In this four-part article, Miami construction attorneys are discussing ten ways that construction firms can find themselves in hot water when they commit labor law infractions. Violations of labor laws can lead to a Department of Labor hearing, In the first part, we covered a few common violations including construction firms that fail to pay their workers minimum wage or overtime pay. In this part, we will discuss two other common mistakes: recordkeeping gaffes and worker misclassification.
3. You Don’t Have a Reliable Recordkeeping System
Whether you own a small, midsized, or large construction business, you need to have an accurate recordkeeping system in place that stores all of your valuable company documents. For example, any information related to employees’ wages, timesheets, or payroll records needs to be documented and maintained. If the Department of Labor (DOL) investigates your workplace and you are unable to provide access to these records, you will face additional penalties.
Unfortunately, this is not an uncommon occurrence in the construction industry where most projects have a lot of moving parts including professionals joining and leaving a project. Before bringing any professional onto a project, you need to perform your due diligence and obtain important personal information for every worker. You also need to track each worker’s time accurately. Firms should use their discretion to achieve this through a Human Resources department, a third-party accounting firm, or an efficient software program.That said, you also need to utilize a reliable system for storing this valuable data.
4. You’re Misclassifying Workers
A common issue in the construction industry involves employers misclassifying members of their workforce. In some cases, worker misclassification can be a willful act by the employer to skirt paying taxes and additional benefits for these workers. In many other cases, the employer may not understand these laws and is unaware they are misclassifying their workers.
Generally, there is a “control” factor that determines if a worker is classified as an employee or independent contractor as detailed in the following examples:
- Employee: If the employer has the authority to “control” the worker’s tasks, this is considered an employee. For example, if an employee is required to exclusively work for one employer, arrive to work at a specific time, perform tasks instructed by their employer, and they are given paid time off, company property (phone, uniforms, or vehicle) and equipment to perform their tasks, then the employer has “control.”
- Independent Contractor: If the worker has the right to supervise their own work, during their own time, has their own business operation, and can work for any employer that they want to, then this describes an independent contractor that can “control” their work environment.
Worker misclassification affects millions of people in the United States every year. It’s critical that construction firms classify their workers correctly to ensure they are compliant with the law. Even if workers voice that they are fine working as independent contractors, if the DOL uncovers misclassified workers during an investigation, this can still result in costly citations. Consult an attorney to ensure that nobody at your jobsite is being misclassified.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.