Caught in the Crossfire: Subcontractor Labor Risks From 2025 Raids

(ALABAMA) A surge in ICE raids at U.S. worksites is reshaping how construction firms manage labor and compliance, with subcontractors squarely in the crosshairs and general contractors newly exposed to liability. Since May 2025, immigration enforcement has intensified across the United States 🇺🇸, with unannounced worksite operations, expanded cooperation between federal and local authorities, and deeper legal risks for companies that rely on layered subcontracting. The pressure is especially sharp in Alabama and neighboring states, where crews are smaller, job sites are more dispersed, and project schedules can’t absorb sudden labor shocks.

On July 23, 2025, an ICE operation at an Alabama elementary school construction site led to 11 arrests, a vivid example of how enforcement at a single project can ripple across an entire regional labor pool.

Immediate Operational Effects

Contractors say the fallout is immediate: crews thin out within hours, and even documented workers stay home out of fear. Companies then scramble to meet milestones while facing liquidated damages if they fall behind.

According to analysis by VisaVerge.com, the current wave of immigration enforcement has become a major operational risk factor for builders that depend on multiple tiers of labor providers—a common feature of the modern construction market. The takeaway is clear even for firms that run tight compliance programs: in today’s environment, worksite enforcement doesn’t stop at direct hires. Subcontracted labor—and the companies that use it—are now front and center.

Enforcement Shift: More Raids, Broader Authority, Bigger Budgets

Several developments in 2025 set the stage for the uptick:

• First, ICE raids at job sites have increased since May, with a particular focus on construction projects and the subcontractor networks that feed them. Sites tied to schools, public buildings, and high-value infrastructure have seen audits as well as on-the-ground operations.
• Second, state and local participation in federal immigration enforcement has expanded. As of May 14, 2025, 40 states signed Memorandums of Agreement (MOAs) enabling state and local law enforcement to assist with workplace immigration enforcement, including investigations that reach down the subcontractor chain.
• Third, funding changed the equation. The “One Big Beautiful Bill,” signed on July 4, 2025, gave ICE what officials describe as unprecedented funding for worksite enforcement. ICE Director Todd Lyons said the boost would enable more robust enforcement and more worksite operations.
• Finally, Congress is weighing new rules that could tighten verification and documentation across the economy. The Dignity Act of 2025—introduced in the House on July 15—would make E‑Verify mandatory for all U.S. employers and set a path to legal status for certain undocumented workers who pass a background check, meet tax requirements, and enroll in health coverage. The bill is pending and has not been voted on.

Industry leaders warn that document checks alone may not be enough. Brian Turmail of the Associated General Contractors of America cautioned that even E‑Verify and careful Form I‑9 reviews can miss document fraud. George Carrillo of the Hispanic Construction Council says the operations are now hitting big general contractors, with “collateral damage” including detention and deportation of workers who were not the target of an investigation but happened to be on site.

On-the-Ground Fallout: Labor Shocks, Project Delays, and Shared Liability

The labor market impact is stark:

• Projects can lose a large share of their workforce in a single day—some contractors report up to half the crew gone after a raid or nearby operation.
• Absenteeism spikes even among documented workers because of fear of being stopped or questioned.
• A $20 million job in Mobile, Alabama, reportedly experienced a three‑week delay after a Florida raid triggered widespread no‑shows.

Broader labor market context:

• The number of unfilled job openings in the U.S. rose from 7.2 million to 7.8 million between January and March 2025.
• Employers say some of the increase reflects the time needed to replace undocumented workers with documented hires, which can push wages higher.

Legal exposure rises as well. Companies can face liability for undocumented workers discovered on their sites even when those workers are employed by a subcontractor. That exposure increases with each additional tier of subcontracting. A general contractor may be held responsible if an audit reveals problems—especially where record‑keeping or access control is inconsistent.

The July 23 Alabama school site raid illustrates how an incident can cascade: once 11 workers were taken into custody, other trades pulled back, inspectors questioned staff, schedules slipped, and subcontractors struggled to backfill positions. Such dynamics are now common across the Southeast, parts of Florida, and Tennessee—one of the states with the highest number of ICE arrests in 2025.

Construction’s vulnerability stems from how labor is organized:

• A single project may involve dozens of subcontractors and labor brokers, each responsible for I‑9 verification and record‑keeping.
• If one firm fails to maintain compliant records, an agency audit can spill over into the prime contract.
• In a raid, there is often no time to sort workers by employer before agents ask for ID and remove people from the site.

Union jobs are not immune. Even when unions run verification systems, mixed worker pools for rush projects can cause documented crews to shrink overnight due to fear or prior interactions with immigration authorities.

How Companies Are Responding

Companies are taking three main approaches:

1. Tightening documentation
   • More frequent internal audits and spot checks of subcontractor I‑9 files.
   • Strict access control to job sites.
2. Adjusting staffing models
   • Keeping a reserve pool of workers on call.
   • Staggering workloads to reduce the risk of missing critical milestones.
3. Revisiting contracts
   • Clarifying indemnity clauses, access rules, and documentation requirements for labor providers.

