A recent survey by construction data firm BidClerk revealed that construction activity in Illinois’ major metropolitan regions grew nearly 30 percent during the first quarter of 2013. As a result, Illinois construction firms may soon need to hire more employees to keep up with demand. Now is a good time to make sure you have adopted employment practices designed to minimize the risk of litigation, government investigations, and labor disruptions that may prevent you from taking full advantages of new opportunities. Here is a rundown of labor and employment risk that contractors regularly encounter, and how Much Shelist can help.

Employee or Independent Contractor?

One of the biggest issues facing contractors is worker classification. Historically, the temptation to treat workers as independent contractors has been great — no tax withholding, no employee benefits, no unemployment compensation insurance. But federal and state authorities are increasingly cracking down on employers that illegally treat employees as independent contractors. The construction industry has been specifically targetedwith more aggressive enforcement and, in some cases, substantial penalties. Every construction employer should assess whether it has a valid basis for classifying a worker as an independent contractor; experienced labor and employment counsel can assist with this analysis.

Wage and Hour

Navigating federal and state wage and hour laws can be a significant challenge for construction employers. The rules are complex, and the penalties can be steep. Our attorneys can help you comply with rules and regulations regarding minimum wage and overtime, working off the clock, meals and breaks, waiting and "on call" time, wage deductions, and exempt status issues. Considering these issues ahead of time will help minimize your risk if you are audited or sued.

Union Issues

Dealing with unions is practically inevitable for contractors in metropolitan areas. Whether you currently are unionized or not, you may need to become party to project labor agreements, respond to strikes, picketing or secondary boycotts, implement reserved gates, or defend against or institute unfair labor practice charges. Unionized construction employers face additional issues handling grievances and arbitrations or dealing with claims of delinquent contributions or unfunded liability under union-sponsored pension plans. Experienced labor counsel can keep your projects conflict-free and minimize headaches.

Prevailing Wage

Contractors performing any public work should consider whether they are subject to prevailing wage or Davis-Bacon, as the consequences of failing to pay required minimum rates can be severe. It is a common mistake for contractors to assume that because a project is not owned by a public agency, prevailing wages do not apply. On the contrary, many projects that receive public funding — though not owned by the government — are still subject to prevailing wage requirements. Our attorneys can assist you with reviewing bid and project documents, determining if prevailing wage requirements apply, obtaining written assurances from customers that projects are not subject to prevailing wages, and assisting with disputes.

Discrimination and Harassment

The diverse workforces of construction firms may create a heightened risk of discrimination and harassment claims. And, as discussed in our last issue, general contractors may be liable for the wrongful conduct of their subcontractors. You can minimize the risk of liability for such claims by implementing carefully drafted policies, providing training to your workers and supervisors, and properly addressing problems before they erupt.

Workplace Safety

Occupational Safety and Health Administration (OSHA) compliance and the potential for surprise OSHA inspections is an ongoing threat in the construction industry. Many OSHA followers expect that new and stricter workplace safety measures may be adopted in 2013, including some particularly affecting the construction industry such as new regulations regarding crystalline silica, heat-related injuries and confined space hazards.  Our attorneys can assist with OSHA compliance, investigations and litigation.

Immigration

To comply with immigration laws, all employers must require employees to complete a Form I-9 verifying their identity and eligibility to work in the United States. The employer must verify that the supporting documents presented by the employee appear genuine and that to the best of the employer’s knowledge, the employee is authorized to work in the United States. The construction industry is particularly vulnerable to immigration violations, and authorities are aggressively targeting construction firms to ferret out infractions.

The bottom line for construction firms is that they face many HR pitfalls, especially those companies that may be in a stage of growth as a result of the expanding real estate market. Experienced labor and employment counsel can help you navigate applicable laws and regulations, minimize risks, correct problems before they become liabilities, and ensure that your time, energy and resources stay focused on growing your business and capitalizing on new opportunities.