Archive for the ‘Labor Law’ Category

Louisiana Contractors – Workers Compensation Insurance

Back in 2009 this blog reported on the very topic of Workers Compensation insurance, stating that 1 and 5 businesses are breaking workers compensation laws. In my everyday practice, I feel like the trend is still prevalent in the construction industry. The main reason being is due to the exorbitant price of this insurance on contractors.

Workers Compensation is codified in Louisiana under Revised Statute 23:1021 et seq. There are a myriad of rules and definitions within this chapter of the code that would make any contractors head spin. There are a few key items to remember when classifying employees. First and foremost is that there is a presumption of employee status, as seen in La. R.S. 23:1044. This can be overcome by a number of factors which would make the worker, an independent contrator rather than a employee. La R.S. 23:1045 is where the law states that independent contractors and subcontractors are exempt from coverage. Although the price to insure all employees under workers comp insurance is high, the price that is paid if an accident happens to an uninsured worker is much higher. Furthermore, when the insuring companies do an audit at the end of the year of the status, there can be a hefty price tag for improper reporting.

I represent a number of clients who are learning the hard way that companies like LWCC and Louisiana Home Builders Association are not fun to litigate against for a contractor trying to make profits. These companies have either in-house attorneys or law firms who handle these cases day in and day out. There is almost no incentive for them to settle claims because there is no fear of pricey litigation. As for the contractor, attorney fee bills keep going higher and at the end of the day the contractor can pay double and triple of what they would have if they had properly reported or settled early.

So let this be a warning to all contractors who are trying to push the line when it comes to workers compensation insurance, its just not worth it. Just like fighting any insurance company, even if the insurer is wrong, they will fight to the bitter end to be proven so. Taking an early haircut, so that you can get back to making money in the industry, can be a win-win for your construction company.

Posted in:     Construction Contracts, Construction News, Disputes, Insurance, Labor Law, Litigation, Louisiana, Payment Requirements  /  Tags: , , , , , , ,   /   1 Comment

New Orleans City Council Passing Construction Requirements

Two weeks ago the New Orleans City Council passed and ordinance that is purported to beef up labor violations for city construction contracts. The council was sharply divided whereby the ordinance passed by a 4-3 final vote.

The ordinance is best described by the City Council’s own publication:

“The Council adopted Ordinance Cal. No. 28,899, authored by Council Vice President Granderson that requires that contractors and subcontractors with city construction contracts of more than $50,000 report to the City Attorney any current company violations of federal, state and municipal laws that govern labor and employment. Specifically, the contractor is required to give notice to the City Attorney within 90 days of the issuance of any labor violation determination. If the contractor fails to correct the violation within a 90 day period the City Attorney will issue a written notice to the contractor and take enforcement action including civil remedies.”

There are many supporters and critics of the new ordinance. Many of the opponents say that it will just create needless paper work for contractors and will not solve the root cause of the problem. Although, supports say that since Katrina undocumented workers have been hurting union workers doing it by the book. The New Orleans City Business and NOLA.com both have their takes on the issue with good write ups. Overall this sounds like it will create more paper work for contractors and subject them to vague and ambiguous labor laws (where they are already subject to them anyway).

Having dealt with the City Attorney’s office in the past, this seems like it will simply be a bullet in its gun when going after small businesses. The city claims that if contractors are obeying the law they have nothing to worry about, unfortunately based on past client experiences, that is not likely the case. Just what the construction industry needs right now, another law.

Posted in:     Building Codes, Business Matters, Construction News, Labor Law, Louisiana  /  Tags: , , , , ,   /   Leave a comment

How To Challenge An Unemployment Claim in Louisiana

When an employee is terminated and claims unemployment benefits in Louisiana, the claim is associated with your business’ account and will affect your unemployment insurance rates in the future. It’s no secret that people can abuse the unemployment benefits system. Unfortunately, the burden really falls on employers to prevent abuses.

In Louisiana, unemployment claims are administered by the Louisiana Workforce Commission. Whenever an employee is terminated, the employee will be entitled to receive benefits unless: (i) The employee was terminated for misconduct that makes them ineligible for benefits; or (ii) The employee voluntarily quit the employment.

La. R.S. 23:1601 explains what qualifies as “misconduct” or “voluntary termination.”

Misconduct means “mismanagement of a position of employment by action or inaction, neglect that places in jeopardy the lives or property of others, dishonesty, wrongdoing, violation of a law, or violation of a policy or rule adopted to insure orderly work or the safety of others.”

Voluntary termination requires leaving an employment post “without good cause attributable to a substantial change made to the employment by the employer.”

If a former employee has applied for unemployment benefits and you contend that the employee does not qualify, you’ll need to provide the Louisiana Workforce Commission with sufficient information to justify your position. We’ve created an Avvo.com Legal Guide on this subject, giving you a step-by-step guide on how to challenge these unemployement claims.

Read the Avvo Legal Guide here. We’ve summarized the steps below.

  1. Determine Whether The Unemployment Claim Has Merit:  An obvious first step, as there’s no use in fighting an unemployment claim that is eligible for benefits.
  2. Pay Attention to Deadlines: The deadlines can be super short (10-15 days), and failing to meet a deadline is fatal to opposing a claim.
  3. Document Your Position: The more you provide to support your position, the better chance you have. Send your story to the commission in a letter, but also send statements, emails, photos, videos, documentation, payroll records, etc.
  4. Consider Hiring Counsel: If the going gets tough, you may want to hire an attorney to help prepare your position.
Posted in:     Business Matters, Labor Law  /  Tags: , , , , ,   /   Leave a comment

Is The Nailed! Blog “Nailing” Companies Before A Fair Investigation?

