'Isn't sitting well' is almost a slang term. I will create an example: Allison: "My ex-boyfriend invited me to go to dinner with him." Allison's husband: "That doesn't sit well with me" (He is NOT okay with his wife meeting with her ex-boyfriend) The fact that they raised taxes isn't sitting well with the community. It will never be 'aren't' sitting well. Isn't sitting well: That isn't sitting well with me. Doesn't sit well: That doesn't sit well with me. Didn't sit well : It didn't sit well with me.

To say something doesn't sit well with someone means that they are not comfortable with/happy about the situation. And isn't is quite correct. Perhaps you are thinking that because 'laborers' is plural, isn't should be aren't? However, it is the on-rush that isn't sitting well, so isn't is correct.