Contractors Should Be Aware of Regulations Before Using Drones on Construction Sites

This article is intended for educational purposes only and should not be construed as legal advice. For legal advice about the use of drones, contact an attorney.

The 21st century has brought with it explosive growth in technology that is changing the world we live in on a daily basis. New innovations are allowing for more efficient ways to do business in various industries; the construction industry is no exception.

Among the more controversial innovations with vast potential to revolutionize construction work is the Unmanned Aircraft System, or UAS, which is more commonly known as a drone. These remote-controlled flying robots have already found their way onto construction sites around the country, and use is proliferating as entrepreneurs discover more ways to apply drones to commercial uses. Although drones may yield numerous benefits to contractors, they have also created a need for new regulations to allow them to fit into the national legal landscape. As a result, contractors wishing to employ drones on their construction sites must be aware of such regulations.

BENEFITS OF DRONES

The application of drones to construction work has begun to yield advantages in several areas, including marketing, inspections and surveys.

Traditionally contractors have presented their ideas and progress to their customers through a combination of diagrams and photographs of the site. Drones allow contractors to show off their work in a new way. By attaching a video camera to a drone and sending it through and around a construction site, contractors can provide customers a fully immersive virtual tour of the site, including aerial views and observations of areas that otherwise would be difficult to reach. This new marketing tool will surely be a boon by visually enhancing the viewer’s experience.

Drones also have the potential to more efficiently monitor the activities of workers on a job site for progress and ensure all workplace policies are being followed. Because construction sites involve the work of many people, usually in different areas that can be difficult to reach, a small flying camera can quickly and efficiently aid site superintendents in monitoring projects.

Another area in which drones have begun to make an impact is surveys. In the past, surveyors have completed their work by carefully drawing lines and manually measuring distances. Today, drone technology allows for much larger areas to be covered in much less time. A drone can be synced with GPS technology to create a quick, reliable, mobile mapping system or with thermal imaging systems for thermodiagnostics, assessment of damage and estimating of projects.

LEGAL CONCERNS FOR CONTRACTORS

Before applying drones to a worksite, however, construction professionals must be aware of several laws that will affect their use. Many laws that have been considered common practice with regard to drone use thus far have recently been nullified by a comprehensive new set of rules finalized by the Washington, D.C.-based Federal Aviation Administration on June 21. These new rules follow:

HIRE A CERTIFIED PILOT IN ADVANCE
Not just anyone can operate a drone commercially; a pilot must be certi- fied in advance. The new rules issued by the FAA include a new system for certifying drone pilots. The new system creates a certified position, “Remote Pilot in Command”, a title which can only be obtained via receiving a remote pilot certificate. Any person operating a drone must possess this certification or be under the direct supervision of someone who is certified. To qualify for the remote pilot certificate, a person must meet the following requirements:

  • Demonstrate aeronautical knowledge by either:
  • — Passing an initial aeronautical knowledge test at an FAA-approved knowledge testing center.
    — Holding a Part 61 pilot certificate other than student pilot, completing a flight review within the previous 24 months and completing a small UAS online training course provided by the FAA.

  • Be vetted by the Transportation Security Administration, Washington.
  • Be at least 16-years old.

This certification system also allows for temporary early access in certain circumstances. For example, any person certified as a Part 61 pilot will, upon submission of an application for a permanent certificate, immediately receive a temporary remote pilot certificate so he or she does not have to wait before continuing drone work. All applicants not certified under Part 61 can still receive temporary early permission; they will receive a temporary certificate after being satisfactorily vetted by the TSA. In addition, foreign pilots must meet these requirements at least until international standards are developed.

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NRCA Roofing Contractor Members Receive Free Consulting Services

The National Roofing Contractors Association (NRCA) announces it is now providing consulting services at no charge to its roofing contractor members.

NRCA’s Consulting Services is a benefit of membership that enables contractors to get tips and advice on current business issues, discuss business strategies or issues with consultants in the following areas.

•Legal— Roofing contractor members can obtain information about general legal issues encountered in daily business.

•Marketing— Assistance with current marketing plans is provided, as well as strategies for increasing homeowner and business owner sales and profitability.

