document and prosecute those cases.” Hinson is referring to IRS 1099 recognition of income versus a W-2 for workers who work for a company but are not employed by that company. These workers are in essence independent contractors and are therefore liable to pay their own income, Social Security, unemployment and other payroll taxes. "I seriously doubt there is a high compliance among 1099 workers in the construction industry,” Hinson says.
A common practice of employers, he says, is to retain "a labor broker” responsible for hiring workers, which in and of itself is a legitimate way to hire workers. However, it becomes problematic when a labor broker then hires subcontractors who then may hire undocumented workers. "It gets down in the weeds where everyone defers that tax liability and responsibility, so enforcing it is very difficult to do because no one knows who is on what job site,” Hinson says. "For example, you can turn in a payroll report with a number of people on a job site, but until someone goes out and checks to see if the individual’s name on the job site matches with the individual on the report, you don’t really know who is on the job site.”
He points out those audits are performed in offices, not in the field, and authorities do not have the resources to visit every job site. While it is a violation of employment law to misclassify workers, with little enforcement and minimal penalties in place there is nothing to discourage employers from following the practice when the rewards are higher than the risks.
Under the Immigration Reform and Control Act of 1986, employers are subject to I-9 audits, which require them to verify the identity of employees. Typically, the audit requires two forms of written identification and one of photo identification for each employee. The problem is that employers can’t always easily determine whether the identification they are given is fraudulent. Under the rules, if a federal auditor determines that an employee submitted fraudulent ID, the employer must lay that worker off. "They might be workers you have had for five, 10 or 15 years,” Hinson says. "Now they have to go into the shadows for work or face losing their homes, all of which just makes the problem of undocumented workers worse, not better.”
Hinson, who has discussed this with the Texas Workforce Commission (a state agency that oversees workforce development for employers and workers), says there is often little incentive for undocumented workers to surface—largely because they don’t have to pay taxes but still get free basic healthcare. "The only incentive for them to stop is fear of deportation, but that is not happening now,” Hinson says.
Deportation, he says, generally happens to illegal immigrants convicted of felonies and "only a minuscule” number of undocumented workers commits felonies. "The great majority of illegal immigrants are hardworking family people forced to work in the shadows due to our failure to implement reasonable legislation to solve the problem,” Hinson says. "It is not their fault; they are victims too.”
Possible Solutions
The new AWCI president says a top priority of government should be to develop and enforce comprehensive immigration reform. At the April 2015 meeting of the AWCI board of directors, Hinson was the issue manager developing an AWCI policy on immigration reform. The policy was adapted from that developed by the American Subcontractors Association.
The AWCI policy on immigration reform states that AWCI supports clear, sensible reform of the immigration system that accomplishes the following:
- Addresses future economic needs for workers through the creation of a guest worker program.
- Practically addresses undocumented workers already in the United States.
- Functions efficiently for employers and workers, including an accurate, reliable and effective system to verify employment eligibility.
- Can be efficiently and vigorously enforced by government agencies.
- Allows hard working, tax paying undocumented workers to earn legal status.
- Ensures that U.S. workers are not displaced by foreign workers.
- Ensures that all workers enjoy the same labor law protections.
- Strengthens national security by providing for the screening of foreign workers and creating a disincentive for illegal immigration.
- Ensures secure borders.
Image Problems
The industry needs an image makeover. "I am fortunate to be part of a team that is taking responsibility to try and improve our industry’s image related to workforce development for craftsmen,” Hinson says.
At the Dallas division of Marek, employee retention has been a philosophy from day one (the average tenure at the Dallas division is more than 17 years). Keys to retaining workers include providing them with good wages, healthcare insurance, a retirement plan (such as a 401(k) matching plan) and holiday pay. Without the benefit of union training programs, Marek has created its own skills development training program. "My career goal is to take care of our employees, our workers, our craftsmen,” Hinson says.
Hinson teaches eight short courses to new hires at Marek. "I don’t teach them how to use a screwgun; we have classes for that,” Hinson says. "I teach them about our industry structure—what an architect, an engineer and a project manager does. Hinson even talks to young workers about teamwork, how to keep their jobs and move up the ladder. "It is important training that is carried on to the next generation,” Hinson adds.
The 53-year-old is on the board of the Construction Education Foundation of North Texas (Dallas–Fort Worth), which evaluates ways of furthering career development for craftsmen. The foundation is an alliance of builders’ and contractors’ associations combined with a local community college to provide construction education courses.
He says that in Texas recruitment drives in high schools are difficult because of competition with the recruiting by the petroleum industry. Post-secondary trade schools focus on licensed trades like electrical, plumbing and welding. High school counselors do not refer students to unlicensed trades like carpentry, masonry, plaster and painting. Unlicensed trades suffer more in wages and career advancement. It is an image problem that our industry has to fix, Hinson says.
The undocumented worker issue only serves to tarnish that image even more. "How does the image look for our industry when we want to go out to and recruit at high schools? Not very good,” Hinson says.
The staunch supporter of workforce development is part of the Construction Career Collaborative, a Texas-based alliance of owners, contractors and subs aimed at addressing issues facing craftworkers. A chief initiative of the C3 is workforce development—an important element that every contractor and owner needs to take seriously.
"We’re gaining some traction in getting owners to realize this is an issue for a sustainable workforce,” he says, noting Marek as well as the Houston area’s AGC, ABC and ASA are key proponents. "It has taken off in Houston,” Hinson says, "and we’re hoping to see it spread across the state.”
Green Acres?
Hinson started his career with the Marek Family of Companies in 1984 as a project manager and estimator. In 1989 he became division president at the Dallas–Fort Worth branch. He has been a president, director or officer for several construction associations, including the Dallas/Fort Worth Drywall and Acoustical Contractors Association and the Steel Framing Industry Association. He has also been active in state legislative affairs in Austin through the American Subcontractors Texas Construction Association. With Marek, he has been instrumental in the construction of the Dallas Cowboys Stadium, the American Airlines Center Dallas, the Exxon and EDS World Headquarters as well as other landmark projects in the South.
Hinson and his fiancée, Shawna Manry, plan to marry in August. As for hobbies, he likes to fish and hunt, but one of the best ways for him to unwind doesn’t come with a fishing rod or hunting rifle. "Actually, my favorite thing to do in leisure is get on my tractor and mow because the only decision I have to make is when to turn,” he says.
Don Procter is a free-lance writer based in Ontario who specializes in the building and design field.