House Bill 246 (H.B. 246) — Concerns of Construction Business Owners

Summary

Unsigned written testimony on House Bill 246 (H.B. 246) from the perspective of construction business owners, especially smaller firms. The testimony states that the potential impact of the bill on labor availability and small businesses far outweighs the benefits, and that requiring the use of E-Verify could shrink the labor pool further by 80,000. It states that fines start at $250 for each failure to verify employment and escalate to $25,000 for repeated violations involving terminated employees. It states that there is a clear need for federal immigration reform.

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House Bill 246 (H.B. 246) raises several concerns from the perspective of construction
business owners, especially smaller firms. While the bill’s goal of promoting fair hiring
practices is important, its potential impact on labor availability and small businesses far
outweighs the benefits. Many industries are already struggling with widespread workforce
shortages. Requiring the use of E-Verify could make things worse by shrinking the labor
pool further by 80,000. Many undocumented workers play vital roles in keeping projects on
track. Losing this segment of the workforce could lead to significant delays, skyrocketing
labor costs, and increased competition for the limited number of verified workers
available.

For small business owners, the administrative demands of implementing E-Verify are
daunting. The program calls for training, ongoing record management, and addressing
system errors, which are time-consuming and expensive for businesses with limited
resources. On top of that, the penalties outlined in the bill are severe. Fines start at $250
for each failure to verify employment and escalate to $25,000 for repeated violations
involving terminated employees. Even worse, knowingly employing unauthorized workers
could result in permanent license revocation. These harsh repercussions could devastate
small businesses that are already operating on thin margins, creating an imbalance where
larger, well-resourced firms have an easier time complying with these requirements.

The risks do not stop there. The bill gives individuals the ability to file complaints with the
Attorney General, which could lead to additional investigations and penalties even in cases
of unintentional errors or E-Verify system failures. This level of scrutiny adds an extra layer
of anxiety and uncertainty for business owners, especially those who lack the capacity to
handle the administrative burden of managing complex employment verification
processes. On top of that, businesses found in violation could face a two-year ban from
bidding on state contracts, removing a critical source of income for many construction
firms.

Fundamentally, H.B. 246 focuses on addressing unauthorized employment without solving
the larger problem at hand. There is a clear need for federal immigration reform. We need a
more comprehensive solution that ensures industries like construction have access to a
dependable and legal workforce. This includes creating clearer pathways for
undocumented workers to gain legal status, modernizing work visa programs, and
balancing these workforce needs with secure border policies. Immigration reform is a
federal responsibility and state policies like H.B. 246 simply impose extra challenges for
businesses without tackling the root cause of the issue.

The bill itself could certainly benefit from adjustments to mitigate its negative effects.
Reducing fines for first offenses would prevent small mistakes from becoming financially
catastrophic for business owners. Offering state-funded support and training for E-Verify
compliance would make the transition more manageable for smaller firms. Including
exemptions or additional flexibility for these businesses could also help ease the pressure.
However, the most effective step would be for state leaders to press Congress and the
President to act on immigration reform by securing our workforce, rather than burdening
small business owners with additional and often overwhelming requirements.

H.B. 246 may aim to create a level playing field by enforcing compliance with hiring laws.
For business owners, however, it poses a serious threat to their ability to operate
effectively. Its unintended consequences, from labor shortages to financial burdens, make
it a flawed solution. A better path forward would involve working on both state and federal
levels to enact meaningful immigration changes that support industries like construction,
agriculture, manufacturing and healthcare, while promoting fair and lawful hiring
practices.


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