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Hiring Illegal Immigrants for Katrina Reconstruction

ED GORDON, host:

I'm Ed Gordon and this is NEWS & NOTES.

It's no secret that many of the workers helping to rebuild the Gulf Coast are undocumented immigrants. But what's less apparent is how these workers are being employed. In many cases, Americans are using middlemen to shill themselves from the risk and cost of employing a foreign workforce.

NPR's Martin Kaste reports from New Orleans.

MARTIN KASTE reporting:

The neighbors say this house in New Orleans' Treme District used to be a crack house. But that was before Katrina. Now, the house is full of Brazilians. On any given night there are at least a dozen of them sleeping on the floor. In the kitchen, it's Dulvanie Silva's(ph) turn to make dinner.

Ms. DULVANIE SILVA (Brazilian Migrant Worker): (Through translator) This house is like Big Brother. You know the reality show, Big Brother? Every week somebody leaves, but then three new people come in.

KASTE: Silva has been in the U.S. for about eight months. Like most of the residents of Big Brother house, she's here illegally. She came to New Orleans right after the storm; part of a group of workers recruited to clean up hotels, such as the Causeway Quality Inn.

Ms. SILVA: (Through translator) We went through a lot. They gave us terrible food. They crammed us in, sometimes eight people in one motel room. And they didn't pay overtime, even though we worked it.

KASTE: The hotel jobs were run by big, well-established companies. And yet, after an exhaustive search, NPR could not locate a single company or contractor willing to admit to being their employer. Not a single company willing to take responsibility for those Brazilian workers or their missing overtime pay.

Mr. RANDY BUTLER (International Catastrophe Solutions): I'm completely unaware of that.

KASTE: That's Randy Butler. He's the manager of the company that was in charge of cleaning up those hotels, International Catastrophe Solutions, or ICS, from Atlanta. Butler says, if those Brazilian workers were illegal, and if they were denied overtime, it's not his company's fault.

Mr. BUTLER: If that was the case, I would say that they would need to address that with CLS.

KASTE: CLS is Construction and Labor Service, a sub-contractor from Orlando, which is run by Brazilians. Butler says it was CLS that provided the workers, and it was their official employer.

But CLS denies this. Max Whitney(ph) is the sub-contractor's lawyer.

Mr. MAX WHITNEY (Attorney for Construction and Labor Service, Orlando, Florida): Let me just clarify this to you. You don't have - I don't know who you talked to - but we do not have employees working for CLS. CLS, the only thing that CLS does, it sub-contracts.

KASTE: Whitney says all of the hundreds of workers that CLS brought in for those jobs were independent contractors. It's a familiar pattern in New Orleans. Every big contractor NPR talked to said it got its labor from sub-contractors such as CLS, and the sub-contractors often called their workers independent contractors. All this sub-contracting effectively insulates the company in charge from its foreign workforce. It also lets companies avoid millions of dollars in contributions to Social Security, workers comp., and other payroll taxes.

Cathy Ruckelshaus, Litigation Director at the National Employment Law Project, says this sub-contracting system is spreading through the whole economy.

Ms. CATHY RUCKELSHAUS (Litigation Director, National Employment Law Project): Agriculture and garment were the historical sectors where this was really prevalent. But now, almost every low-wage sector that you see, in janitorial, in retail, in restaurants, in hospitality, you see it everywhere where there is low-wage workers, and often immigrant workers.

KASTE: Ruckelshaus says federal law actually makes it pretty easy to go after companies for misclassifying employees as independent contractors. Especially in a situation such as the New Orleans clean up, in which workers were bussed in, housed, and fed by the companies, and sometimes even paid by the hour.

But she says the companies needn't worry, because government enforcement is non existent. The Department of Labor disagrees.

Assistant Secretary VICTORIA LIPNIC (Assistant Secretary of Labor, United States): I would say woe to the sub-contractor that thinks that there's no enforcement on that, or that there won't be any enforcement.

KASTE: In Washington, Assistant Secretary of Labor, Victoria Lipnic, says she's keeping an eye on the Gulf Coast. Some weeks, the Department of Labor sends as many as ten extra investigators to the region to follow up on worker complaints.

But in New Orleans, the system of sub-contracting illegal workers is still operating quite openly.

(Soundbite of construction site)

These Brazilians are restoring a century-old Victorian. They live in the gutted out second story, and they're literally rebuilding the house around them. The owner lives out back in a FEMA trailer.

Even on these smaller jobs, the Brazilians still depend on middlemen.

Ms. MARIA COSTA(ph): (Foreign language spoken)

KASTE: Or in this case, a middle woman; a stylishly dressed Brazilian named Maria Costa, who juggles cell phone calls while simultaneously scolding two workers in Portuguese. They don't like the deal she's negotiated with the owner of the house. She warns them that if they reject it, good luck finding work.

After the argument she climbs into her Toyota truck. It has a new satellite navigation system to help her find the Brazilian workers scattered around this ruined city.

Ms. COSTA: They call me, say, Maria, we have this customer here who want to hire us. But they don't have the language to talk. So I go there and they tell me I want, like, suppose $2,000 to finish this house. Then I say to the contractor, okay, $2,000 for them, $500 for me.

KASTE: The Americans pay her, and she pays the Brazilians. But she doesn't worry about being caught employing illegal immigrants.

Ms. COSTA: It doesn't come up for anybody, even the big ones or the small ones, because we're not hiring nobody. Everybody here is self-contractor. There is no employees at all. We don't even talk about it. Everybody is their own contractor.

KASTE: Inside the house, a couple of the workers are trying to tune in the Spanish soap opera on a borrowed cable connection. As the workday ends, they try to create a homey atmosphere amid the power-tools and the uncut sheetrock. The man they call Pops is Jose Quchinio(ph). He has an easy, goofy laugh, but he also admits to feeling a little lost in America.

Mr. JOSE QUICHINIO: (Foreign language spoken)

KASTE: It's tough, because you can't talk to people, he says. They often don't know where you're from and they don't know what you were back in your own country.

In Brazil, Quichinio was a pioneer. He cleared land and raised cattle in the Amazon. But he lost it all, and now, at age 50, he's starting over again in New Orleans; scrubbing mold in hotels, hauling refrigerator, and now learning to use a nail gun. He says he likes working for Americans, but he doesn't like the middlemen.

Mr. QUINCHINIO: (Speaking foreign language)

KASTE: Brazilians try to exploit other Brazilians, he says sadly. Quichinio will be at the mercy of these middlemen as long as Americans won't take on the legal risks, not to mention the payroll taxes, involved in hiring him directly.

Martin Kaste, NPR News. Transcript provided by NPR, Copyright NPR.