In These Times: The Visa Loophole That Big Ag Construction Firms Love To Exploit

CAFOs, like this hog barn in Iowa, squeeze both livestock and labor for maximum profit—starting with the workers who build them. (Photo by Nancy Nehring/Getty Images)

By Stephen Franklin, Kristine Sherred, Jessica Villagomez, Zhejun Wang, Joseph Bullington and Kari Lydersen | April 30, 2018

How hog barn builders are importing labor at low wages and leaving local workers in the dust.

SPRINGFIELD, ILL.—Work was rapidly vanishing. Mary Wilson’s construction projects on farms, nearly a third of her business, had disappeared, and she was not able to hire as many workers. But it was 2009, and she chalked it up to the recession.

When the work had not returned by 2016, Wilson, president of Michel Concrete in Springfield, began searching for an answer. She found that the farm construction jobs she typically sought were going to a competitor offering lower prices.

On federal contractor websites, she saw that the competitor was using a visa program meant to allow U.S. employers to bring in foreign workers during a local labor shortage. It’s called the H2A visa, and in central Illinois it pays about $13 an hour, roughly half of what union construction workers in the area make.

Wilson couldn’t understand why it was legal. The H2A visa program, as she understood it, was meant to provide the agriculture industry with seasonal farmworkers.

Until recently, the U.S. Department of Labor (DOL)—which, alongside the State Department, oversees the visa program—seemed to agree. In 2008, the DOL rejected a request by Alewelt Concrete Inc. to employ workers on H2A agricultural visas to help build livestock confinement facilities in Iowa. The DOL explained in a refusal letter, “The requested workers will not be raising, feeding or caring for the livestock in the facilities.” Alewelt appealed, however, and reached a deal with the DOL to dismiss the case.

In the decade since, Alewelt and other farm construction companies have brought in hundreds of workers on H2A visas. In These Times spoke with H2A visa workers doing farm construction in Illinois, consulted legal experts and migrant-worker advocates, and studied DOL records, and determined that the practice has become widespread—particularly in building the hog confinement facilities that are mushrooming in the Midwest.

Pork is a booming industry, driven largely by growing exports to China. Between 2015 and 2016, the profits pork packers earned per head of hog almost doubled, according to the North American Meat Institute.

As profits continue to rise, Iowa, Minnesota and Illinois lead the country in number of hogs slaughtered, and the hog industry’s infrastructure continues to expand. The number of “concentrated animal feeding operations,” known as CAFOs, has quadrupled in Iowa to more than 10,000 since 2001, according to a report by the Iowa Policy Project. The dramatic increase has raised serious environmental and health concerns for neighbors who deal with overflowing manure lagoons, overwhelming odors and air pollution from the facilities. And many workers who staff the CAFOs are themselves immigrants who endure low pay and dangerous working conditions.

The CAFO boom also requires construction workers, but it’s hard to come by exact figures on how many are on H2A visas. Full of typos and misspellings, DOL databases tracking H2A workers require much guesswork. Over the years, “construction” appears and disappears as a database category.

Even officials with the Government Accountability Office (GAO), which released a report about the H2A program in 2015 (and updated it in 2017), find the records difficult to decode. “We were trying [to] answer what [H2A workers] were doing once they were in the country—but we couldn’t match [the federal records] up with what they were actually doing,” says Cindy Barnes, director of GAO’s Education, Workforce and Income Security division. Barnes believes the muddled records are due to a lack of coordination between the DOL and the State Department.

Asked by In These Times about the number of H2A farmworkers doing construction work, DOL officials pointed to a specific category code that has been in use for H2A only since 2015. But even after 2015, many companies with names that include “building” or “concrete” filed as if their workers were picking crops or milking cows.

Based on the DOL’s category for farm construction jobs, only 36 construction applications for H2A visas were approved in 2015, 2016 and 2017. But when In These Times searched the database for the word “construction” as a subcategory of “primary crop,” more than 300 applications were approved over that three-year period. Most of the applications were for multiple workers.

The amount of H2A visas issued for Iowa and Illinois has been climbing markedly, from 2,071 in 2012 to 3,475 in 2016. Much of the increase can be attributed to one company: Alewelt Concrete. Alewelt made the DOL’s 2016 list of the top 10 H2A employers in the country, with 1,343 certified H2A workers. Alewelt is the only construction company on the list.

Mary Wilson, president of Michel Concrete in Springfield, Ill., confers with worker Juan Avila on a building site. (Photo by Ben Romang)

H2A is not the only guest worker visa program available to employers.
The H2B visa is designed to bring in temporary workers for non-agricultural jobs, including construction. Each program is supposed to pay the prevailing wage, but H2A’s rates are based on low farmwork wages rather than higher construction pay. Unlike H2A, H2B mandates overtime pay, requires that employers pay into Social Security and Medicare, and has annual caps.

