There have been several new laws in 2016, or new enforcement styles of existing laws, that are ready to make their mark on the construction industry. Among them are the US Department of Labor’s new rules on overtime pay and the Fair Pay and Safe Workplaces Act. Both laws affect the amount construction employees must be paid and when they should receive that pay, so documentation of employee time sheets and payments is becoming increasingly important. If your company plans to bid on any Federal Government work, violations of these new laws can keep you from getting the job.
Last year, we wrote about a great time sheet software, called TSheets, which electronically tracks time sheets and paychecks, integrates with QuickBooks and even allows employers to implement GPS tracking. Recently, the software company has put together an in-depth and interactive tool which highlights all successful cases of Fair Labor Standards Act lawsuits since 1985.
In the construction industry alone, there have been 11,000 successful wage and hour prosecutions by the Department of Labor against construction firms since 1985. TSheets also found that nationally, around 75% of DOL investigations lead to a prosecution. This is probably because, by its own admission, the DOL typically goes after the most egregious cases.
The average cost of a DOL prosecution is $13,720 (excluding legal fees) to each construction firm affected. The industry as a whole has repaid $152,133,833 in back wages to employees as a result of these prosecutions, as well as $3,039,244 of fines (civil money penalties) — making the total cost to the industry $155,173,076.
The worst affected businesses are:
- All Other Specialty Trade Contractors* (1,130 prosecutions, $14,296 cost per prosecution)
- Plumbing, Heating, and Air-Conditioning Contractors (1,088 prosecutions, $12,390 cost per prosecution)
- Commercial and Institutional Building Construction (1,065 prosecutions, $14,811 cost per prosecution)
- Electrical Contractors and Other Wiring Installation Contractors (771 prosecutions, $12,413 cost per prosecution)
- Roofing Contractors (686 prosecutions, $9,864 cost per prosecution)
(*The "All Other Specialty Trade Contractors" category is defined here and essentially means subcontractors.)
The worst affected states are:
- Texas (1,567 prosecutions, costing the state's construction firms $25,735,980)
- Florida (1,043 prosecutions, costing the state's construction firms $11902428.5)
- California (687 prosecutions, costing the state's construction firms $17,357,780)
- Pennsylvania (490 prosecutions, costing the state's construction firms $4,927,409)
- New York (438 prosecutions, costing the state's construction firms $5,674,116)
If you haven’t been taking wages and the laws surrounding them seriously, it’s time to start, especially as they begin to not only affect your current financials, but also you future financials if you’re disqualified from new projects. If you’re in need of some advice on how to protect yourself and your business from an FLSA lawsuit, TSheets also gathered some invaluable legal advice from industry experts, which you can find by clicking here.