Tag Archives: contractors

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.

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

Vibration

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.