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How are Construction Jobs Counted

How are Construction Jobs Counted?

  We are probably asked that question more than any other. In general, it is always permissible to count the indirect and induced jobs from construction activity.  These are calculated using the Expenditure Model.  If, for example, construction expenditures for hard costs are $15 million, and output per construction worker in the county where the building is being constructed is $150,000, then 100 direct jobs would be created.   These can't be counted, but the indirect and induced jobs, based on the IMPLAN multiplier, can be counted.

 The USCIS has ruled that if the construction project takes at least 2 years, direct jobs can also be counted.  However, in order to use this method, you must show that the jobs are permanent.  It is the position, rather than the person, that is important here.  For example, if you were building a residential construction development with 100 homes, and an electrician worked (say) 2 weeks on each house but was employed continuously for 2 years, the job could be counted.  Also, if two different electricians worked over this time span, the job could still be counted as long as the employment was continuous.  By comparison, if you are building a shopping center and the site excavation team works for 4 months, the electricians for 6 months, and the plumbers for 5 months, and so on, all those jobs would be considered temporary and could not be counted.

Also, if you decide to use direct jobs, you must be able to produce W-2 and I-9 forms for each employee.  Some contractors are reluctant to supply that information.

The bottom line here is that unless you need the direct construction jobs to raise enough money, it is better not to count them.  The major exception to this rule is for residential projects, where the workers go from one house (or condo, or apartment) to another over a period of several years.   In those cases, we have been successful in counting direct jobs.

 A few other caveats:  only hard construction costs can be counted.  Yes, architects and engineers do represent new job positions, but they are included in the IMPLAN model in indirect jobs.  Double-counting is not permitted.

 Finally, please note that in general, you cannot use construction expenditures that took place before the EB-5 application has been filed.  This is another gray area, but to be on the safe side, you should follow this guideline.

H&A ASSOCIATES, P.C     John D. Hu, Esq.http://www.hoolaw.com/

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