“Using the H2A program to hire workers to do construction is, at the very least, a legal gray area,” says Daniel Costa, an attorney and labor and migration expert with the Economic Policy Institute (EPI) in Washington, D.C. “Even if it doesn’t violate the letter of the law, it at least violates the spirit. I think workers who are doing construction should come under the H2B program.”

To qualify for either visa, employers must prove there are no U.S. workers willing and able to do the job. Among other things, they must place two recruitment ads in local newspapers. In practice, such ads often fall short of a good-faith effort. Consider the notorious case of Donald Trump’s Mar-a-Lago resort, which fulfilled the H2B preconditions in July 2017 with an ad instructing locals to “apply by fax.”

In These Times found that Alewelt placed such an ad in the Sioux City Journal as recently as March 22 for jobs near Juanita, Iowa. The ad sought “farm laborers” to do such agricultural work as “layout building,” “level earth,” “tie-rebar,” “position aluminum wall-frames” and “place all concrete” for a wage of $13.80 an hour. The average wage for an Iowa construction laborer is $17.32.

An office manager for one small-town Iowa construction firm tells In These Times that qualified construction workers can be hard to find in rural America. H2A workers brought in from Mexico are “crucial to the company,” says the manager, who asked not to be named because they are not authorized to speak on the company’s behalf.

Mary Wilson, in central Illinois, says she doesn’t think she could reasonably apply for guest worker visas. With veteran construction workers and newcomers always looking for jobs, she says, “I can’t sign the affidavit and honestly say I cannot find anyone that will do the work.”

Fortunato “Lucky” Salamone is the business manager for Laborers Union Local 32 in Rockford, Ill. In early 2017, his attention was drawn by articles about the building of a nearby hog confinement facility. Looking into the project, he discovered the work was being done by H2A workers.

On a quiet residential street in Rockford, where federal records indicated that H2A farm construction workers had been staying, neighbors pointed to an empty ranch house, describing it as a one-time home to a revolving population of work crews.

At the time, about 20 of the Local’s 200 workers were out of work. The Illinois construction industry lost nearly one-third of its jobs between 2001 and 2012 (and has since regained only about one-third of those). The state’s unemployment rate for construction workers remains among the highest in the country, at 8 percent.

“We shouldn’t punish the foreign workers—I’m sure they are hungry, too,” Salamone wrote in a May 2017 column for the Journal Standard, a Rockford newspaper. “But let’s give our local people a first chance at employment.”

Economists say that overall and in the long run, immigrants do not push Americans out of work. Immigration spurs economic growth that ultimately creates more jobs.

But there can be short-term exceptions, economists add. In periods of high unemployment and weak job growth, the economy can take longer to adjust to new immigrants who may compete with less-educated U.S. workers.

One of the problems with the guest worker system, according to Daniel Costa of EPI, is that the rules don’t function well enough to make sure the program fulfills its intention: providing short-term workers to fill labor shortages.

Records and interviews with guest workers indicate some employers are using the visas as a mainstay of their staffing.

Costa reviewed federal filings for H2B workers from 2004 to 2014 and found that, among the top 15 types of jobs filled by H2B workers, wages for all workers have been flat or falling. This could indicate that the availability of guest workers may indeed be driving down wages for those industries. Costa also found high unemployment rates for workers in the top 15 H2B sectors, including construction.

In short, employers appear to be benefiting from the lower wages given to H2B workers, rather than hiring local workers.

Costa believes that the programs also “fail miserably” in another way: at “protecting the basic workplace rights of migrant workers, who can in many cases be legally underpaid.”

Sitting in a trailer in a small northwest Illinois town, Raul Gómez (not his real name) describes how he’s come to the Midwest every year for the past 10 years on an H2A visa. He spends about nine months working, then returns to Mexico.

The three-bedroom trailer is provided for Gómez and eight other workers by their employer: Alewelt Concrete. Signs warn the men not to smoke inside the trailer, which appears more like a break room than a home. Cameras watch everything within the walls; the men say the employer told them enigmatically that the cameras were for their neighbors’ safety. The men sleep in bunk beds and share two bathrooms.

Gómez earns $13.80 an hour, an amount he says he could never imagine making in his village in the state of Zacatecas. He’s glad for the money he can send home, but regrets seeing his wife and daughters only a few months of the year. “You can’t have it all,” he sighs. Like him, most H2A workers in the United States come from Mexico and have family there.

