August 2018

DOL Releases Videos Providing Guidance on Wage Laws

The U.S. Department of Labor’s Wage and Hour Division has released a series of instructional videos that provide assistance to employers about their responsibilities to comply with the Fair Labor Standards Act. The brief, plain-language videos are intended to help employers who simply want to understand what the law requires. Topics covered include:

• Coverage: Does the FLSA apply to my business?
• Minimum Wage: What minimum wage requirements apply to my business?
• Deduction: Can I charge my employees for uniforms or other business expenses?
• Hours Worked: Do I have to pay for that time?
• Overtime: When do I owe overtime compensation, and how do I pay it correctly?

For more information about the FLSA and other wage-related laws, see www.dol.gov/whd.

ASA Calls for Sub Payment Protections on Water Infrastructure

ASA, in collaboration with three associations representing the surety industry, called on Congress to provide subcontractor payment assurances on projects financed through the federal Water Infrastructure & Innovation Act. WIFIA is used to provide loans and loan guarantees to finance water infrastructure projects across the country. Under current law, it is not clear whether existing federal policy to require performance and payment bonds on projects financed through federal grants applies to WIFIA-financed projects. ASA supports an amendment to pending water infrastructure legislation that would extend the tenets of the federal Miller Act, the existing law that requires a federal prime construction contractor to provide performance and payment bonds, to all projects financed through WIFIA. Without this clarification, construction subcontractors and suppliers on water infrastructure projects will not be assured of payment protections. The surety associations participating in this important effort are the American Insurance Association, the National Association of Surety Bond Producers, and The Surety & Fidelity Association of America.

OSHA Proposes Further Revisions to Crane Operator Qualification Rule

OSHA, on May 21, published a proposed rule intended to provide long-term clarity regarding crane operator certification requirements and to reinstate the employer duty to ensure that a crane operator is qualified to safely operate equipment. Indeed, approximately one-fifth of OSHA’s notice details the responsibility of employers in addition to having their operators certified. The proposed rule also addresses qualifications for trainers; expands the type of certification programs for crane operators; clarifies the requirements for operators-in-training; clarifies that employers are responsible for paying for certification programs for employees; and clarifies that duty-cycle cranes or cranes in the 5,000 to 35,000 lb. capacity are included. OSHA’s proposed rule also raises the specter of still another extension of implementation of the operator certification compliance date in order to provide OSHA with more time to complete rulemaking; the compliance date currently is Nov. 10, 2018.

ASA Helps Subs Evaluate the Environment Through a Public Policy Lens

Since its inception in 1966, ASA has been the principal advocate for the rights of construction subcontractors, specialty trade contractors and suppliers in the public policy arena. An ASA government advocacy tool, The Business Environment for Construction Subcontractors Through a Public Policy Lens: An Evaluative Tool, poses a series of questions on nine subcontractor issues. A subcontractor advocate’s responses to these questions will help him/her determine and prioritize their actions in the legislative, regulatory and judicial arenas. The issues addressed include:

• Pay-if-paid clauses
• Prompt payment on private work
• Prompt payment on public work
• Retainage on private work
• Retainage on public work
• Mechanic’s lien rights
• Statutory payment bond rights
• Subcontractor payment assurances on public-private partnerships
• Risk allocation, including indemnity and additional insured

ASA has reference materials on each of the above issues, including legislative work kits, 50-state law reviews, fact sheets, white papers and more; these documents are available in the Member Resources section on the ASA Web site.

A subcontractor advocate also may want to consider issues not included in the questionnaire. For example, pre-contract disclosure of the terms of consolidated insurance policies, anti-forum selection requirements, procedures to limit bid shopping on public work, and contractor licensing are all issues of high interest to construction subcontractors. The evaluative tool, which was developed by the ASA Task Force on Government Advocacy, is available under “Contracts and Project Management” in the Member Resources section of the ASA Web site.

ASA Resource Answers Construction Subcontractors’ Questions About Pay-If-Paid

“Pay-if-paid” contract clauses can cause big problems for unpaid construction subcontractors and suppliers. Such clauses specify that a subcontractor or material supplier will not be paid for the work it performed or the supplies or services it provided “if” the general contractor doesn’t receive payment from the project owner. Pay-if-paid is not enforceable in all circumstances, however, and ASA’s Contingent Payment Clauses in the 50 States helps subcontractors and suppliers understand their risk.

