Contractor Legal Alert: Immigration, Tesla & Unpaid Claims

Trent Cotney highlighted immigration enforcement, insurance payment disputes and proprietary technologies as major issues contractors should have on their radar. He encouraged employers to maintain proper I-9 procedures, reconsider contracts that rely entirely on insurance proceeds and plan for future warranty obligations tied to proprietary systems. His broader message was that contractors are better positioned to manage risk when they anticipate change instead of reacting to it.

Cotney pointed to a recent AGC and NCCER survey indicating that 29 percent of contractors have experienced some type of workforce impact related to immigration enforcement. Those effects can range from I-9 audits and ICE enforcement actions to complications involving subcontracted labor.

Contractors in the South have reported some of the greatest impacts. Cotney said several factors could be contributing, including year-round construction in states such as Florida, booming Southern construction markets and greater reliance on subcontracted labor in residential construction.

For employers, the message is straightforward: Compliance needs to remain a priority.

“Making sure that you’ve got the right policies and procedures in place, maintaining proper I-9s, all that should be top of mind,” Cotney said.

Insurance Payments Under Pressure

Bloom and Cotney also addressed another challenge familiar to restoration contractors: getting paid by insurance carriers.

Cotney said the insurance environment surrounding storm and restoration work has changed dramatically during the past five years. Florida has been at the center of many reforms, including changes involving advertising, required notices, assignment of benefits and attorney fees.

At the same time, Cotney said contractors are encountering increased scrutiny, payment delays and pushback from insurers. The issue affects roofing contractors as well as wall and ceiling companies and mitigation contractors performing restoration work.

That changing environment may require contractors to rethink their contracts.

Cotney believes the days of relying solely on contingency-based agreements tied to insurance payments may be numbered. Instead, he is seeing contractors move toward hybrid arrangements that recognize insurance proceeds while ultimately establishing the property owner or end user as responsible for payment.

Lessons From Tesla Solar

For roofing contractors, Tesla's exit from the solar roofing business offers another lesson in managing long-term risk.

Cotney recalled the excitement surrounding Tesla's solar shingles when the technology arrived roughly a decade ago. Now, contractors that installed the proprietary system need to consider how they will support those roofs well into the future.

Tesla has indicated it will continue honoring existing warranties and supplying replacement parts for the foreseeable future, Cotney said. Contractors, however, should consider maintaining adequate inventories of parts and supplies needed to address future workmanship or material issues.

The larger lesson extends beyond Tesla. Contractors installing proprietary systems should consider what happens if a manufacturer stops producing the system, changes direction or goes out of business while the contractor still carries long-term warranty obligations.

Cotney remains optimistic that solar will rebound as technology improves and contractors and customers receive greater value from solar components.

Bloom and Cotney closed by highlighting the Roofing Alliance and its work supporting scholarships, research, education and industry initiatives. Cotney pointed specifically to the organization's work with Clemson University and encouraged contractors to learn more and become involved.

Across all of these issues, Cotney's message was consistent: Contractors need to anticipate change rather than react to it. Whether the challenge involves labor, contracts, insurance or emerging technology, preparation can make the difference between managing risk and being caught by it.