Gómez works just over 10 hours a day, six days a week, putting up buildings to house pigs. He knew about the H2B program, but says the company told him it is only for workers in cities (which is not true).

The DOL sets H2B pay based on local prevailing wages. H2B pay for construction work in Illinois and Iowa ranges from about $20 to $30 an hour, plus overtime.

Gómez knows other workers who have returned on H2A visas three, five or 10 times.

He says he has never had any problems getting paid, but recalled another worker for a different employer who was not paid all of his wages last year.

Gómez says he sees working on an H2A visa as much better than working as an undocumented immigrant. And, indeed, the H2A and H2B visas are meant to provide legal alternatives to undocumented seasonal migrant work. But both programs are plagued with reports of workplace abuses, including substandard tenement housing, wage theft, dangerous working conditions and improper fees charged to workers.

Alewelt, where Gómez works, was sued in 2010 by a group of seasonal workers. The workers alleged that Alewelt had arbitrarily switched them from H2B to H2A visas, had failed to pay them for all hours worked, had illegally failed to reimburse them for recruiting fees and transportation and equipment costs, and, in two cases, had put injured workers on buses back to Mexico without medical treatment. The case resulted in a settlement and a nondisclosure agreement.

Officials at Alewelt and the firm’s attorney, Aaron Bernard, declined repeated requests for comment from In These Times.

Miguel Keberlein, a former immigrants’ and workers’ rights attorney with the Legal Assistance Foundation (LAF), says that, of the labor-abuse cases the LAF prosecuted in the past four years, 10 involved farm construction workers brought in under H2A visas. All of the cases were settled.

Keberlein says the use of H2A workers for farm construction “doesn’t pass the smell test, and it is certainly why companies that are exploiting the system are so eager to settle.”

Ben Botts is legal director for the Centro de los Derechos Del Migrante, a binational migrants’ rights organization that joined the suit against Alewelt. A former DOL trial attorney, Botts says he has “some skepticism about the DOL’s capacity to meaningfully penalize employers.” He doesn’t doubt the intentions of most of his former DOL colleagues. “DOL has the authority under existing law to meaningfully address H2 employer noncompliance,” Botts says. “The problem is one of resources and institutional will.”

The extent of the problem is hard to gauge: Just as undocumented workers fear speaking out because of the risk of deportation, temporary workers fear angering their employers and being sent home or not hired back next season. Based on interviews with workers and groups that represent them, the GAO’s report suggested that the level of abuse under the visa programs may be underreported.

In May 2017, the DOL won a preliminary injunction against a farm in El Mirage, Ariz., for paying its H2A workers illegally low wages and housing them in “illegal and life-threatening living conditions.” The injunction was the first against the H2A program in DOL history. But Arizona reporters have noted that a great increase in H2A workers in the state has not been met with a boost in DOL inspectors.

“All of these guest worker programs have been rife with abuses,” says Bruce Goldstein, an attorney and president of Washington, D.C.-based Farmworker Justice. “The businesses that bring in guest workers have been able to game the system and part of the reason is that the people who come in are very vulnerable. The system is driven by the desire of employers to obtain a low-cost productive workforce and the willingness of politicians to give in to their demands.”

Mary Wilson doesn’t have a gripe with competitors relying on foreign workers, “if they truly can’t find [local] workers.” But if they bring in migrant workers, she thinks they ought to do so under the H2B program, and pay them according to their expertise.

On average, she pays her workers about $26 an hour, plus overtime. “I want to attract people who want a career,” she says.

In June 2016, Wilson wrote a letter to U.S. Sen. Richard Durbin (D-Ill.), saying, “Since 2008, the construction industry in Illinois has faced hard times, making it quite difficult for contractors, like myself, to provide steady employment for our workers. The loss of agricultural projects has only made this worse.”

Durbin’s office wrote back to say they would contact the DOL, and said they would get in touch when they heard back. They have not yet followed up. However, Republican Congressman Darin LaHood responded to Wilson’s outreach, and his office is now in talks with the DOL about the H2A classification.

An early-childhood education major, Wilson taught for a few years, worked part-time at a hospital and raised four children. In 2008, she took over the family business, started years prior by her father in the family’s kitchen in Edinburg, Ill., a rural community near Springfield. To learn more about the practical side of construction, Wilson suited up for work like her employees and went out on jobs with them.

Now, Wilson believes she has to fight against a troubled bureaucracy and companies that exploit it to protect her industry and employees.

“The real problem I have is that I see the people here, who used to do this kind of work, get paid less annually because they are not working as much,” she says. “I didn’t think that was right.”