This resource is of tremendous business value to subcontractors and suppliers, who need to know the risk of pay-if-paid. Pay-if-paid is enforceable in some, but not all states, and the states in which pay-if-paid is enforceable differ as to when a contract clause creates a true ‘condition precedent to payment’ threatening the right of unpaid subcontractors to be paid for satisfactory work.

Contingent Payment Clauses in the 50 States explains for each state:

• Whether a “pay-if-paid” clause will be enforced in that state if it is unambiguously drafted.
• Whether the state distinguishes between “pay-if-paid” and “pay-when-paid” provisions.
• Whether “pay-when-paid” clauses allow a contractor in the state to only delay payment to its subcontractors for a reasonable time.
• Key statutes and cases that describe the state’s position on contingent payment clauses.

ASA general counsel, Kegler, Brown, Hill and Ritter, Columbus, Ohio, prepared the manual. The manual is available to ASA members under “Contracts and Project Management” in the Member Resources section of the ASA Web site by logging in at “LogIn/Access Member Resources.”

ASA White Paper Provides Tips on Project Financing

Construction project insolvency is a major concern of construction subcontractors who provide a large amount of labor and materials to the prime contractor on credit. A 2015 ASA survey revealed that slow final payment, slow progress payment and pay-if-paid subcontract clauses are among the top concerns of ASA members. All three of these concerns can be traced back to the adequacy of project financing, at least absent predatory behavior by those controlling the cash flow.

ASA’s White Paper on Project Financing is intended to help ASA members understand the importance of the creditworthiness of their potential customers. The white paper addresses industry policies and practices, including a review of relevant clauses in contract documents published by ConsensusDocs and the American Institute of Architects.

The ASA Addendum to Subcontract, which is one of the documents in the ASA Subcontract Documents Suite, includes a provision that clarifies the contractor’s obligation to provide disclosures to the subcontractor as a condition precedent to the subcontractor’s performance. The white paper also provides tips on protecting your business, including arguments to make to the prime contractor and how to get information on project financing. The ASA White Paper on Project Financing is available under “Contracts and Project Management” in the Member Resources section of the ASA Web site.

OSHA Web Site Lists Trainers for 10- and 30-Hour Safety Training

The Occupational Safety and Health Administration’s Web site now lists Agency-authorized trainers who conduct 10- and 30-hour Outreach Training classes in construction, general industry, maritime or disaster site work. Under the Occupational Safety and Health Act of 1970, employers are responsible for providing a safe and healthful workplace. Training in the safe way for workers to do their jobs well is an investment that will pay back over and over again in fewer injuries and illnesses, better morale, lower insurance premiums and more. The 10-hour training program is intended to provide an entry level construction worker’s general awareness on recognizing and preventing hazards on a construction site. The 30-hour program provides additional training on specific hazards of the job. OSHA also provides other information on employers’ training requirements and offers free resources including publications, videos and other assistance to help employers to protect employees from injuries and illnesses.

Help ASA Advocate for Subcontractors in the Courts

While ASA and its chapters represent subcontractor interests before legislative and executive bodies at all levels of government, all too often the Association finds that the courts interpret the laws and regulations approved by these other government bodies. That means ASA also must muster the financial resources to represent subcontractor interests in the courts on issues like contingent payment, mechanic’s liens, indemnity, insurance coverage, and no damage for delay. Fortunately, ASA can tap its Subcontractors Legal Defense Fund and the Foundation of ASA’s Subcontractors Legal Research Fund to finance its briefs on important court cases. These two funds finance ASA’s advocacy on behalf of subcontractors before courts across the country. Both are funded entirely by voluntary contributions that are earmarked for precedent-setting cases where subcontractor rights are at stake. ASA can’t continue its work in support of subcontractors unless it has the funds to pay for participation in the court cases that matter most to subcontractors.  With the help of ASA members, ASA can marshal the financial resources needed to invest in precedent-setting litigation to establish subcontractor rights. You can make your contribution through the ASA online store. For more information, visit the ASA SLDF Web site at www.sldf.net.