As immigration enforcement ramps up around the country, the horse racing industry is feeling the pinch — not just in the supply of its labor, but in the costs of legal labor as well.
The Albany Law School kicked off its 17th annual Saratoga Institute on Equine, Racing, and Gaming Law Conference on Tuesday with a panel on immigration featuring trainer Gary Contessa and attorneys Leonard D'Arrigo and Joane Macri.
Macri emphasized that tougher immigration policies under the current administration do not simply include arrest and removal of undocumented immigrants, but also detainment and sometimes removal of legal green card holders for any type of crime, including traffic violations.
Employers can also be on the hook legally for their employees' status, if law enforcement can prove they knowingly hired someone without proper paperwork (including expired visas), or that they kept someone employed after learning their status was undocumented or otherwise illegal. On the flip side, employers can and have also be sued for violations of Equal Employment Opportunity laws if they discriminate against potential employees simply on the basis of their race or on the basis of applicants being immigrants.
Trainers traditionally use the H-2B visa program, which allows immigrants from a list of pre-approved countries to come in for a maximum of ten months to fill a seasonal employment need. There are two sets of 33,000 H-2B visas available for the United States each year, but lawyers say it's not enough.
“The problem is it's still not enough,” said D'Arrigo. “Every year thousands of employers get shut out of the program because there's simply not enough to meet the demand.”
The Department of Homeland Security announced the release of 15,000 additional H-2B visas earlier this summer, but D'Arrigo said it was too little, too late for most of his clients.
Further complicating the issue, there was once an exemption that allowed a worker to come in for seasonal work without counting against the 66,000-visa limit if they had been granted an H-2B within the prior three years. This opened up the flow somewhat for employers, D'Arrigo said. That exemption provision has now expired and has not been reinstated.
Jockeys coming in from other countries have the chance to be granted P1 visas, but these are reserved for people of international renown in their field, which by and large excludes grooms, hotwalkers, and assistants. Breeding farms are permitted to hire under a different visa program and are not subject to the same limits as the H-2B program.
The panel acknowledged the widely-held belief that trainers are willing and eager to hire foreign or illegal labor because it's cheaper to do so.
On the contrary, Gary Contessa reported that among large training outfits like his, there is great concern to avoid hiring undocumented immigrants because such stables routinely get audit requests for I-9 and other paperwork and a violation is a $10,000 fee.
“The enforcement has gotten really, really difficult,” said Contessa, who now hires a staff simply to work on maintaining I-9 and H-2B paperwork.
At the same time, Contessa agrees trainers are no experts on verifying documents. He requires new employees to present him with their New York Racing Association license and other paperwork to fill out I-9s, but he has to cross his fingers that the employee didn't pull anything over on NYRA's office. If he has suspicions about someone's status, he doesn't hire them.
Although Contessa makes use of the H-2B program each year, he said the process of applying for visas costs him more than hiring U.S. citizens. Legal costs fall to the employer using the program, rather than the employee, and Contessa estimates he spends about $5,000 in legal fees, advertising, and transportation costs to get one person in on a H-2B visa. Then, the H-2B program has a higher minimum wage requirement than the national minimum wage — by about $3/hour. Contessa said he's also not permitted to pay some of his employees a higher wage for doing the same work as others, so everyone's pay is determined by the H-2B hourly wage.
“My payroll has taken about a 20 percent hit by employing H-2B people,” he said. For me, roughly it's costing me about 7,000 per season per employee.”
“A small employer cannot use the H-2B program. It's just not possible. A large employer can, but we're slowly but surely being priced out of the game.”
Contessa said he has looked for Americans to do the work of grooms and hotwalkers (in fact, part of the use of the H-2B program requires he demonstrate he has advertised the position in the local newspaper and online). He usually gets several responses per ad (which he's also required to turn in with his H-2B visa application), but no long-term workers.
“We do the advertisement, and without fail, I'll get 15 calls from people who want the job,” he said. “Then I explain it to them and I usually scare away ten of them. Five of them want to take it to the next level, and I bring them in. Then, they realize their job is going to be to take care of a 1,400-pound animal who probably would like to kill you, and any time you get hurt, you get hurt bad. I don't know anyone in this business who doesn't get up in the morning and limp for the first half-hour.
“Then, you explain to them that you're going to get rained on, you're going to get snowed on, you're going to get really hot in the summer and really cold in the winter, and you'll be worked outdoors with this animal year-round … that guy says, ‘You know, I'm going to go work at Seven-Eleven.'
“Nobody in America wants this job.”
D'Arrigo theorizes that in addition to the tough working conditions and high risk of injury to grooms and hotwalkers, Americans would rather have reliable, year-round work in a central geographic location. Racing stables are typically only in the same location on a seasonal basis.
Contessa said he pays $650-$700 per week plus overtime. He usually has 15 H-2B workers per season; this season he was only able to get 12. One of his longtime employees is still at home in Mexico, and texts him daily to see whether Contessa has gotten another H-2B visa. He makes $13 per week in his home country.
Tensions are running high on the backstretch after recent Immigration and Customs Enforcements arrests in the Saratoga Springs area. Contessa said even his H-2B employees, whose status is legal, are frightened.
“The documented workers are nervous,” said Contessa. “People are getting picked up for traffic violations. They're all nervous. A lot of my documented, legitimate H-2B workers said, ‘Please leave us at Belmont this year.'”
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