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Why Your Construction Business Needs a Legal Budget

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When you think of legal costs, you might think of lawsuits and litigation. However, legal costs can include having a lawyer review bids, contracts, and employment documents. For a new business, legal help can be vital to protecting your trademarks and establishing your brand. Because some legal costs are routine, it’s important to establish a budget so your company can pay for the legal services you need.

An Asheville construction lawyer explains why you need to establish a legal budget within your business in this article.

Starting a Business

Starting a business isn’t easy. You will need to prepare for important steps like applying for a business license and trademarking your business name and logo. Plus, you’ll have to plan for the costs associated with them. You should research these costs before beginning the paperwork to register your business. Some costs you may not have originally accounted for could include important paperwork. Once you’re ready to hire employees, you’ll need employment contracts to protect your company from possible future legal issues. Although basic employment paperwork is available online, it’s often beneficial to have documents customized for your business’ needs.

Minimizing Your Legal Risks

Audits to ensure compliance with laws, regulations, and the Occupational Safety and Health Administration (OSHA) are a great way to minimize your legal risks. An Asheville construction attorney can help you prepare for an OSHA inspection and establish procedures for the possibility of receiving a citation.

You can also minimize your risks by having contracts reviewed or drafted by a construction lawyer. They know the ins and outs of construction law and how to protect your rights while keeping a good relationship with owners, suppliers, or subcontractors.

Litigation

It’s best to set aside money for legal representation before anyone makes a legal complaint against your business. Your lawyer can better assist you if they know your business well. Regardless of who the court rules in favor of, you may still have to pay your own legal fees.

If you would like to speak with an Asheville contractor lawyer, contact us today.

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.

The first part of this article went over the application process and parties involved in bonds and insurance. A Raleigh contractor lawyer explains the difference between bonds and insurance when claims are involved in this part.

Handling Claims

Insurance and bonds handle claims very differently. Put simply, insurance companies expect to pay claims and bond companies do not expect to pay claims.

When a claim needs to be made against insurance, the contractor is normally the person to file the claim. The insurance company is paid a premium by the contractor and ultimately expects to pay if something goes wrong on the jobsite.

Because the contractor does not want to fail in constructing the project, the bonding company does not plan to pay out to the owner. If there is a claim made against the bond due to failure of the contractor, the surety has to pay the owner on behalf of the general contractor. In that case, the general contractor is supposed to pay the money back to the surety.

A bond claim can make the general contractor’s life more difficult. Bonding in the future depends on the ability of the contractor to solve any problems with the owner instead of being paid by the bonding company. If the situation is such that the bond company has to pay the claim, it is unlikely the contractor will have enough liquid assets to pay back the surety. It may signal the end of the construction business.

Help with Claims

Cotney Construction Law is knowledgeable in insurance and bond law. We help our clients with insurance claims and any construction-related bonds. We can help you with all the necessary documents for a bond claim, including preliminary, final, and Miller Act notices.

Our Raleigh construction law firm can advise you on how to handle a bond or insurance issue. Contact us today.

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.

Risk is abundant in the construction industry. Risks can be associated with building, installation, or money. Insurance and bonds offer different kinds of risk protection in exchange for the general contractor’s payment. While bonds and insurance reduce risks for contractors and owners, bonds are generally meant to protect clients. Clients are attracted to a contractor who is bonded because they see a layer of protection. Insurance is meant to protect the contractor from the cost of accidents, floods, and things beyond their control.

What is the difference between insurance and bonds? A Raleigh construction lawyer explains the similarities and differences of insurance and bonds in this two-part article.

Application Process

Applying for construction insurance is fairly straightforward. It’s much like applying for other types of insurance, like health insurance, which you’ve probably done. For construction insurance, you normally answer some questions to receive a quote and choose the coverage that makes sense for your business.

When you apply for a bond, the company supplying the bond will have its own application criteria. This process is more involved than the insurance application process. Most surety companies will check if you have the right skills, abilities, and resources to perform the contract to the owner’s requirements before they will bond you.

Parties Involved in the Contract

Insurance is more straightforward than bonds are in this regard. It is an agreement between the contractor and the insurance company. Only two parties are involved in this agreement, which is familiar to most people. Contracts for bonds are more complicated.

Bonds involve three parties: the contractor (the principal), the project owner (the obligee), and the bond company (the surety). The general contractor agrees to pay a premium to the surety for the privilege of being bonded and promises to pay back the money the surety pays in case of a claim. In turn, the surety becomes obligated to the owner for the responsibilities of the contractor if the contractor does not perform their duties to contract or pay the subcontractors.