•Information Technology— IT strategies for improving and streamlining operations for maximum business performance.

•Human Resources— Solutions to human resources related issues including federal or state employment law, employee relations and human resource management.

•Enterprise Risk Management— Advice about health, safety, insurance, legislative and regulatory issues, or learn more about loss control and regulatory compliance responsibilities.

•Technical— Solutions to technical questions including proper installation, maintenance or repair of various roof systems, or advice on a specific project.

What Contractors Need to Know About E-Verify and IRCA

Because proper compliance with immigration law is complex, this article should not be construed as legal advice. Those seeking counsel about proper compliance with IRCA, E-Verify requirements, the Fair Labor Standards Act, or wage and hour laws should contact an employment attorney practicing in their state. For general questions, feel free to contact the author at ctrautman@andersonandjones.com.

Mention the word “immigration” in today’s political climate and be prepared for the conversation to take any number of turns. What starts as a friendly conversation could segue into a political debate about President Obama or Donald Trump, livening up or ruining a perfectly good Easter dinner.

But regardless of opinion or political identity, immigration law—and compliance therewith—is something about which most construction professionals should be talking. It is a necessary component of any employer’s operations and it is of particular concern to construction business owners. “Am I supposed to be E-Verifying my employees now?” and “How long do I have to store I-9 Forms?” are crucial questions for contractors.

At a minimum, it is essential for construction professionals to understand the basics of the Immigration Reform and Control Act (IRCA) of 1986 and E-Verify. By now, most business owners in the construction industry are familiar with E-Verify, as well as federal I-9 forms, which must be completed pursuant to IRCA. But with immigration reform becoming a hotly debated issue in the U.S., contractors should not only be prepared to comply with existing laws, they should also pay attention to what changes the future could hold.

IRCA

IRCA, a federal statute, makes it unlawful to hire “unauthorized aliens”, which the law defines as individuals who are not “lawfully admitted for permanent residence” or not otherwise authorized by the attorney general to be employed in the U.S. [8 U.S.C § 1324a(h) (2012)]. IRCA is the statute that requires all employees and employers to complete I-9 Forms; the employer must then retain the original forms during the employment of each active employee (and for three years after employees become inactive or are terminated). The statute’s intention is to require every employer, regardless of the number of individuals it employs, to verify all employees hired after Nov. 6, 1986, are authorized to work in the U.S.

As a practical matter, compliance with IRCA likely won’t ensure all employees are authorized to work in the U.S. However, correctly filling out the I-9 Form is crucial to avoid fines and other penalties from Immigration and Customs Enforcement (ICE), Washington, D.C. Employees and employers have obligations regarding the I-9 Form, so cooperation between both sides of an employment trans- action is key. Under IRCA, ICE has the authority to inspect I-9 Forms and conduct audits to ensure employers are complying.

Common, but often innocent, mistakes are made. For example, employers often fail to check the “status” box on the I-9 form or fail to have the employee sign the form. Also, inaccurate classification of employees as “active” or “inactive” can lead to trouble for employers who have stopped maintaining I-9 forms for employees who no longer work for the employer but who are still classified as “active”. Instituting company policies on what constitutes an “active” and “inactive” employee, as well as ensuring proper completion of I-9 forms, can help prevent ICE audits and the fines that could result.

E-VERIFY

Unlike IRCA, E-Verify is not a statute but an Internet-based system that allows businesses to determine the eligibility of their employees to work in the U.S. In many cases, E-Verify will more accurately determine an employee’s eligibility to work than the I-9 Form system under IRCA. E-Verify is available to all U.S. employers free of charge by the Washington-based U.S. Department of Homeland Security (DHS) but it gene- rally is not mandatory for employers.

Although E-Verify is technically voluntary, numerous states have enacted provisions requiring most employers to use E-Verify. These states include Alabama, Arizona, Colorado, Georgia, Idaho, Indiana, Florida, Louisiana, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Utah and Virginia. Additionally, pursuant to a presidential Executive Order and a subsequent Federal Acquisition Regulation rule, federal contractors—or those contractors doing business with the federal government—must use E-Verify.

