Sudden and unexplained labor shortages can bring even the best-managed construction projects to a halt. Across the country, contractors are increasingly reporting situations where subcontractor crews simply stop showing up due to fear and uncertainty triggered by heightened immigration enforcement activity. When manpower drops substantially (seemingly overnight), the consequences are immediate: disrupted schedules, resequencing of trades, and exposure to delay claims and liquidated damages.

This article briefly outlines a practical action plan for contractors facing workforce no-shows and other labor disruptions in general, but particularly those stemming from recent increased immigration enforcement — focused on preserving critical upstream rights with owners, putting subcontractors on notice, and mitigating damages and schedule impacts. The bottom line — the contractor must preserve and assert rights in both contractual directions.

Notice to the Owner

Everything starts with the contract, and the first step is to read it carefully and comply with its notice and timing requirements. The contract typically dictates whether notice is required, the form and recipients of that notice, how the event is categorized (force majeure, excusable delay, or otherwise), and what immediate mitigation steps are expected to address schedule and cost impacts. To preserve potential claims upstream arising from unforeseen labor market disruptions, contractors should follow their prime contract to provide prompt, written notice to the owner (and others, if identified in the contract) as soon as it becomes apparent that workforce shortages beyond the contractor’s reasonable control are affecting—or are likely to affect—the project schedule, productivity, and profitability. That notice should be factual and measured, identifying the cause of the labor impact, the disrupted trades, the nature of the labor shortfall, and the anticipated impact on sequencing or critical path activities, while expressly reserving the contractor’s right to seek appropriate schedule relief and related impacts. The contractor should contemporaneously document mitigation efforts, including resequencing, supplemental crews, overtime, and coordination measures, and update the project schedule to demonstrate causation between the labor disruption and any delay. Because notice and claim provisions are often strictly enforced, early communication supported by clear documentation is essential to preserving entitlement to relief for force-majeure-type labor disruptions and defending against downstream delay or liquidated damages claims.

Notice to Subcontractors

When subcontractor labor shortages threaten project performance, the contractor must act quickly to put the subcontractor on formal notice while preserving the ability to supplement or replace the deficient workforce if the problem is not promptly cured. The contractor should issue a written notice identifying the specific scope and activities not being adequately staffed, the contractual manpower and schedule requirements, and the observed shortfall, coupled with a demand for an immediate recovery plan and daily manpower reporting (with both hopefully provided in your subcontracts). That notice should clearly reserve the contractor’s rights to supplement the subcontractor’s labor, back charge associated costs, or engage additional trades to maintain the project schedule if staffing levels are not restored within the required cure period. At the same time, contractors should document all coordination efforts and mitigation measures, including supplemental staffing, overtime, or resequencing, to establish that any intervention was reasonable and necessary. Clear, timely notice — followed by measured, contract-compliant action — helps protect the project, supports cost recovery, and reduces the risk of disputes over default or improper interference. The contractor will also need to examine and be prepared to address subcontractors’ claims for force majeure, excusable delay, or other remedies provided in the subcontracts.

Conclusion

Labor disruptions caused by sudden workforce shortages can quickly evolve into significant claims exposure if not handled in strict compliance with contract requirements. Contractors should promptly review their contracts and consult construction counsel to ensure all notice, cure, and claim obligations are satisfied and legal rights are preserved. For advice about planning for immigration enforcement, see here.