But paperwork alone may not be enough. Industry groups and immigration lawyers note:

• I‑9 compliance reduces risk, but it doesn’t eliminate it—counterfeit documents can pass routine checks.
• E‑Verify helps but won’t catch every case of identity fraud.
• Firms dependent on “just‑in‑time” labor remain vulnerable to surprise operations.

That’s why legal teams are writing site protocols and raid response plans into everyday operations. Practical changes appearing in the field include:

• Supervisors keeping a copy of the company’s warrant policy in their trucks.
• Foremen trained to recognize different types of warrants and to call a designated company representative before granting access.
• Signage at entry points stating the site is private property and government agents must present a valid warrant to enter non‑public areas.

These steps don’t stop inspections, but they help ensure enforcement stays within legal bounds.

Human Impact and Communication

The human toll is real:

• Workers avoid jobs after nearby operations.
• Families plan around possible detentions.
• Some documented workers fear past errors in databases could lead to increased scrutiny.

Employers feel the strain too—project managers spend nights calling subcontractors, reshuffling tasks, and explaining delays to public owners.

Practical, human-centered responses include:

• Hotlines to answer worker questions after nearby raids.
• Toolbox talks to explain warrant policies and encourage private HR consultations.
• Clear communication templates for notifying owners, partners, and insurers—often the same day an operation occurs.

Key takeaway: Clear policies, quick communication, and visible steps to protect workers can reduce panic and help contractors secure schedule relief from public owners.

Compliance Playbook: Practical Steps for Contractors and Subcontractors

Standard practices that emerged in 2025 include:

• Strengthen I‑9 processes
  • Keep Form I‑9 records complete, current, and quickly retrievable.
  • Use a separate, secure file system for I‑9s.
  • Reference: I‑9 Central and Form I‑9, Employment Eligibility Verification.
• Use E‑Verify where allowed and practical
  • Not mandatory nationwide as of mid‑September 2025, but required in some states and by some public owners.
  • If the Dignity Act passes, E‑Verify would be required for all new hires.
• Audit subcontractors regularly
  • Require certifications that they run proper I‑9 procedures.
  • Request sample files and conduct spot visits with consent.
  • Write clear contract clauses permitting proof of compliance.
• Control site access
  • Limit non‑public areas and ensure supervisors know which zones require a warrant.
  • Post signage about private areas and visitor rules.
• Prepare for unannounced visits
  • Designate a company representative (and an alternate) to engage with agents.
  • Train site leads to ask for ID and to politely request a copy of any warrant.
  • Do not obstruct agents; collect business cards and log actions.
• Document everything
  • Note times, areas visited, badge numbers, and any workers questioned or removed.
  • Keep copies of warrants and receipts for seized documents.
• Update communications plans
  • Have templates to notify owners, partners, and insurers quickly.
  • Explain steps taken and schedule adjustments in writing.
• Revisit contracts
  • Require subcontractors to follow I‑9 rules and, where allowed, use E‑Verify.
  • Consider indemnity language for losses caused by noncompliant labor providers.
  • Clarify responsibility for site access control and document retention.
• Train managers
  • Practice scenarios so supervisors know how to respond.
  • Cover the difference between a warrant and a consent request, safe interactions with officers, and procedures for contacting counsel.

These steps won’t eliminate enforcement risks, but they demonstrate good faith and can reduce chaos during an inspection.

Practical On-the-Job Details

A few operational pointers:

• Keep an updated list of the employer of record for each crew on site to avoid confusion during inspections.
• Ensure front‑line staff know where I‑9 files are stored and who can access them.
• Treat every agent with respect, do not block access covered by a warrant, and never destroy documents.
• After an operation, run a quiet internal review to identify gaps and fix them before the next visit.

General contractors that invest in better records, stronger subcontractor management, and simple supervisor training tend to recover faster after an operation, even with short‑term staffing hits.

Policy Outlook and Broader Economy

• Enforcement continues: ICE raids and audits are active in multiple states, with Tennessee, Florida, and Alabama reporting heavy activity in 2025.
• The Dignity Act of 2025 could change the landscape by mandating E‑Verify and creating a path to status for some undocumented workers, but it remains pending.
• If job openings stay high and project delays persist, lawmakers may face pressure to combine stricter verification with limited legal pathways—though political dynamics make the outcome uncertain heading into 2026.

Advocates argue current tactics push skilled workers into the shadows, increasing costs without solving root problems. Some officials acknowledge the system needs updates while defending enforcement of existing law.

Final Takeaways

• Construction subcontractors are now a focal point in immigration enforcement, not a side note.
• General contractors cannot assume a subcontractor’s paperwork fully shields them.
• Contracts, training, and records are as central to project success as materials and equipment.
• Clear policies and improved compliance systems help reduce panic and speed recovery after operations.
• For an official starting point on I‑9 compliance, employers can consult:
  • Official guidance: I‑9 Central
  • Form link: Form I‑9, Employment Eligibility Verification

This is not a cure‑all—document fraud still occurs—but investing in basic compliance and clear site protocols positions companies to better protect workers, manage legal and financial risk, and keep projects moving despite rising enforcement.