Again, except in certain circumstances, enrollment in E-Verify is voluntary. Once enrolled, however, employers are required to post English and Spanish notices indicating the company’s participation in the program, as well as the Right to Work issued by the Office of Special Counsel for Immigration- Related Unfair Employment Practices, a division of the U.S. Department of Justice, Washington. These posters must be visible to prospective employees. To enroll, an employer simply needs to visit the E-Verify website and begin the process. Next, the employer enters into a written Memorandum of Understanding (MOU) with DHS and the U.S. Social Security Administration (SSA), Washington. This MOU provides the responsibilities of each party— employer/federal contractor, SSA and DHS.

BROADER ACTIONS

In recent years, President Obama and state governments have implemented changes to immigration law and policy that are impacting the construction industry. President Obama, in response to Congress not passing an immigration reform bill, announced a number of executive actions in November 2014. One such measure would allow certain undocumented immigrants to temporarily remain and work in the U.S. without fear of deportation. Because of pending litigation, this measure has not yet taken effect.

Although President Obama has attempted to prolong some immigrants’ ability to legally work in the U.S., several states have enacted legislation that could do the opposite. While the 19 states previously listed had made E-Verify mandatory for certain employers, some states have broadened the scope of situations requiring employers to use it. North Carolina, for example, had required all employers with 25 or more employees to use E-Verify as of 2013. But in October 2015, Gov. Pat McCrory signed into law a bill that requires all contractors and subcontractors on state construction projects to use E-Verify (N.C.G.S. § 143-133.3). The statute appears to require this without regard to a contractor’s number of employees, bringing North Carolina a step closer to South Carolina’s zero-tolerance policy for employment of undocumented immigrants.

In South Carolina, private employers who fail to E-Verify new hires could lose their licenses to do business in that state [S.C. Code Ann. § 41-8-10, et seq. (2012)]. The South Carolina law, and similar laws, easily could affect contractors from other states with more lenient policies; however, the South Carolina statute defines “private employer” to include any company transacting business in South Carolina, required to have a license issued by any state agency (including a business or construction license) and employing at least one person in South Carolina. Therefore, companies outside South Carolina that have a South Carolina office—or just one employee in South Carolina—likely will have to use E-Verify, which is becoming required in an increasing number of locations.

EMPLOYEE MISCLASSIFICATION

Importantly, E-Verify does not apply to independent contractors; companies that are required to use E-Verify need only verify the status of employees, not of independent contractors that contract with the company for work. This is noteworthy in light of another trending issue in the construction industry: employee misclassification. Employee misclassification occurs when a business wrongly classifies an employee as an independent contractor or vice versa. This is a violation of the federal Fair Labor Standards Act.

According to the U.S. Department of Labor’s (DOL’s) website, the DOL’s Wage and Hour Division is engaging in “strategic enforcement” to identify instances where companies are identifying workers as independent contractors even though they function like employees. Whether companies could be penalized for failing to E-Verify independent contractors who should have been classified as employees is unclear. However, it appears that eventually many employers will have to reclassify workers who are currently classified as “independent contractors” to “employees” to comply with federal contracts, state contracts or state laws that require use of E-Verify. It appears that this will inevitably result in employers being required to use E-Verify on an increasing number of workers.

Fewer Contracts and More Coordination Point to Design-Build Becoming Even More Popular

When contractors and owners elect a certain project delivery method for their project, it can affect all aspects of the construction, including costs, time to complete the project and amount of exposure to liabilities for each involved party. Owners and designers have long viewed the “Project Delivery Method” as the comprehensive process including planning, design and construction required to execute and complete a building facility or other type of project. Choosing the right project delivery method is integral to a successful project. Currently, there are at least four types of common project delivery methods: construction management at risk (CMR), design-bid-build (DBB), design-build and multi-prime (MP). There is a growing trend showing the more traditional design-bid-build product delivery method is losing its appeal and other options, like the design-build delivery method, are taking its place.

To understand why the design-build process is growing in popularity, it is helpful to discuss three areas where the four processes are different: number of phases and essential parties, number of essential contracts and the liability exposure under the contracts within each method.

