When the private sector does not address a major issue, the public sector will often step into the vacuum and do it. The construction industry has been slow to embrace the principles of social responsibility and sustainable value, focusing instead on whatever it takes to be lowest bidder. As a consequence of this, government is adopting policies that reshape the rules for the industry.

There is an Equal Employment Opportunity Commission (EEOC) court case moving through the legal system that potentially could have major impact on every building site, general contractor and subcontractor in the country.  It concerns the “Joint Employer” concept and Discrimination under Title VII.  It is a case that you should have your legal teams and insurers watch closely over the next few months until it is fully resolved.

The case has been filed, decided, reversed and appealed, so you know that it is definitely serious business – especially for the defendant, Skanska USA, and perhaps you as well.  The case, filed by the EEOC in September of 2010, pertains to the construction of a hospital that Skanska USA built for Methodist Le Bonheur Healthcare in Memphis.

In the original suit, the EEOC argued that the general contractor (Skanska USA) allowed the plaintiffs (workers supplied by a small subcontractor, C-1), to be subjected to racial slurs and discrimination on the jobsite and that when the workers complained, Skanska took no action to rectify the conditions other than to retaliate and fire them.   Read more » about EEOC v Skanska – “Joint Employer” Ruling a Game Changer

An unfortunate reality of the industry we cover is that there are many instances of worker abuse. We have documented much of this on Construction Citizen over the years.  Terrible working conditions, worker misclassification, lack of health insurance and workers’ compensation insurance, denial of overtime pay and other problems honestly keep me up at night.  But, I was only fairly recently alerted to just how prevalent human trafficking is in construction.

Houston is ground zero for human trafficking in the United States and for that reason, the American Jewish Committee (AJC) Bridging America Task Force will present its third immigration summit on March 18 at 8 am at Rice University.   Read more » about Immigration Summit in Houston to Focus on Human Trafficking

Editor’s note: The following was written by Texas House of Representatives member Armando Walle exclusively for Construction Citizen.

Texas House Speaker Joe Straus recently directed Texas House committees to study important issues in advance of the next legislative session in 2015.  I am particularly pleased that Speaker Straus gave the House Committee on Business and Industry the assignment of “[Studying] the voluntary nature of workers' compensation in Texas and how it meets the needs of employers and employees.”

Texas is currently the only state in the nation that does not require workers' compensation coverage for private employers, including construction companies.  In fact, since 1913, Texas employers have been allowed to opt out of workers’ compensation coverage.  Civil legal action is frequently the only path to redress for an injured employee against their potentially negligent non-subscribing employer.

Unfortunately, even when a civil lawsuit is litigated in favor of a plaintiff employee, the practical benefits of the favorable judgment can often be low compared to a similar claim going through the workers’ comp system.   Read more » about Studying Workers’ Compensation Subscription: An Opportunity to Respect Workers

When you think of OSHA (Occupational Safety and Health Administration), you probably think of technical workplace safety regulations.  However, don’t forget that OSHA is also responsible for enforcing the whistleblower provisions of twenty-two federal laws with anti-retaliation provisions.

OSHA maintains a separate website section for whistleblower issues at www.whistleblowers.gov.

OSHA received 2,787 whistleblower complaints during the last fiscal year.  More than half were complaints of retaliation for reporting workplace safety issues.  Complaints are expected to increase this year, because as of December 5, 2013, individuals may file a whistleblower complaint with OSHA using a simple online form.   Read more » about Beware of Whistleblower and Retaliation Claims

Now that the state is moving forward with a targeted crackdown on the practice of worker misclassification, which some in the construction industry have called “a cancer,” lawmakers are going to work through the summer to figure out what more they can do when they reconvene in a regular session in 2015.

As you may recall, the Texas Legislature in 2013 passed a bill to root out misclassification on public works projects.  While many see that as a step in the right direction, it doesn't go nearly far enough to address the problem.  As our readers well know, worker misclassification happens when a company pretends its employees are independent subcontractors when by law the workers qualify as employees and therefore should receive benefits and have their taxes deducted and matched.  While there are many legitimate uses for subcontractors, the abuse happens when a company does this with the intent of skirting the law and avoiding payroll taxes.

Texas House Speaker Joe Straus, R-San Antonio, has now instructed House members to “examine the issue of misclassifying employees as independent contractors [and the effect this practice has] on workers, employers, income tax withholding, and the unemployment insurance system.  Review current statutory deterrents, including those required by HB 2015 (83R), and make recommendations for changes if necessary.”   Read more » about Texas House to Study What More Should be Done on Worker Misclassification

In Texas political races all over the state, candidates are being grilled about what they think of sweeping education reforms passed by the legislature last year.  While there is pretty much universal agreement that the big reductions in standardized testing were a positive step, there is controversy about changes to graduation requirements that create multiple paths to a high school diploma.  The idea, essentially, is that not all kids will go to college so the state will now promote both college readiness as well as career readiness.

The business community is not monolithic, so there are some such as the Greater Austin Chamber of Commerce and the Texas Association of Business as well as some minority rights groups which want to roll back those reforms.   Read more » about Education Reforms Emerge As a Point of Contention in Texas Political Contests

This article by Professor Leonard T. Jernigan Jr. originally appeared in the North Carolina Workers’ Compensation Journal on January 9, 2014.  Reprinted with permission.

Employer Fraud Cases (9):$44,962,492.00 + Employee Fraud Cases (1): $1,500,000.00 = Total: $46,462,492.00

Every year we hear about fraud in Workers’ Compensation cases, and the public believes the fraud is employee driven.  However, in 2009 I began tracking the Top Ten Fraud Cases, and 100% of the Top Ten between 2009-2012 involved employers or shady characters posing as legitimate businesses.  The amount of employer fraud is staggering.  In 2013 one employee fraud case did crack the Top Ten, so the record is now 49-1 (employer fraud v. employee fraud) over the past five years.

  1. Florida: Owners of Diaz Supermarkets in Miami-Dade are Accused of $35 Million Fraud (4/16/13) - John Diaz and his wife Mercedes Avila-Diaz owned and operated four supermarkets in the Miami-Dade area.  They have been arrested and accused of workers’ compensation fraud and other fraudulent transactions totaling $35 million.  One business they operated had no coverage for employees for ten years.

  Read more » about $46 Million Stolen: 2013′s Top Ten Workers’ Compensation Fraud Cases

New regulations affecting federal contractors are scheduled to go into effect on March 24, 2014.  The regulations involve federal contractors’ affirmative action and recordkeeping obligations for veterans and disabled workers.

The agency issuing the regulations is the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP).  OFCCP regulates federal contractors.

Application to Construction Contractors

In general, contractors and subcontractors who hold a Federal or federally-assisted construction contract in excess of $10,000 are subject to regulatory requirements under one or more of the laws enforced by OFCCP.   Read more » about Federal Contractors Take Notice – New OFCCP Regulations