MICHELE NORRIS, host:
It's no secret that the Gulf Coast is being rebuilt by illegal immigrants. But what's less apparent is how these workers are being employed. In many cases, Americans are using middlemen to shield themselves from the risks and the costs of employing a foreign workforce.
NPR's Martin Kaste reports from New Orleans.
MARTIN KASTE reporting:
The neighbors say this house in New Orleans's 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 Dalvani Silva's turn to make dinner.
Ms. DALVANI SILVA (Brazilian worker in New Orleans): (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 subcontractor 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 is the subcontractor's lawyer.
Mr. MAX WHITNEY (Construction and Labor Service): Let me just clarify this to you. You do not have, I don't know who you talked to, but you do not have employees working for CLS. CLS, the only thing that CLS does, it subcontracts.
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 subcontractors such as CLS. And the subcontractors often called their workers independent contractors. All this subcontracting effectively insulates the company in charge from its foreign work force. 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 subcontracting system is spreading through the whole economy.
Ms. CATHY RUCKELSHAUS (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 situations such as the New Orleans cleanup, in which workers were bused 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 nonexistent. The Department of Labor disagrees.
Ms. VICTORIA A. LIPNICK (Assistant Secretary of Labor): I would say woe to the subcontractor 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 Lipnick 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 subcontracting illegal workers is still operating quite openly.
(Soundbite of construction sounds)
KASTE: 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.
(Soundbite of woman speaking Spanish)
KASTE: Or in this case a middlewoman, 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. MARIA COSTA (New Orleans construction contractor): They call me and say Maria, we have this customer here want to hire us, but they, they don't have the language to talk so I go there, they tell me I want, like, suppose $2000 to finish this house. Then I say to the contractor, okay, $2000 for them, $500.00 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 they're not, we're not hiring nobody, everybody's here are self-contractor. There's no employees at all. We don't even talk about it, everybody's their own contractor.
(Soundbite of television)
KASTE: Inside the house, a couple of the workers are trying to tune in a 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 calls pops is Jose Cochino. He has an easy, goofy laugh, but he also admits to feeling a little lost in America.
Mr. JOSE COCHINO (Illegal immigrant): (Speaking foreign language)
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, Cochino 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 refrigerators and now learning to use a nail gun. He says he likes working for Americans, but he doesn't like the middle men.
Mr. COCHINO: (Speaking foreign language)
Brazilians try to exploit other Brazilians, he says sadly. Cochino will be at the mercy of these middle men 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.
NORRIS: The Brazilians who come to the U.S. illegally are often financed by loan sharks back home. Learn more about that and check out an essay from Martin Kaste. You can find his reporter's notebook at NPR.org. Transcript provided by NPR, Copyright NPR.
