Tag Archives: construction

Construction Contractors Beware: Think Twice Before Paying Prevailing Wage Assessments!

Construction hat and gavel.

Contributed by Jeff Risch, April 2, 2021, www.illinoisprevailingwage.com

Big Labor continues to use local, state and federal prevailing wage laws to target contractors they have a “beef” with.  Since most prevailing wage audits are triggered by a complaint (including 3rd party complaints), trade unions and certain union-friendly organizations can easily turn in a contractor with the general assertion that the contractor is not complying with applicable prevailing wage law. While contractors and merit shop trade associations could do likewise, they typically don’t for obvious business reasons.  Having concentrated my practice on assisting contractors with prevailing wage disputes throughout the U.S., this trend not only continues but is ramping up in recent months.  While contractors who intentionally cheat the system and ignore their legal obligations should get what they rightly deserve, many contractors are facing audit assessments that are simply  off or incorrect.  Paying a disputed assessment in the hope of not upsetting the government agency or believing that cooperation will bring you favor is arguably one of the worst things a contractor can do these days; failing to properly document your disputes with any assessment that you believe has been issued in error could be the 2nd worst thing.

In short, I am now seeing more and more audit findings that are just flat out wrong, in whole or in relevant part.  Additionally, it is often the case that even if the ultimate assessment is correct, the discrepancy is based on a clerical mistake, an unintentional accounting or reporting error or a case of disputed worker classification.  However, many general contractors and public bodies, especially local units of government, are being told that they must reject the bid of a contractor who has any past or pending prevailing wage complaint against it, even when the contractor is the low bidder. By rejecting bids or terminating contracts with non-debarred contractors who are simply fighting the good fight with prevailing wage issues, these general contractors and public bodies are depriving contractors of fair due process, stifling competitive bidding and ignoring their obligations to the taxpayer.

In these times, contractors need to be extra cautious and careful in any and all communications with any government agency investigating prevailing wage compliance. To be clear, every complaint must be taken seriously by the contractor to ensure that the record ultimately reflects that the contractor is not only complying with its legal obligations, but also free to bid and perform public construction projects without interference. 

With the above in mind, there are 5 basic rules for anyone performing public construction work to follow with an eye on growing prevailing wage enforcement:

  1. Know your legal obligations under any and every local, state or federal prevailing wage ordinance/law that applies to your business (note: what’s permissible under Federal Davis-Bacon may be unlawful under local/state prevailing wage law);
  2. Ensure your business is complying with all applicable prevailing wage obligations for every worker, every day, every week, every job — not simply paying the correct rates but also keeping and maintaining detailed and accurate time and payroll records;
  3. Never allow a prevailing wage audit or investigation  to be closed or remain in limbo without some document that confirms your full compliance with your legal obligations (you will have to do this yourself);
  4. Never sign any settlement agreement concerning prevailing wage issues without first reviewing it with competent legal counsel to help ensure that no admission of liability or guilt is made and to expressly state that you are free and clear to bid and perform future public construction work; and
  5. Educate your local units of government on who you are and highlight your good name and business reputation — get to know the public officials, get involved and form relationships.

UPDATED 11/22/2017: Deadline to Electronically Submit OSHA Data

Contributed by Matthew Horn, November 21, 2017

BREAKING NEWS: In follow up to our blog from yesterday, OSHA issued a press release this morning extending the deadline to electronically report from 12/1 to 12/15. All other information in the blog remains unchanged.

On June 27, 2017, OSHA issued a press release announcing that it would be delaying the compliance date for its Rule requiring most employers to electronically submit their injury and illness data to OSHA. The press release pushed back the compliance date four months, from July 1, 2017 to December 1, 2017, so OSHA could review the Rule closely.

Dec1Just over two weeks later, OSHA issued another press release announcing that it would be launching its website allowing employers to submit their injury and illness data on August 1, 2017. On August 1, 2017, OSHA made good on that promise and launched its website, which is linked here. To date, despite OSHA’s promise to review the Rule closely, it has taken no action to roll back or delay the electronic reporting requirements, so the December 1st deadline remains.

Under the Rule, virtually all employers with twenty or more employees are required to submit their completed Form 300A for 2016 by December 1, 2017. In 2018, employers with twenty or more employees must submit their completed Form 300A for 2017 by July 1, 2018, and those employers with more than 250 employees must submit their Form 300 and 301s by that deadline, as well.

While we were hoping OSHA would roll back or delay the Rule, it appears that is not going to happen. Accordingly, all applicable employers would be well-served submitting their data online no later than December 1st.