NUMBER OF PHASES AND ESSENTIAL ‘PRIME’ PARTIES

Traditional design-bid-build is the familiar, drawn-out process where the owner of the property contacts a designer to create plans and specifications. Once complete, the owner takes the plans and specifications and begins the bidding process. After a bid is accepted, only then can construction begin. The CMR and MP methods use similar processes, though the owners may contract to different parties instead of contracting with the general contractor (we’ll discuss this more later). Under design-bid-build, CMR and MP methods, a minimum of three players is necessary in every project: the owner, designer and the contractors in their various forms.

The design-build method uses an “integrated” process, whereby the designers and contractors are one-and-the-same entity. The process of designing and constructing occurs simultaneously and thus eliminates the lag time between an owner’s receipt of a design and the acceptance of a bid. Also, because there is only one entity performing the design and construction, the only two necessary “prime” parties are the owner of the project and the design-build entity.

NUMBER OF ESSENTIAL CONTRACTS

Another closely related factor to the number of phases and essential parties is the number of contracts created during the project. The traditional design-bid-build project first requires the owner to form a contract with a designer that will design the building or project in isolation and without any input from the construction team. CMR operates similarly again; however, it allows for input from the construction team as to what materials would be the most cost-effective and merchantable for the desired purpose. In these two processes, two contracts exist: one between the owner and designer and one between the owner and construction-management constructor.

MP requires the owner to contract directly with each contractor and subcontractor instead of with one general contractor. Under this process, a minimum of two contracts exists between the owner and the designers and contractors, likely increasing as the size of the project increases.

Conversely, the design-build process merges the designer and builder into one entity. Because the one entity handles both jobs, the contracting process is streamlined and results in only one contract between the owner and design-build entity.

LIABILITY EXPOSURE UNDER THE CONTRACTS

As the volume of contracts involved in the project increases, the more fragmented the liability exposure becomes. In the design bid-build, MP and CMR methods, the owner first secures the designs from the designing entity. When the owner hires the constructing entity, he or she warrants to the constructing entity that the designs and specifications are sufficient for its hired purpose. The designer and the contractors are independently responsible for their work product, but the owner is still held responsible for any representations made to either entity. Although the CMR method attempts to foster the communication between the designer and contractors, no contract exists between the two and, therefore, liability remains on the owner for all
representations made. Further, any change orders, which frequently arise, and any other “gaps” are solely the responsibility of the owner.

Design-build removes the wall that is frequently erected when construction projects go wrong. Frequently during litigation involving the design-bid-build process, designers will attempt to avoid liability by pointing the finger at the contractors and vice-versa. Design-build, by creating a merged entity including the designer and the contractor, places the responsibility of designing and constructing with that one entity, which facilitates problem resolution instead of gearing up for an adversarial proceeding. Therefore, the design-builder is responsible not only for designing the project so that it will satisfy the desired standards, but it must also complete the project required by the owner in the contract.

As for “gaps” with the design-build process, they are essentially eliminated. The entity is performing both roles. Should the owner provide the design-builder with prescriptive designs and specifications, however, the design-build contractor is the party
responsible for discovering any inconsistencies with the performance standards by which they are bound. Any consistencies found will be the financial responsibility of the owner.

FEWER BUMPS

It is easy to see why the design-build process is growing in popularity. Costs are decreased by streamlining the process in many ways: an overlapping process of concurrent designing and constructing, fewer required contracts, and the ability of the contracting entity to adapt to the changes in design and construction. Although liability exposure is more concentrated in the design-build entity than in the other methods, the benefits of coordination between the designer and contractor will surely outweigh its detriments.

In addition to making the project delivery process easier, fewer bumps along the way will surely decrease the time and costs associated with the completion of a project. As we follow the trend toward a more design-build-focused construction industry, we will likely experience a positive effect on the litigation process, where claims will arise only between two parties as opposed to the requisite three parties in a traditional design-bid-build-based action.

KISS: Keep It Simple, Silly

Editor Christina Koch married Bart Thoreson on Aug. 29 along the lake behind their Iowa home.

Editor Christina Koch married Bart Thoreson on Aug. 29 along the lake behind their Iowa home.