A couple of weeks ago, we posted about a new blog out in the blogosphere that is of interest to the Washington construction industry:   Nailed!

The blog is published by Washington’s Department of Labor and Industries, through Carl Hammersburg, the department’s Fraud Prevention and Compliance manager.  The blog focuses on fraud prevention and compliance with L&I regulations.

It’s not shy about it’s goal.   The blog is called “Nailed,” and it’s sending a message to its regulated industries that it will be nailing those not in compliance.

While I generally like the blog and its content (and sometimes share it on my Twitter account), I was a bit upset by an October 25th post:   Tragedy reveals hidden cost of independent contractor label.

The post discusses a very hot topic:  the distinction between independent contractors and employees.   I’ll be the first to tell you that the independent contractor label is often abused, with companies – big and small – holding benefits from its employees by labeling them an “independent contractors.”    Just because you call someone an independent contractor, doesn’t make it so.

The blog post uses a recent tragedy to “reveal the hidden cost” of improperly using the independent contractor label.

According to the post, a Burien two truck driver lost his life in an accident, and his family contacted L&I requesting death benefits.   According to L&I:

That’s when we discovered his employer had not paid for the insurance that would entitle his family to death benefits.

The owner of the tow truck company claims the victim was an independent contractor, not an employee. Even though the man was insured by the company and drove company-owned trucks, the owner insists the man killed met the guidelines to qualify him as an independent contractor.

So, what will come next in the story?   Sounds to me like L&I is going to explain how they investigated the incident and discovered that the tow truck company violated regulations and misclassified the deceased man as an independent contractor.

But no, the post goes on to say this:   “We’re opening a review of this incident…to determine if these claims hold water…”

Wait!   They didn’t already investigate this?   From the setup of this blog post – after all, look at its title – it seems like the department had already made up its mind about this.   They haven’t even investigated the incident yet!?

To highlight that apparent bias that L&I will have entering the investigation, I commented on the blog post with the following:

Hi Carl – Let me start by saying I’m a big fan of the Nailed Blog, and the concept behind it. I am a reader and subscriber, and frequently refer to it on our blog: http://www.constructionlawmonitor.com.

As an attorney who represents clients in the construction industry, we confront this “independent contractor v. employee” issue a lot. There is certainly a problem with the label being used incorrectly. I find that folks don’t use it incorrectly on purpose…they just don’t understand the distinction. After all, the distinction can get quite technical.

All that aside, I’m commenting because I didn’t like this post. Let me explain.

In reading the first three paragraphs, I assumed that L&I had already opened an investigation and closed it: finding the towing company was in violation. But then I encountered the fourth paragraph: “We’re opening a review of this incident…”

Wow! If this were any other blog, I wouldn’t be caught off-guard by the commentary. But since Labor & Industries will be the government agency investigating this incident and the towing company’s conduct, I was surprised that the agency would be starting the investigation with such bias.

This is unfortunate. There are circumstances where the independent contractor label would be appropriate, and maybe this is one of those circumstances and maybe its not. But I think Nailed! went a little too far with this post, as it seems like L&I made up its mind upon hearing the sad story…and not the facts.

It’s unfortunate, but sometimes it seems like government agencies have an agenda of their own, and they plow through honest legal questions and determinations to advance their agenda.

I sympathize a great deal for the Burien man who lost his life, and for his family.    And if the tow truck company was improperly classifying employees to save money, they should be nailed.

But we don’t know that yet.   It’s too bad that the department with the first crack at making that determination seems to already have made up its mind.

Posted in:     Labor Law, Regulations  /  Tags: , , , , ,   /   2 Comments

E-Verify Required in Mississippi on State and Private Projects

At the Construction Law Monitor, we’ve traced the history of the E-Verify requirement from President Bush’s aggressive regulation to the less severe Obama one.   Along the way, there has been a lot of discourse about the federal requirements, and specifically the requirement that E-Verify get used on every federal contract, and even those contracts that just use federal funds.

Here is something we haven’t mentioned:   State Requirements.

Some states have passed legislation requiring E-Verify on state funded projects, and even on qualifying private projects.

Most notable for our Louisiana clients is legislation passed (and in force) in Mississippi.

The Mississippi Employment Protection Act is the culprit in that state, and the folks over at the I-9 and E-Verify Blog published this excellent summary of the law’s e-Verify component:

The Mississippi Employment Protection Act has also been implemented in stages, mandating E-Verify registration and participation for state agencies and political subdivisions, all public contractors, all public subcontractors, and private employers with two hundred fifty (250) or more employees starting July 1, 2008; private employers with at least one hundred (100) but less than two hundred fifty (250) employees on July 1, 2009; and as of today, private employers with at least thirty (30) but less than one hundred (100) employees. The law will further expand to cover all employers in Mississippi on July 1, 2011.

Employers that do not comply with the law by the applicable effective date may have any existing state contract terminated and become ineligible for public contracts for three years, or have any license, permit, or certificate allowing the employer to do business in Mississippi suspended for a period of one year, or both.

If you’re doing work in Mississippi, be aware that the e-Verify requirement is much broader than elsewhere in the country.   Other aggressive states?   South Carolina and Utah are among them – anyone else know of any others?

Posted in:     Around The Web, Labor Law  /  Tags: , ,   /   1 Comment