Three Needless Deaths: Recognize Confined Space Dangers on Your Job Sites

Contributed by Patrick M. Sanders, July 24, 2017

Construction Site

Supervisor using walkie-talkie at construction site

On July 14, 2017, the U.S. Department of Labor’s Occupational Safety and Health Administration cited a contractor for 10 serious violations after the deaths of three workers who succumbed to toxic gases in a manhole on January 16, 2017.

Preventable safety failures led to the deaths of Elway Gray, a 34-year-old pipe layer, who entered the manhole – a confined space – and quickly became unresponsive; Louis O’Keefe, a 49-year-old laborer, who entered the hole in an attempt to rescue Gray; and Robert Wilson, a 24-year-old equipment operator, who followed to rescue his two fallen coworkers. Two other employees and a firefighter were also exposed to the toxic gases during rescue attempts but survived.

Post-incident atmospheric testing of the confined space revealed lethal levels of carbon monoxide and hydrogen sulfide. OSHA investigators issued Douglas N. Higgins, Inc. and its related contracting company, serious citations, totaling $119,507, in penalties.

The incident-related serious violations included failure to:

  • Purge or ventilate the confined space before entry;
  • Prevent workers from exposure to an asphyxiation hazard;
  • Provide necessary rescue and emergency equipment for employees that were overcome inside a permit-required confined space;
  • Develop and implement a written hazard communication program for a worksite on which employees were exposed to dangerous chemicals and gases;
  • Use a calibrated direct-reading device to test for toxic gases, creating an asphyxiation hazard;
  • Create and document the confined space entry permit;
  • Provide training to employees in the safe performance of their assigned duties in permit-required confined spaces; and
  • Provide a guardra­­­il around the manhole opening, exposing employees to a fall hazard.

Full citations may be found here.

OSHA Area Director Condell Eastmond’s comments were all too familiar: “Three employees needlessly lost their lives and others were injured due to their employer’s failure to follow safe work practices.”

This case should remind all employers that confined spaces within the workplace often present difficult and involved identification, training, written program management and compliance documentation retention issues.

What responsibility do companies have to ensure that their contractors protect their workers?

Those organizations that have a record of previous “serious” violations must be aware OSHA will rigorously enforce employee training, workplace safety information requirements, toxic workplace condition testing and all related rescue and emergency safety equipment regulations and will issue repeat, willful and, in extreme cases, criminal violations, should subsequent violations be documented by OSHA.

OSHA – Now Doing Editorials​

Contributed by Matthew Horn

On July 22, 2015, OSHA issued an underground construction company in Texas six willful and nine serious citations with fines totaling $423,900, stemming from a trench collapse in February of 2015. While the citations and fine amount are not unusual under the new regime, the press release issued by OSHA following the issuance of the citations goes to great lengths to embarrass and harass the company, even identifying the company’s workers compensation insurer by name—presumably, in an atteyellow construction hatmpt to try and prevent the company from obtaining insurance in the future. See the press release here.

Going forward, employers should know that in addition to citations and fines, OSHA intends to add malicious press releases and editorials to its arsenal. Now more than ever, employers should take steps to ensure that they are prepared for when OSHA arrives at their facility or site in an effort to avoid being the subject of a similar press release.

Contractors Beware: Strict Amendments to the Illinois Employee Classification Act

Contributed by Jonathon Hoag

House Bills 923 and 2649 were signed into law amending the Illinois Employee Classification Act (IECA), effective January 1, 2014.  The IECA sets forth strict requirements in order to lawfully classify individuals as independent contractors within the construction industry (defined very broadly by the act).  The IECA has been amended to give the Illinois Department of Labor more oversight and authority to enforce this act.  The recent amendments mandate that (1) contractors follow annual reporting requirements when contracting with an individual, sole proprietor, or partnership to perform construction services; (2) add individual liability; and (3) change the department’s method for enforcing the act (i.e. easing enforcement).

Beginning January 1, 2014, contractors that make payments to an individual, sole proprietor, or partnership for construction services must report contact and payment information to the Illinois Department of Labor by January 31 following the taxable year in which payment was made.  The department intends to closely monitor the use of (non-employee) sole proprietors and partnerships in the construction industry.  Contractors that fail to submit required reports are subject to penalties and debarment.

In addition, officers and agents of contractors who knowingly permit the contractor to violate the IECA, or are otherwise considered an employer under the act, are subject to individual liability.  This provision does not apply to contractors primarily engaged in the sale of tangible personal property or doing work for a business primarily engaged in the sale of tangible personal property.

