Why some companies are turning to Puerto Rico for labor

April 21, 2017 -  By

iStock-172238530-bw2Why—and how—some landscape companies are recruiting workers from Puerto Rico.

Late last year, William Merkler was on vacation in Puerto Rico, thinking about how he would reconcile his landscape firm’s contracts with the new prevailing wage the Department of Labor told him he must pay his H-2B guest workers this year—a 17 percent increase.

“We contacted our clients and told them our labor rate has gone up,” says the president of Down To Earth Landscaping, based in Jackson, N.J. “We offered to keep their contracts but told them we’d need an increase. They said ‘We love you guys, but we can’t pay that much more.’”

On his trip to the Caribbean island, Merkler considered how Puerto Rico is a U.S. territory and Puerto Ricans are American citizens who don’t need visas to work in the U.S.

He heard talk about the island’s 12 percent unemployment rate and how there was a proposal to drop the minimum wage from $7.25 per hour to $4.25 per hour for workers under 25 to help solve its debt crisis.

Then, Merkler thought, recruiting workers from the island just might be the answer to his labor woes.

He isn’t the first in the landscape industry who’s had this idea. National landscape company BrightView has done it, at least in Florida and perhaps in other markets. Large regional companies like Landscapes USA, based in Austin, Texas, and Yellowstone Landscape, based in Bunnell, Fla., are trying it for the first time this year. Austin-based CleanScapes and Atlanta-based Russell Landscape have both given it a try.

Recruiting from the island happens in other industries experiencing worker shortages, such as nursing and agriculture. It’s not a well-known practice, says Clay Martin, owner of MRC, a direct hire agency specializing in recruiting Puerto Rican workers for landscape companies, but he considers it to be a viable, long-term solution for the landscape industry.

“These guys are American citizens and have the ability to move to the states,” says Martin, who has the combined experience of interning for a landscape company in college, working alongside Spanish-speaking employees; living in Ecuador for two years in the Peace Corps; and recruiting workers from Puerto Rico for another industry. Since November, he has placed about 100 Puerto Rican recruits for 15 landscape companies, including Merkler’s. “If they have a positive working environment, it’s going to be a sustainable employment option for my clients—both the landscape company and the Puerto Rican recruits.”

The one thing all landscape companies who are turning to Puerto Rico agree on is they’re in a dire labor situation brought on by a strong U.S. economy, a limited legal U.S. labor pool and an insufficient guest-worker visa program, so any new idea is worth considering.

“At the end of the day, what are our options?” says Ivan Giraldo, president of CleanScapes. “Shrinking our business, closing down operations or keeping it very limited? Reducing the opportunities for the people who do want to work? I don’t think that’s what we want, so I don’t have any other options than to keep trying and doing what I can to make a difference.”

That said, recruiting from Puerto Rico hasn’t proven to be a panacea for CleanScapes or the other companies that have tried it. Like any new venture, there are pros and cons to this concept, and landscape contractors say they have seen varying levels of success.

Though it’s early in the process, Merkler is optimistic. A third of his 60 recruits arrived on March 20—just before press time—and the rest will follow soon after.

“It seems like we’re on to something,” he says. “We’re anxious to get the season started and get rolling in this process.”

Why Puerto Rico?

There are a few big challenges when it comes to hiring in the landscape industry, according to Ralph Egües, executive director for the National Hispanic Landscape Alliance. He says the hurdles include seasonality; the demanding nature of the physical, outdoor work; and industry image—people don’t realize the opportunity and upward mobility offered at many companies. These are issues the industry has faced for years, and he acknowledges overcoming them is “something all of us in the industry have a lot of work to do on.”

On top of these obstacles, the U.S. unemployment rate dropped to 4.7 percent in February; some say hiring illegal immigrants has become more difficult, especially in states that require E-Verify, thus shrinking the labor pool; and the H-2B guest-worker visa program is bursting at the seams.

The latter point is the linchpin. All but one of the companies LM identified that are recruiting from the island are or were users of the H-2B program and have faced challenges with it.

“Whenever I hear a company talk about H-2B they call it a ‘headache’ or a ‘nightmare,’” says Martin, the recruiter, adding all of his landscape company clients have used H-2B.

“We’ve been using the H-2B program for at least 10 years,” says Merkler, whose company employs 400 people at its peak and operates in New Jersey, Pennsylvania, Maryland and Virginia. “It seems like there are so many obstacles every year—this one being the biggest. We cannot afford to pay that (new prevailing wage).”

In addition to being priced out of the program, H-2B users lament the inability to bring in enough workers and the uncertainty of not receiving any workers due to the 66,000-worker cap imposed by the government. In some years, Congress has allowed for a returning-worker exemption, which omits returning workers from the head count, effectively raising the cap, but that’s not yet the case this year.

“With everything with H-2B up in the air, we have to look other places,” says Joseph Barnes, a spokesman for Yellowstone Landscape, which hired Puerto Rican workers as a trial in several markets this year. It’s too early to tell what the results will be, he says, but the company determined it was worth a shot. “If we could find qualified, legal domestic workers, we would be hiring them.”

Russell Landscape, which has not used the H-2B visa program, hired about 75 workers from Puerto Rico out of “desperation” a few years ago, following the passage of Georgia’s immigration enforcement bill, HB 87. The law resulted in an extreme shortage of entry-level workers across the state, due to an E-Verify mandate and other measures.