My new husband Bart is the one who shared the “work smart, not hard” mantra I related in my November/December 2014 “Raise the Roof” column, page 8. He’s constantly recommending ways to complete tasks that I have to admit are simpler than my own attempts. It’s not always easy for me to accept his suggestions because I’ve being doing things just fine on my own for a long time.

I can’t help but see the parallels to the construction industry—an industry that many say is slow to change. However, I think we can all agree that if a new way of doing things helps us work smarter, it’s worth a try. In “Business Sense”, Todd A. Jones and Katie Dunn discuss project delivery methods. Jones, an attorney with experience in construction law and litigation, points out that fewer contracts and more coordination with design-build lead to more efficient projects. Jones also thinks that as the construction industry continues to embrace design-build,we’ll see less litigation—a win-win for everyone.

Surely, as you’ve become more experienced in your position, you’ve developed “tricks of the trade” that help you complete tasks more efficiently. In “Tech Point”, John Jensen, president of Jensen Roofing Inc., Newcastle, Wash., and the training program manager for the Edmonds, Wash.-based Tile Roofing Institute, shares a couple “tricks” that will ease tile roofing layout. What are your “tricks of the trade”? Please share them with me!

Her Roofing family was in attendance (shown here at the rehearsal dinner). From left to right: John Riester, vice president of business development; Barrett Hahn, publisher, who served as the wedding photographer; and Becky Riester, who was a bridesmaid.

Koch’s Roofing family was in attendance (shown here at the rehearsal dinner). From left to right: John Riester, vice president of business development; Barrett Hahn, publisher, who served as the wedding photographer; and Becky Riester, who was a bridesmaid.

As winter approaches, it’s a good time to remind your customers how they can avoid emergency calls to your roofing company. In “On My Mind”, Connie Menard with Greenawalt Roofing Co., Landisville, Pa., shares seven tips your customers can complete to ensure their buildings are well protected this winter. Step No. 6 is “Clean your gutters”, something my husband does for our home and that of our elderly neighbor on a regular basis. Our neighbor says I’m lucky to have such a considerate husband. Bart says he’s just trying to avoid potential problems from arising. I’m pretty sure they’re both right.

Expertly Negotiate Contracts

The National Roofing Legal Resource Center (NRLRC) has released its Roofing Contractors Introductory Guide to Reviewing Construction Contracts

The National Roofing Legal Resource Center has released its Roofing Contractors Introductory Guide to Reviewing Construction Contracts.

The National Roofing Legal Resource Center (NRLRC) has released its Roofing Contractors Introductory Guide to Reviewing Construction Contracts, which is designed to educate and assist roofing professionals in negotiating contracts. The rights and obligations of roofing contractors are governed by the terms of the contracts they sign. The guide discusses terms that frequently appear in contracts they are asked to sign and offers suggestions about how to revise provisions that may be disadvantageous if a problem were to develop. It is available electronically on NRLRC’s website.

A Case Involving Uber Has States Revisiting Employee versus Independent Contractor Status

When it comes to employment misclassification, no industry is safe. Employee misclassification occurs when an employer improperly classifies a worker as an independent contractor rather than as an employee. Misclassification can be intentional and unintentional and it generally results in avoidance of employment taxes and other potential liabilities.

While misclassification is prevalent in the construction industry, the issue recently resurfaced in a case involving San Francisco-based Uber Technologies Inc., the increasingly popular transportation network company wherein drivers use their own personal vehicles to transport customers to and from their destinations. Uber drivers and customers use a mobile-phone application that allows drivers to indicate whether they are accepting rides and allows customers to locate drivers and pay their respective fares. Uber has always classified its drivers as independent contractors.

In a recent hearing, the California Labor Commission challenged Uber’s classification of its drivers and reviewed whether Uber drivers were actually employees. Uber looked to the drivers’ exclusive control over their schedules and which ride requests to accept to support their contention the drivers were independent contractors. To Uber’s dismay, the commission ruled Uber drivers were, in fact, employees, entitling them to various benefits, including health insurance, unemployment benefits and workers’ compensation. As a result, Uber also was forced to cover certain business expenses, including toll reimbursements and mileage. Of the labor commissions addressing the Uber issue, the California Labor Commission’s decision directly conflicts with rulings in five other states: Colorado, Georgia, Illinois, Pennsylvania and Texas. All of these states’ commissions held that Uber drivers were independent contractors.