Lastly, the enforcement procedure was drastically amended so that now alleged violations will be prosecuted by the Illinois Department of Labor through an administrative hearing, subject to administrative review in the courts.  Currently, the Illinois Department of Labor’s administrative findings have no significant weight and violations must be proved by the Attorney General in the circuit court.  This change to the enforcement procedure will give the Illinois Department of Labor substantial control and power in how this act is enforced. 

Interestingly, contractors in compliance with the responsible bidder requirements set forth in the Illinois Procurement Code are exempt from these statutory amendments.  There are a number of requirements under the responsible bidder provision of the Illinois Procurement Code, but the one of most significance is the requirement that contractors have an apprenticeship program approved by the U.S. Department of Labor to cover each craft of work performed on the job.  There has been a concerted effort to broaden the application of the responsible bidder requirements to contractors throughout Illinois, and it appears the strategy will be to give contractors who satisfy the responsible bidder requirements special treatment under other Illinois laws.

7th Circuit OSHA Case on Soil Types

Contributed by Guest Blogger Matthew Horn

A recent decision issued by the United States Court of Appeals for the Seventh Circuit, KS Energy Services, LLC v. Solis, Case No. 11-2427, greatly impacts how OSHA will determine soil types and enforce trench sloping and benching regulations.  All contractors performing work in trenches should be aware of this decision and its practical implications. 

Under the Court’s ruling in Solis, in order to prevent the possibility of being issued a citation for improper trench protection, a contractor should always downgrade “Type A” soil to “Type B” soil in determining slope when: 1) it is using heavy machinery near the trench; 2) the trench is near a road; or 3) there are existing utilities running through the trench at any point and/or are located within at least ten feet of the trench. 

The Violation

In the case, KS Energy, an underground contractor out of New Berlin, Wisconsin, was installing a natural gas pipeline underground in downtown Madison, Wisconsin.  An OSHA Compliance Officer arrived on site and took several measurements of KS Energy’s trench using a trench pole.  The slope of the trench was measured at 46 degrees in two locations and 50 degrees in one location.  The Compliance Officer also noted that there was water in several footprints near the trench; that there were underground utility lines eight to ten feet from the trench; and that a street was located twelve feet from the trench. 

The soil samples taken by OSHA indicated that the soil was “Type B” at the top and middle of the trench, but the soil sample taken by KS Energy’s expert from the bottom of the trench indicated that the soil was “Type A.” 

KS Energy was issued a repeat citation for failing to provide an adequate trench protection system in “Type B” soil conditions. 

7th Circuit Ruling


The Court found that while there was evidence that the trench consisted, at least partially, of Type A soil, the soil needed to be downgraded to Type B because it was subject to vibration.  There was no evidence provided indicating that the soil actually vibrated, but the Court found there was sufficient evidence to find that the soil was “subject to” vibration, which is all that is required.  Specifically, the Court found that the soil was “subject to vibration” because the trench was twelve feet from a lane of heavy traffic and because KS Energy was using a “large, tracked backhoe” to perform its work near the trench.  The Court specifically noted that it made no determination as to whether use of heavy equipment near the trench was sufficient in and of itself to support a finding that soil was “subject to vibration.” 

Disturbed Soils

The Court also found that the soil near the trench needed to be downgraded because it had been disturbed due to the installation of pre-existing underground utilities in the area of the trench.  While OSHA presented no evidence as to the extent the soil around the trench had been disturbed to install the utilities, the Court found that the fact that there were utilities in the area of the trench—some passing through the trench and some located approximately eight to ten feet away—supported the finding that the soil near the trench had been disturbed at one point in time and had to be downgraded.

What Does this Decision Mean?

While the Court specifically noted that it made no finding as to whether use of heavy equipment near the trench was sufficient in and of itself to support a finding that the soil was “subject to vibration,” the Court also did not find that the use of heavy equipment near the trench was not sufficient in and of itself to support a finding that the soil was “subject to vibration.”  This means that, in the future, OSHA can and, likely will, argue that use of heavy equipment near a trench is sufficient in and of itself to support a finding that “Type A” soil is “subject to vibration,” and must be downgraded. 

With regard to disturbed soils, the Court found that pre-existing utilities running through the trench at various locations and running approximately eight to ten feet from the trench supported a finding that soil had been disturbed, and that the soil needed to be downgraded in order to determine proper slope.  In the future, OSHA can argue that a trench with any existing utilities running through the trench or within eight to ten feet of the trench is sufficient to support a finding that “Type A” soil has been disturbed, and must be downgraded.