Licenses, insurance, employee contracts—the list of labor law requirements you have to be aware of goes on for miles. It’s essential that we have these laws to protect us and our businesses, but the nitty-gritty of compliance can be overwhelming.
That’s why we’ve compiled a comprehensive list of requirements you should keep in mind when it comes to labor law. We have 30 years of experience with contract work and the responsibilities that come with public works projects, so we’re well-versed with the pitfalls of labor law.
Our expertise is in California, so remember to check with your state and local laws. But, we will cover all federal requirements and that’s a very good place to start.
Who Has to Follow Labor Laws?
The short answer: any business with employees needs to comply with labor law. This includes full-time, part-time, and contract workers. Sole proprietors and independent contractors are not considered “employees” under the law, but they still need to be aware of labor laws that may affect them.
Ultimately, the prime contractor is liable for their sub and specialty contractors. This blog is a useful tool for the prime contractor to ensure that their sub and specialty contractors know their duties on public works projects.
Don’t forget to check out our full checklist for the code numbers and additional information you should keep track of. When employers and employees are aware of their rights and responsibilities, projects are safe, end on time, and save everyone money.
Health and Safety Laws
OSHA (Occupational Safety and Health Administration) has regulations that apply to every type of labor. Their website has in-depth information that outlines the rights of employers and workers, especially when it comes to employee health and safety.
Take the time to go find your specific project and understand the laws you’re responsible for. Whether you’re working on a school or a submarine, OSHA will have guidelines that will protect everyone involved with your construction.
Licensing and Reporting
Do you know the feeling of driving around without your car registration updated? At any time, you could get pulled over and get a ticket. Contracting without the proper licensing can give you a similar feeling of dread but with much bigger consequences than outdated registration.
All contractors and subcontractors must have correct and current licensing for all construction that they will be undertaking. Penalties for unlicensed work vary by state, but some might fine you up to $2000 a day for working without a license. It’s best to get proper licensing in the first place and never have to worry about it.
Any apprentices that are hired for a public works project must be registered (take a look at Labor Code Section 1777.5, relating to Apprentices on Public Works). The process for hiring apprentices looks like this:
- Notify approved apprenticeship programs of the contract award
- Employ apprentices
- Pay training fund contributions
Listing of Subcontractors
All prime contractors must list all subcontractors that they hire to provide services for public works projects covering more than one-half of a percent.
Proof of Eligibility/Citizenship
According to federal law, hiring undocumented workers is illegal. Contractors and subcontractors must secure proof of eligibility/citizenship from all workers.
Wages and Payments
Payment of Prevailing Wage Rates
Contractors and subcontractors are required to pay no less than the specified general prevailing wage rates, which vary by state. Linked here is the information for the state of California; you can use it as a guide to find the right information for your state.
An important tip: if the prevailing wage rate changes during the contract, you must pay for any changes.
Certified Payroll Reports
Accurate recordkeeping protects you and your employees. For your payroll reports, you should include the employee’s:
- work classification
- straight time and overtime hours
- fringe benefits
Don’t forget the actual per diem wage paid to each owner, journey person, apprentice worker, or other employee hired in connection with the public works project.
Payroll records must be kept up to date, submitted on time and as one package, and available for inspection by employees or their legal counsel. Fines will apply if payroll law isn’t followed, so make sure that you have a good recordkeeping system.
A kickback is often referred to as a type of bribery; it’s illegal payment for preferential treatment or any other type of improper services received. While kickbacks can take many different forms, they all feature some sort of collusion between two parties.
Acceptance of Fees Prohibited
It is a misdemeanor to charge or collect (or attempt to do those things) a fee or for registering any person for public work.
Also, any contractor or subcontractor who places an order for the employment of a worker on a public works project where the filling of the order for employment involves the charging of a fee (or any other sort of compensation) is also guilty of a misdemeanor.
Workers Compensation Insurance
This one is simple! Labor Code Section 1861 requires that contractors and subcontractors be insured properly for Worker’s Compensation.
Itemized Wage Statement
And even simpler: employees must be provided with itemized wage statements.
If a contractor or subcontractor doesn’t pay prevailing wages or doesn’t employ apprentices, there are penalties such as forfeitures and debarment.
Nondiscrimination in Employment
Make sure to study all nondiscrimination labor laws because not only are they morally important, knowing them backward and forward will save you a lot of trouble.
When businesses participate in unfair competition, it can look like any unlawful, unfair, or fraudulent business act or practice and unfair, deceptive, untrue, or misleading advertising. The best rule of thumb is to be transparent in your transactions and business practices.
Make Sure All Your Bases Are Covered
We hope this article has provided you with good footing for understanding the labor laws and best practices. It may seem like a lot, but the laws are there to protect you as a business owner or contractor.
Don’t forget to check out our checklist and if you need more answers, please reach out to us at Stronghold Engineering. Our experts have decades of experience completing successful public works projects while following the letter of the law.