By: Jonathan Landesman
In any given year, my firm represents nearly 1,000 contractors. I’m on the phone with contractors talking about employee and union issues all day every day. I’m not complaining, I get to hear some pretty interesting stories about how employees find new and creative ways to get themselves into trouble and create difficult, and oftentimes, expensive problems for my clients. Most of what I do is reactive. I usually wind up giving advice on implementing damage control measures after the fact. But every now and then, I’ll have an especially business savvy contractor call me when things are relatively quiet and ask me what his company should be doing proactively to better manage exposure to potential human resources liability issues. When answering that question, here are a few items that are almost always at the top of my list:
Conduct a self-audit for wage and hour compliance. There are more overtime compensation lawsuits filed in federal court than any other type of employment claim. Bottom-feeding plaintiff’s lawyers love bringing claims for overtime under federal and state law, especially class actions. This is because even if they recover only a few hundred bucks for each employee, they are still permitted to file bloated petitions for hundreds of thousands of dollars of attorneys’ fees. And even though these lawsuits are so common, many contractors continue to expose themselves by misclassifying employees as salaried-exempt. Do you have an assistant estimator, purchasing agent, or junior estimator who receives a fixed weekly salary without receiving overtime compensation when working more than 40 hours per week? If the answer is “yes”, then you are not alone. You are standing alongside scores of other contractors who will fall prey to a predatory wage and hour claim. What should you do to avoid this grim fate? Consult with a lawyer who really understands wage and hour law to ensure that your entire workforce is properly classified.
Watch your subcontractors’ payroll like a hawk on rated jobs. If your company performs public works projects, you know all about prevailing wage compliance, including paying the correct rate and benefits package and completing weekly certified payroll records. But did you know that your company can be held responsible for a subcontractor’s prevailing wage violations? But surely a general contractor cannot be held secondarily liable for a subcontractor’s prevailing wage violations if the general contractor reviews the subcontractor’s certified payroll records every week and those records show that the employees have been paid correctly, right? Wrong! The Department of Labor in New Jersey will not accept any excuses. The only way to effectively avoid secondary liability for a subcontractor’s payroll violations on a public works job is to review the subcontractor’s actual payroll account and see that all of the required money has actually been remitted.
Understand that not all of your most trusted employees will be loyal forever. Some contractors assume that once an employee has been employed at the same place for 10 or 20 years they are a permanent fixture. That’s just not true. Even long-term employees fall out of love with their employers and/or can be lured away by promises of vast riches. If you have one or more employees who could take a substantial amount of business to a competitor or otherwise cause substantial harm to your company, you need to tie up that employee with a non-compete agreement. I hear contractors talking about non-compete agreements a lot, and the misconceptions abound. The truth of the matter is that while they are not 100% bullet proof in all situations, they are enforceable as a general principle. I know, I’ve personally litigated dozens of cases to enforce non-compete agreements. Learn from the mistakes of my other clients and don’t wait until after you lose your most valuable employee to implement non-compete agreements for everyone else.
#MeToo isn’t just a Hollywood thing. We’ve all heard about the #MeToo movement taking down powerful celebrities like Matt Lauer and Harvey Weinstein. But the movement has effected the workplace in all industries, even male dominated industries like construction. And it’s not just the stereotypical claim of women working in an office reporting harassment by their male co-workers. Indeed, I have seen an explosion of cases involving same-sex (male on male and female on female) hostile work environment claims, as well as claims involving harassment allegations because of age and race. What can you do about this national phenomenon and to ensure a safe and inclusive environment for your employees? For starters, you should dust off your employee handbook and make sure that you have a comprehensive harassment policy that prohibits all types of discrimination and harassment, and includes a multi-channel complaint procedure. And you should invest in live, in-person harassment training for all of your employees. In fact, harassment training is now required for employers in many jurisdictions.
Embrace a true Open Door Policy. Whether you operate a union or open shop, you need to continually exercise vigilance to make sure that your employees are being treated fairly. If you have a bully on a particular crew or in a particular department, your employees need to be able to come to you and talk about it. In an open shop, allowing a rogue supervisor to run roughshod over the employees he or she supervising is a recipe for a union organizing campaign. And in a shop that is already organizing, allowing a supervisor to behave too aggressively often costs the employer both in terms of lower morale and lost productivity as well as an increased number of union grievances. Employees should have an outlet – typically a human resources professional – to voice issues of perceived unfairness. Again, letting things fester and remedying this type of situation after the fact is often a very costly mistake.
About the Author. . . Jonathan Landesman is Co-Chair of the Labor & Employment Group at Cohen Seglias Pallas Greenhall & Furman PC. He is an aggressive trial lawyer and has successfully represented UTCA members and other contractors in all aspects of labor and employment law. Jon can be reached at email@example.com or 267.238.4726.