As employee misclassification gains more visibility, more states are reevaluating how to properly classify workers. The North Carolina General Assembly, for example, is attempting to pass a law that would expressly define the factors that would determine whether a worker is an employee or independent contractor. A few of the factors being considered by the North Carolina Legislature in House Bill 482 include:

  • Whether the individual is engaged in an independent business, calling or occupation.
  • Whether the individual is paid a fixed price, a lump sum or upon a quantitative basis for the work performed.
  • Whether the individual is not subject to discharge because he or she adopts one method of doing the work rather than another.
  • Whether the individual is free to hire assistants as he or she may think necessary and whether the individual has full control over such assistants.
  • Whether the individual selects his or her own time.

In addition to the much-needed clarification, the bill also proposes a penalty provision, where repeated intentional misclassifications by employers of their employees as independent contractors will trigger a $1,000 per employee liability. The bill would also create a five-member investigatory team and an amnesty period that would provide an opportunity for employers to self-report their current misclassifications. The “temporary amnesty program” will provide misclassifying employers with
immunity from civil penalty and enable to re-classify their workers to their correct designation.

Other states, like Texas, who have already enacted a similar law, are successfully discovering and reclassifying misclassified employees. In 2013, the Texas Labor Commission conducted 6,158 audits—752 of which were in the construction industry. Of the 752 businesses, 37.6 percent were found to have at least one misclassified employee. A total of 3,638 employees—an average of about 16 per business—were misclassified as independent contractors. The construction industry had one of the highest percentages of misclassified employees among all industries.

An investigative series, “Contract to Cheat”, published in a number of Sacramento, Calif.-based The McClatchy Co.’s newspapers in 2014, revealed just how prevalent the misclassification issue is in the construction industry in high-development areas, such as North Carolina and Texas. The series resulted from a year-long investigation into U.S. Housing and Urban Development, Washington, D.C., and other government projects that were completed during the government stimulus era of 2009-13. Payroll records of 64 HUD projects with budgets of more than $1 million were released to the McClatchy investigators and revealed employee misclassification was rampant throughout the construction industry.

The series revealed, among other findings, that employers in North Carolina and Texas with government contracts, which general contractors accepted on the condition they would adhere to all government laws and ensure all their subcontractors would do the same, were misclassifying employees 35.2 and 37.7 percent of the time, respectively. Additionally, Florida, where, like North Carolina and Texas, the construction workforce includes a higher-than-average concentration of immigrant workers, also experienced misclassification of 15.5 percent of workers.

The McClatchy investigation estimated misclassification resulted in $467 million per year to North Carolina and $1.2 billion per year in Texas of lost tax revenue from employers and workers failing to pay employment-related taxes. Not only did employers fail to withhold mandated taxes, such as social security and unemployment taxes, but North Carolina independent contractors who attempted to comply with tax law underreported their income by 56 percent to the state and federal governments. In addition to abusing the tax system, the practice has made it more difficult for smaller, law-abiding employers to compete with employers who are strategically undercutting the competition, placing lower bids made possible by the illegal tax benefit of misclassifying employees.

Though not currently being considered by state legislatures, the opportunity to create a third classification may present itself in the future. Canada has employed the use of a third, intermediate category: the dependent contractor, which is technically a subset of the independent contractor classification. The dependent contractor is a hybrid classification that includes benefits of the independent contractor and employee classifications. Dependent contractors enjoy some of the protections provided to an employee, such as health insurance, severance protections, unemployment benefits, and workers’ compensation, but they still enjoy the flexibility of schedule and control otherwise held by independent contractors.

In Canada, the classification hinges upon the number of clients the contractor has. A dependent contractor—like many contract construction workers—has only one client and depends on that client for income and sustenance of their business. A contractor with more than one client is an independent contractor because they are not exclusively dependent upon any one client. Were a state to create a dependent contractor classification, legislators would then be tasked with determining which select employee benefits employers would be required to provide dependent contractors versus full-time employees.