In part two of this article, we explain what happens when claims become involved in insurance or bonds.

To speak with a construction lawyer about a Raleigh construction bond or insurance claims, contact us today.

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.

Uber introduced peer-to-peer rides years ago, but the ridesharing giant has grown exponentially with over 50 percent growth in several quarters last year and a total valuation of $72 billion in 2018. With billions of trips delivered worldwide, ridesharing applications rely on millions of drivers annually in order to meet the demand. These drivers are considered independent contractors meaning that they are essentially freelancers who are not covered by wage and hour restrictions.

In this two-part series, a wage dispute lawyer in Tampa is discussing this rapidly emerging industry and how the trend towards “gig economy” jobs impacts job statuses in all industries. In the first part, we covered many of the reasons why employers prefer the job status of “independent contractor” over “employee.” In this section, we will cover how gig economy jobs may eventually change the way employers look at wage and hour laws moving forward.   

The Gig Economy and Legal Disputes  

Litigation is underway in many states across the country as Uber drivers and other workers in the digital world contest that they are being misclassified as independent contractors. The first federal ruling on this topic sided with the tech companies. In other words, workers are in fact independent contractors. However, the concern is that as digital retail and restaurant delivery services become more prominent, long-established wage and hour protections for employment positions will also become compromised during this transition.

The Death of Big-Box Stores

As Sears files for bankruptcy and brick and mortar retail stores reside on the brink of extinction, employment opportunities will continue to shift away from big-box stores and more into the digital world. In fact, even long-standing fast food restaurants like McDonald’s are now offering delivery services of their Big Macs. When companies face certain financial uncertainties, unfortunately, the first thing compromised is often the responsibility to treat employees fairly in wage and hour issues.

Whether you work in retail, the service industry, manufacturing, healthcare, or a variety of other industries, an employer can easily misclassify your job status. When you are wrongfully misclassified, this can lead to unpaid wages, zero benefits, among other risks and negative circumstances. Hopefully, as new technologies and the digital world continues to emerge as a job creator, many wage and hour protections will be established along with these opportunities. Regardless, a wage dispute lawyer in Tampa is always here for consultation.  

If you would like to speak with one of our wage dispute lawyers in Tampa, please contact us today.

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.

With the digital revolution in full swing, consumers can take advantage of prime retail deals delivered directly to their doorsteps, a chaperone standing by to escort them around town, and an excellent meal served straight to their kitchen table from any eatery in town. The only problem is that in any of these circumstances, the business model relies solely on independent contractors to provide this delivery service.

In this two-part article, a Tampa wage and hour attorney will discuss the employment impact of a growing trend in online ordering and delivery platforms. With the number of independent contractors reaching a staggering total in the United States, the companies that compensate these individuals are often flirting with a variety of potential wage and hour law violations. Remember, if your employer has failed to comply with wage and hour laws and you are owed additional compensation, consulting with one of our experienced Tampa wage and hour attorneys can help you reach a beneficial outcome.   

Independent Contractor Statistics

According to the National Bureau of Economic Research, independent contractor positions have increased by nearly 40 percent over a 10-year stretch from 2005 to 2015. Unfortunately, many of these “employment opportunities” violate federal wage and hour laws. In fact, depending on the state you reside in, anywhere from 10 to 20 percent of businesses located in the United States misclassify at least one employee in their workforce. If you work in housecleaning, in-home health care, trucking, retail, or the service industry, chances are that your job status is more prone to being misclassified than other industries.

How Employers Maximize Their Profit Margin        

If undetected, an employer can enjoy many benefits by misclassifying a worker’s job status. Here are the primary ways that an employer can maximize their bottom line by misclassifying their employees as independent contractors:

  • Zero Benefits: Employers can avoid paying high workers’ compensation premiums, payroll taxes, and health insurance when they hire independent contractors.
  • Unemployment: If the employee leaves their position, they are ineligible for short-term benefits like unemployment insurance.  
  • Wage Issues: Misclassified employees do not earn overtime pay and are susceptible to wage theft. Moreover, many independent contractors fail to earn minimum wage.

If a business is deliberately misclassifying their employees, this impacts more than just their workers. Without income taxes, this affects federal and state governments along with workers’ compensation, disability, and unemployment insurance services. In the end, these government systems lose revenue through the misclassification of positions.

