Archive for the ‘Labor Law’ Category

Two New Washington Laws Contractors Must Know From the 2009 Legislature

On January 14, 2010 Author By Scott Wolfe Jr

As we enter it a new year, we thought it was prudent to review what the Washington legislature passed last year that is now law and affecting the construction industry.

Earlier this week, we wrote about the small amendments to the Contractor Registration Act.

More changes to Washington’s regulatory scheme passed into law in 2009 aside from these small amendments.   In this post, we’ll discuss SB 5613 which authorizes L&I to issue stop work orders on employers not in compliance with workers compensation requirements, and SB 5904 which defines an “independent contractor” on public works projects.

Stop Work Orders Allowed on Contractors Who Do Not Pay Workers Compensation

SB 5613 was passed by the Washington legislature, and became effective in July 2009.   This new law provides Labor & Industries with an additional mechanism to enforce the worker’s compensation requirements for contractors:  stopping work.

Previously, L&I could fine employers and contractors in violation of the workers compensation provisions, but couldn’t actually force the contractor to stop work.   Now, a new section has been added to RCW §51.48 giving L&I this stop work authority.

If an employer is in violation of the workers comp requirements, L&I can force the employer to stop work on that project (and other projects where there are violations) until the employer gains compliance.   Becoming compliant will require the payment of any assessed penalties and interest.

What happens if the employer doesn’t stop work after being so ordered?   Paragraph (4) of the new section subjects the employer to a $1000 per day penalty until the employer is in compliance.

The new section is clearly aimed at punishing employers dearly if they are not compliant with the workers compensation statutes.   Where penalties alone didn’t always work in the past, now L&I can hurt contractors on jobs.  If an employer must stop work, obvious problems arise:  will they get paid for work done?  will they be responsible for delay damages on the project?   will the job be given to another contractor?

Getting clever and opening a new entity with less baggage will be of little use under the new section.  Paragraph (7) contemplates this circumstance, and provides that stop work orders are effective against “any successor…business entity that has one or more of the same principals or officers…”

Read the passed SB 5613 here.

Independent Contractor Defined for the Purposes of Prevailing Wages

In the past, much argument has ensued on public works between Washington’s Department of Labor & Industries and contractors over whether a party or entity is an employee or an independent contractor.

The consequence to the distinction is clear.   If an employee, prevailing wage rates must be paid.  If an independent contractor, the prevailing wage rate may not be required.

Well, SB 5904 adds a section to RCW 39.12 to clear up the ambiguity.

Regardless of how an employer attempts to label a party/entity, they will be considered a laborer, worker or mechanic unless all of these factors are met:

  1. They have been and is free from control or direction over the performance of the service, but unde under the contract and in fact;
  2. The service provided is either outside the usual course of business for the hiring contractor or the service is performed outside the places of business for the hiring contractor;
  3. The party/entity is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the instant contract;
  4. The party/entity is responsible for filing at the next applicable filing period a schedule of expenses with the IRS;
  5. The party/entity has an active and valid certificate of registration with the department of revenue, and all other required registrations;
  6. The party/entity maintains a separate set of books or records reflecting all items of income or expense of the business; and
  7. The party/entity is a registered contractor, if required.

Read the passed bill’s full text here.

This article was originally posted on Wolfe Law Group’s topic-specific Northwest Construction Law Blog.

Posted in:     Labor Law, Prevailing Wages, Washington  /  Tags: , , , ,   /   Leave a comment

Are Your Employees Checking Email Through Mobile Devices? Are You Paying Them Overtime?

On September 15, 2009 Author By Scott Wolfe Jr

No long introduction required here.  With iPhones, Blackberrys and laptops, everyone in the 2009 workplace knows that work can follow an employee home and to vacation (ABCNews published a good overview of the issue).

Recently, however, terminated employees are seeking compensation for this “overtime” work through costly litigation with high-stakes for employers across the country.

What will the courts say?  It’s not clear.

The U.S. Fair Labor Standards Act was passed in 1938 with working conditions for factory workers in mind.   These workers punched into work, and out of work, with very little opportunity to continue their work duties after-hours while at home or on vacation.

But how times have changed.    And now, when you take the FLSA’s rule that workers must be paid overtime whenever they work 40+ hours (regardless of any permission from an employer), and apply it to the “after-hours” work performed by so many of the country’s workforce…the result is complicated.

In today’s economic client, construction companies are looking to be leaner and meaner, and that sometimes means less salary workers and more hourly employees.  It also means companies are working to maximize the return on each worker.

More and more, construction workers and project managers are being outfitted with mobile devices to communicate about the project through email and text messages…and even to take photographs of the jobsite and work through project management systems.  When the mobile devices go home or on vacation…is your company prepared to pay overtime?

Right now, the law on this issue is simply unclear, and the best practice for those in the construction industry is to discourage workers from working at home or on vacation (don’t bother them!), or to ask workers to log this time and turn it into your company for payment.