Although Uber is appealing the California Labor Commission’s decision, the commission’s ruling is important because it has sparked a renewed discussion of employee misclassification across not only the transportation services field, but also in the construction industry, where, as discussed above, it has long been an important issue.

As more states review employee misclassification, it is imperative employers, employees, and contractors alike be aware of any changes to state and federal employment laws. While employers are frequent targets of employee misclassification enforcement efforts, “independent contractors” may also be held liable, especially when they willfully comply with intentional misclassification. An employer should never assume that paying a worker by the hour, or any one of the other factors set forth above, guarantees the worker should be classified as one classification or another. If you are concerned about your business’s employment practices, consult an employment law attorney in your area who can best advise you on your state’s employment laws.

The Aftermath of Construction Accidents

According to a 2014 Washington, D.C.-based Bureau of Labor Statistics press release, the construction industry has the highest fatality rate of any industry in the U.S. In 2013, the construction industry saw a total of 796 fatal injuries with more than 100 more deaths than the next highest industry fatality rate in transportation and warehousing. Within the construction industry, general construction laborers are the most at risk for injury or death on the job.

These statistics are frightening, and the reality is that most construction accidents could have been prevented. Washington-based OSHA standards are in place to prevent most construction workplace accidents. Many of the primary causes of injury, including the fatal four—falls, struck by an object, electrocution, and caught-in/between—can be prevented if proper care is taken and OSHA standards are followed.

DEALING WITH A CONSTRUCTION-SITE INJURY

When someone is injured or killed at a construction site, the ramifications can extend to family members and last a lifetime. Work-related injuries can cause loss of income, chronic pain, extensive medical expenses, a decrease in quality of life and psychological suffering. Legal advice and workers’ compensation insurance can remedy the loss of income and medical expenses, but a worker can never get back his health and/or quality of life after a serious job-site injury.

Liability becomes an important legal issue after a construction-site injury and is generally determined by the following factors:

  • The responsibility of the general contractor to provide a safe work environment.
  • The responsibility of other subcontractors to act in a responsible and safe manner.
  • The responsibility of the worker to act in a responsible and safe manner.

Other parties that may be held liable in workplace injury claims include the employer, architects, engineers and equipment manufacturers. In some cases, fault lies with more than one party and navigating a construction injury claim without the aid of a knowledgeable attorney is nearly impossible.

A personal injury or workers’ compensation attorney working on a construction case generally does the majority of casework before a case is ever presented in court. The attorney must carefully investigate every detail of the accident independent of the insurance investigation and the injured worker’s employer investigation. The evidence presented in construction-accident cases often determines a worker’s or worker’s family’s ability to be made whole for medical expenses, lost income, legal fees and more.

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The Hidden Costs of Workplace Accidents

Asking an employee why he or she wants to be safe is like asking them why they work. Overwhelmingly, every roofer I ask this question to tells me he or she wants to go home at the end of the day. He doesn’t want to lose any time because losing time is losing money. And, believe it or not, money can buy happiness. A New York City carpenter once told me he fell 35 feet and broke multiple bones. He was out of work for two years, during which he collected $57,000 from workers’ compensation insurance. If he worked, he would have made more than $100,000 per year. In his words, “I almost lost my big house on Long Island and my high-maintenance wife.”

In addition to how accidents impact workers’ finances, they can seriously affect a company’s bottom line. A good Health and Safety Program can save a company money by cutting workers’ compensation insurance premiums; heading off needless, expensive and embarrassing OSHA citations; avoiding expensive and embarrassing lawsuits; increasing the efficiency of the workforce; and boosting workers’ morale, which consequently will improve their productivity. A good Health and Safety Program also will give a business owner peace of mind by knowing all his or her employees are working safely.

In my experience, project managers, job-site superintendents and crew foremen are the people who are reluctant to want job-site safety. They believe following safety standards slows the job down. Management is responsible for making money in a business that regularly grapples with close bids, tight schedules and limited job budgets. However, these factors do not take into account the “hidden” costs of workplace accidents. Oftentimes, accidents are more expensive than people realize because of these hidden costs.