For more information on how new technologies impact wage and hour laws, please read the second section.        

If you would like to speak with a Tampa wage and hour attorney, please contact us today.

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.

The scope of work (SOW), or statement of work, is an important component in a strong construction contract. A scope of work best serves a contractor if it is specific and well thought out. Whether between owner and contractor or contractor and subcontractor, this section is vital to maintaining good relationships on the jobsite. It creates an understanding between parties about what is expected, how it will be executed, and when it will be completed.

In this article, a construction lawyer in Wilmington, NC, details some of the best practices for creating a scope of work in a construction contract.

Why Draft a Scope of Work?

The scope of work details the expectations of what the owner wants you to do for the project. This portion of the contract determines how a project will be carried out, when the deliverables are due, and may even keep you out of legal disputes. The SOW is one of the most disputed parts of a construction contract. The more clearly defined the roles, responsibilities, and the time frame are for the parties involved, the less chance of misunderstanding there is.

Elements to Include in a Scope of Work

These elements will help define and lend clarity to your scope of work. It is important that there aren’t multiple ways to interpret your scope of work to keep the risk of legal issues down to a minimum.

Project statement: describes the purpose, objective, and any issues that need to be addressed

Project scope: includes technical and monetary information, including costs, estimates, and how performance will be measured

Project schedule: lays out the timing of the different phases of the project, due dates of deliverables, and the expected project completion date

Project management: explains actions for the project administrator to take as far as payments, changes, and limitations of the project

Glossary: defines key terms to eliminate any confusion of meaning

Help Drafting a Scope of Work

Both parties are aided by having a contract with a strong scope of work. If you need help drafting a construction contract, a knowledgeable construction lawyer from Cotney Construction law can help you.

To speak with a contractor attorney in Wilmington, NC, contact us today.

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.

In industries like construction, injuries will transpire. Although employers do their best to implement a successful safety management plan, it’s also important to have an effective workers’ compensation claims management system in place. When you fail to comply with Florida state laws that require a workers’ compensation plan, this can lead to a significant fine and a stop-work order in Florida.

In this two-part article, we are discussing many of the mistakes employers do not want to make related to workers’ compensation coverage. In the first part, we discussed two common gaffes by employers: when they do not have an accurate payroll estimation in place and when they fail to obtain proof of insurance from subcontractors. In this section, a stop-work order attorney in Florida will discuss employers who do not closely manage their workers’ compensation claims.

More Than an Expense

Here are some ways that employers negatively impact their business by failing to properly manage their workers’ compensation premium:  

  • Failure to Report an Accident: In Florida, an employer has seven days to report an injury. If an employer fails to report an injury to their insurance company, this can lead to a stop-work order being issued along with excessive fines. When an accident transpires at the workplace, the employer’s first step should be to report the injury as soon as possible to their insurance company.  
  • Lack of Investigation: Regardless of the severity of an injury, employers that fail to identify the hazards or shortcomings of their operations will likely fail to implement corrective actions that will prevent similar injuries from transpiring in the future (resulting in raised premiums). Every workplace injury requires an investigation. This not only helps prevent similar mishaps from occurring, but it also improves workplace morale. At the conclusion of your investigation, you should determine whether or not safety rules were followed and whether or not the safety training onsite was sufficient.  
  • Failure to Communicate: When an injury befalls the workplace, an employer that fails to regularly communicate with either their insurance adjustor or their injured worker will face increased expenses. With a worker out, the employer should be motivated to close the claim quickly by working with both parties through the claims process. This includes creating a return to work program for the injured worker that eases them back into the workplace. This also improves morale and reduces the total cost of their workers’ compensation claim.

Employers will find that when they do not look at their workers’ compensation coverage as simply another expense, and rather as an investment, they can reduce costs and create an effective system that gets their employers back in the workplace more quickly.

If you would like to speak with a stop-work order attorney in Florida, please contact us today.

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.

Workers’ compensation laws were adopted for two primary reasons. First, they are designed to protect workers from a significant loss in payment when work is missed stemming from a workplace injury. Second, they assist the worker with the recovery process through payment of medical bills, rehabilitation programs, and other recovery services.

Employers need to not only be mindful of implementing the best safety practices, they also need to make certain that they avoid many common mistakes that can lead to higher workers’ compensation premiums. In parts one and two of this two-part article, a Florida workers’ compensation lawyer will discuss some ways that employers impact their bottom line when they fail to control claim costs.