There’s no telling how the courts will decide this issue, but if it goes against employers, the failure to pay employees for out-of-office work could be expensive.

Posted in:     Federal, Labor Law  /  Tags:   /   Leave a comment

A Final Answer on E-Verify? Can it be?

On August 31, 2009 Author By Scott Wolfe Jr

We’ve monitored the federal government’s potential E-Verify requirement for nearly a year now.   After a number of delays starting in 2008 and continuing until this summer, the E-Verify requirement was finally given the green light in July 2009.

While backed by the new President and slated to take effect on September 8, 2009, there seemed to be just one more hurdle:   The litigation challenging it.

Today, AGC’s Smart Brief reports that a federal district court has ruled on the legality of the controversial E-Verify requirement, holding that the requirement is legal.

On September 8th, therefore, systems are a-go for the E-Verify requirement.

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

E-Verify Required Starting September 9, 2009. Is it Really Going to Happen?

On July 14, 2009 Author By Scott Wolfe Jr

E-Verify, a government web-based system that helps employers verify a workers legal status, has been in the news before.

Originally a George W Bush executive order, E-Verify was slated to become mandatory for federal contractors beginning January 15, 2009.   The change in executive administrations and a handful of lawsuits, however, pushed the requirement back indefinitely.

This week, the Obama administration chimed in on the subject, and announced that it would support the E-Verify requirement, and that it would take effect across the country starting September 8, 2009.   Appropriately, the day after Labor Day.

Any federal projects or businesses receiving money under the federal stimulus program will be subject to the rule, and required to register and use the E-Verify system.

Differences Between Obama E-Verify and Bush E-Verify

When comparing the Obama E-Verify requirement and the Bush E-Verify requirement, one difference stands out:   Obama has ditched the “No-Match” system.

As a result, for better or worse, the requirement going into effect this September will have substantially less teeth.

Ditching the “No-Match” component of the E-Verify requirement will benefit employers because they will not be required to terminate (on such a tight time-line) employees whose social security numbers do not match with the system.

It will benefit workers, too, because Obama will not allow the federal government to use mismatched SSN data to find illegal immigrants in the workplace.

Is It Really Going To Happen This Time?

The short answer:  Yes.

While it has been delayed repeatedly in the past year, and there’s always a possibility for more delay, it looks like the latest effective date will stick.

The Obama administration has reviewed the requirement, and is now standing behind it, and by ditching the most controversial aspects of the rule, there will be fewer legal and political challenges.

Beginning September 8, 2009, therefore, the government will award contracts only to companies in compliance.

Who Needs to Be Prepared?

A lot of people need to be prepared for this E-Verify requirement.

While the controversial components of the requirement have been removed by Obama, the scope of the rules applicability has actually gotten broader.   The requirement will not only apply to contractors and subcontractors on federal projects, but it will also apply to any business receiving money under the federal stimulus project.

With the influx in federal and state spending on construction projects, and the decrease in private work available, more and more contractors are being forced into bidding and working on public works.  And with the now wider reach of the E-Verify program, contractors and subcontractors need to prepare themselves.

In February 2009, we wrote a post here at the Construction Law Monitor titled “The Stimulus Package and Your Construction Business.”

The post discussed the differences between private and public works, and addressed some of the issues private contractors face when working on its first public project.

Add the new E-Verify requirement to the list, and the article is still a good read.

Is this Still Controversial?

Even with Obama’s backing of the system and some tweaks to its enforcement power, the E-Verify program definitely still has its detractors.

The San Bernardino Sun News just ran an article about how the E-Verify system puts Obama at odds with some democrats.

Despite the controversy, the E-Verify requirement will take effect on September 8th, and construction companies around the country must be prepared.

Posted in:     Federal, Labor Law  /  Tags: , ,   /   1 Comment

EFCA Compromises On The Way?

On March 18, 2009 Author By Scott Wolfe Jr

The Employee Free Choice Act has not had a dearth of news coverage, and just last week, the Democrats in Congress officially unveiled the controversial bill.

While predicted to “sail” through the House, it faces a serious challenge in the Senate according to the Wall Street Journal.    The WSJ reports that many leading Senate Democrats who previously voiced support for the bill have backed off recently, perhaps in light of the controversy garnered by the act.  Louisiana veteran senator, Mary Landrieu, is among those democrats reconsidering their positions.

The most controversial aspect of the act – by far – must be the proposed eliminate of “secret ballots” to determine unionization, and the substitution of the secret ballots with a “card check” system.

While labor unions has previously urged that it would not compromise on the EFCA, with the bill’s potential failure in the Senate, AOL News reports that democrats may be open to compromising on the proposed card-check system.

As the debate continues, so will news on the EFCA.   You can follow our discussion of the act’s progress at this tag:  Employee Free Choice Act

Posted in:     Federal, Labor Law  /  Tags: , ,   /   Leave a comment
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