Examples of Hidden Costs

Some costs created by accidents are obvious; for example, workers’ compensation claims cover medical costs and indemnity payments for an injured or ill worker. What people often don’t think about are the hidden costs, like the costs to train and compensate a replacement worker, repair damaged property, investigate the accident and implement corrective action, as well as maintain insurance coverage. Even less apparent are the costs related to schedule delays, added administrative time, lower morale, increased absenteeism and poorer customer relations.

Washington, D.C.-based OSHA’s Safety Pays Program states the lower the direct costs of an accident, the higher the ratio of indirect to direct costs. The more accidents that occur in a workplace, the higher the costs in increased insurance premiums and greater indirect costs. According to the Boca Raton, Fla.-based National Council on Compensation Insurance Inc., these include the following kinds of indirect costs:

  • Any wages paid to injured workers for absences not covered by workers’ compensation.
  • The wage costs related to time lost through work stoppage associated with the worker injury.
  • The overtime costs necessitated by the injury.
  • Administrative time spent by supervisors, safety personnel and clerical workers after an injury.
  • Training costs for a replacement worker.
  • Lost productivity related to work rescheduling, new employee learning curves and accommodation of injured employees.
  • Clean-up, repair, and replacement costs of damaged material, machinery and property.

Some of the possible indirect costs not included in these estimates are:

  • The costs of OSHA fines and any associated legal action.
  • Third-party liability and legal costs.
  • Worker pain and suffering.
  • Loss of good will from bad publicity.

The Human Factor

Direct and indirect costs certainly are motivation for preventing workplace accidents. In fact, when I ask roofing company owners why they want their employees to work safely, many automatically default to the money answer. However, in most cases, business owners are generous, caring members of their communities. I once sat across the desk of an owner of a large construction company after his team experienced a fatality. He asked me, “How do I look at myself in the mirror every morning, knowing one on MY guys didn’t go home today?” Even though he did not know this employee personally, he considered this worker one of his guys. Ultimately, it’s the human factor that is the most important reason to ensure safe working conditions on job sites.

My favorite phrase is “To protect my employer, I protect his employees.” I think they’re words to live by.

South Carolina’s Workers’ Compensation Laws Have Changed to Benefit the Injured and their Employers

Ensuring compliance with workers’ compensation laws is consistently a concern among many states because of the impact noncompliance can have on injured employees and employers who follow the law. Noncompliance with workers’ compensation laws negatively affects those injured on the job, as well as law-abiding employers. Fortunately, the workers’ compensation laws of South Carolina are implemented relatively efficiently and result in more resolved cases for injured workers than many other states. Some recent changes in the state’s laws are designed to make the process more efficient.

Workers’ compensation insurance provides medical benefits and wage reimbursement for employees who become injured while on the job. The South Carolina Workers’ Compensation Act provides that injured employees are entitled to recover necessary medical treatment, loss of wages during a period of disability, and compensation for permanent disability or disfigurement. There are three types of work-related injuries that can qualify for workers’ compensation payments: physical injuries, mental injuries accompanied by physical injuries and mental injuries with no physical injuries.

In South Carolina, employees may collect workers’ compensation for all wages and benefits, including those from other employers. This gives South Carolina employees an advantage over neighboring North Carolina employees who may only collect workers’ compensation for wages earned from the specific job on which the injury occurred.

Who Is An Employee?

The South Carolina Workers’ Compensation Act defines “employee” as “every person engaged in an employment under any appointment, contract of hire or apprenticeship, express or implied, oral or written … but excludes a person whose employment is both casual and not in the course of the trade, business, profession, or occupation of his employer … .”

Every South Carolina employer and employee is presumed to be covered by the act. Employers covered by the act are required to maintain insurance to cover compensation or provide the South Carolina Workers’ Compensation Commission with proof they have the ability to pay the compensation for an injured employee.

There are a few exceptions to the workers’ compensation laws, including businesses employing fewer than four employees or having a total annual payroll of less than three thousand dollars in the previous calendar year, regardless of the number of employees. Employers who qualify for exemption may elect to come under the act and may subsequently withdraw with written notice to the Workers’ Compensation Commission.

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