How are Workers’ Compensation Costs Calculated?

Every employer should know how their workers’ compensation premium is calculated. The three factors that determine the price of your premium are:

  • Payroll size
  • Job classification of employee
  • Company claims experience   

Regardless of the size of your business, in the State of Florida, if you have one or more employees, you are required to have workers’ compensation. Understanding how your policy is calculated can assist you with discovering ways to lower the cost of premiums.

No Accurate Payroll Estimate

It’s critical that the employer has an accurate estimation of their annual workforce payroll as overestimating or underestimating the price will directly impact the premium. When you overpay, you will eventually recoup those additional funds; however, there will be no return on investment as the insurance company holds your capital. If you underpay, this will increase the cost of your premium after you receive an audit. It’s critical that every employer do their due diligence at the beginning of a policy period and determine an accurate payroll evaluation for that policy period.     

Independent Contractors in the Workplace

Employers, especially contractors, should always ask themselves, “are all workers at the workplace covered?” For industries like construction, employers may rely on numerous subcontractors to perform much of the needed work of the business. To add to the confusion, many of these subcontractors will employ sub-subcontractors. As these “freelancers” are often coming and going, it can be easy to lose track of whether or not every worker is covered.

When an uncovered worker is injured, the burden of paying for their recovery may be the responsibility of the primary contractor. Moreover, without a record of a certificate of insurance, the contractor’s business could be impacted during an audit. Before a subcontractor should be allowed to begin work on a project, it’s critical that the contractor obtains proof of coverage from the subcontractor and their crew.

If you would like to speak with one of our Florida workers’ compensation attorneys, please contact us today.

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.

Well-written contracts are necessary to protect your legal rights as a contractor. Knowing what to look for when you review contracts can keep you from signing away the profits and success of your construction business. Part one of this article covered three tips for contract review. In this part, a Little Rock contractor attorney discusses four more tips for checking your contracts.

4. Check Liquidated Damage Provisions

With any liquidated damages provision, it’s important to check the terms. You could be on the hook for large damage payments due to shortages out of your control if the job isn’t completed on time. This portion of the contract should be fair to both parties and not hold you accountable for natural disasters, shortages of building resources, or energy.

5. Make Sure There Is a Lien Clause

Although Arkansas has no specific laws about waiving your lien rights, it is vital you protect your rights to file a lien by including a lien clause. Forgetting to review this section of the contract means you could be out the cost of work or supplies on the job.

6. Carefully Consider Change Orders

Most construction jobs include some changes, even if they’re minor. These additions to contracts can pile up and become overwhelming. Keep all change orders and other contract additions in chronological order somewhere they are easy to access. If they’re on a computer, make sure to backup the information.

7. Hire an Experienced Contractor Lawyer

The best way to review a contract is to have a knowledgeable Little Rock contractor lawyer look it over for you. They have in-depth insights into what can help you negotiate a better contract and make sure your rights are protected. They can also help you with other services like license defense, lien and bond law, and more.

If you would like to speak with a Little Rock contractor lawyer, please contact us today.

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.

As a contractor, you’re probably familiar with many types of construction contracts. Sometimes familiarity can lead to breezing through contracts which can come at a terrible cost. Even repeat clients can make mistakes on contracts that can have negative effects for one or both of you. In many cases, this can lead to ruined relationships and steep monetary penalties.

In part one of this article, a Little Rock construction attorney gives the first three tips to make sure your contract review keeps you safe.

1. Have a Written Contract

Sometimes business deals are done with a handshake, but details can fall through the cracks resulting in both parties being unprotected when it comes to legal matters. Verbal contracts are much harder to enforce or prove than paper or electronic contracts. Even if you’ve worked with this client before, it’s important to have a contract to protect both of you and keep your relationship positive.

2. Read the Entire Contract

Contracts are long and often have boilerplate provisions. However, a small mistake or typo could cause trouble later. For example, a key date could be wrong and leave you open to disagreements with your client. It’s best to read the whole contract through thoroughly to make sure it’s all as it should be.

3. Examine Legal Entity Names

Many sections make up a contract and ensure the contract is legally binding. A crucial part of a binding contract is the names of both parties. It’s also important to make sure the other party has the legal ability to sign the contract on behalf of that entity.

Read part two of this article to learn the other four tips.

If you would like to speak with a Little Rock construction lawyer, please contact us today.
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.