“We were looking for all options to meet our labor force needs,” says Russell of what prompted his company to attempt to recruit from the island.


Puerto Rico at a glance

  • Puerto Ricans are American citizens and have been since 1917, although they cannot vote for president and have no representation in Congress.
  • Fewer than half of Americans know Puerto Ricans are U.S. citizens.
  • Island residents participate in Social Security, but they are exempt from paying federal income taxes.
  • The island’s official languages are Spanish and English.
  • The 3,515-square mile island with approximately 3.4 million people is similar to Connecticut in terms of area and population.
  • Puerto Rican median household income is $19,350, compared with $53,889 in the U.S.
  • About 46 percent of Puerto Rican people live in poverty, compared with 13.5 percent in the U.S. Unemployment is 12 percent, compared with 4.7 percent in the U.S.

Sources: U.S. Census; The Economist/YouGov poll; United States Council For Puerto Rico Statehood


How it works

Although there are some requirements when it comes to hiring workers from Puerto Rico, for the most part contractors say it’s similar to hiring an employee from another state in terms of logistics—and risks.

“(Puerto Ricans) are not H-2B workers,” Martin says. “They do have the opportunity to work anywhere they want to. Coming here is a good opportunity for them, but it’s also a sacrifice, so you have to provide them with a positive working environment and a good offer.”

Landscape companies employing Puerto Rican workers hire them directly by recruiting on the island or through an agency.

Employers typically cover flights and arrange housing for employees. Companies say it’s a necessity. If the recruits had the financial means to leave the island to search for employment in the U.S., they would have done so already.

Unlike the H-2B program, there are no wage requirements other than U.S. state and federal laws.

Merkler, who is working with Martin’s agency, expects to start his new recruits at $11.50-$12.50 an hour, the same rate he pays local workers.

CleanScapes has done its own recruiting in Puerto Rico. Giraldo and a few of his staff members set up meeting times in coordination with the island’s Department of Labor—“almost like a job fair,” he says. They do interviews and offer jobs on the spot.

Giraldo estimates the costs to be around $2,000 per employee. More importantly, he noted, it’s complicated.

“The logistics of bringing someone, even from another state, to be so far away for three months or more, it’s a challenge,” he says. “You can also go with a recruiter. It will cost you more money, but if it fits your budget, they will do the logistics for you.”

Russell Landscape Group worked with an acquaintance from Puerto Rico to do its recruiting on the island. Russell estimates it cost the company about $1,000 per recruit for travel and upfront money the company provided the employees to get on their feet.

Martin, whose agency charges a flat fee per worker, says recruiting a worker from Puerto Rico is about the same price or cheaper than the cost of participating in the H-2B visa program. Similar to H-2B, costs vary based on travel expenses, whether you’re working with an agency or going it alone, and other factors.


Rules and regs

Companies looking to hire workers from Puerto Rico must comply with Public Law 87. It requires employers who are recruiting on the island to obtain authorization by the Secretary of Labor and Human Resources of Puerto Rico, according to Odemaris Chacón, a labor attorney with Estrella, based in Puerto Rico. Employers also must provide workers with contracts in English and Spanish.

A violation of these provisions is punishable as a misdemeanor.

For more information, contact the Employment Service Division of the Puerto Rico Department of Labor and Human Resources (787-625-3137).


Trial and error

The CleanScapes team has hired about 30 Puerto Ricans from two trips to the island over the past few years. They were hired on three-month contracts with the option to stay longer. Four are still employed by CleanScapes. Others have left the company to join family members on the East Coast, or they have returned to the island.

Of the 75 workers Russell Landscape hired from Puerto Rico, there are only a few remaining; they work in the company’s Nashville branch.

“It was quite a flawed effort,” Russell says of his company’s attempt at recruiting from Puerto Rico. “Many of them were just not the quality of worker that we were accustomed to. And a few of them were very good but became homesick or returned to their home country for whatever reason.”

Russell acknowledges his company’s lack of success may have been due to poor recruiting.
“If you went down there with the proper scrutiny and really vetted the individuals, I think you could be successful,” he says.

Giraldo says he wishes he knew why his success rate hasn’t been higher. He believes it’s a combination of things, including factors like employees’ difficulty being away from their extended families and a lack of employment opportunities in Puerto Rico that has left workers unprepared for the rigors of a job in the landscape industry.

Still, Giraldo intends to recruit on the island again. He says he will do some things differently, such as venturing outside the cities and into the agricultural areas.

“I do think the potential is there—it’s finding where (good workers) are,” he says. To other companies considering this strategy, Giraldo says, “Have a lot of patience, save a lot of money and fill yourself with persistence. I would say, ‘Try it.’ We’re running out of options.”

Photo: ©istock.com/WoodenDinosaur

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About the Author:

Marisa Palmieri is an experienced Green Industry editor who's won numerous awards for her coverage of the landscape and golf course markets from the Turf & Ornamental Communicators Association (TOCA), the Press Club of Cleveland and the American Society of Business Publication Editors (ASBPE). In 2007, ASBPE named her a Young Leader. She graduated with a Bachelor of Science in Journalism, cum laude, from Ohio University’s Scripps School of Journalism.

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