Top Legal Needs for Construction Companies

Wage and Hour. Construction companies must ensure that it is compliant with federal and state wage and hour regulations, such as minimum wage, overtime, mandatory breaks, "on call" time, split shifts, child labor law, wage deductions, employee classifications and exempt status issues.

Immigration. Foreign workers comprise a significant portion of the workforce within the construction industry. Companies must be cognizant of I-9 compliance and of Immigration and Customs Enforcement (ICE) audits and investigations, as well as ensure that they are checking a worker’s permanent resident status, obtaining labor certifications, and/or providing temporary work permits for foreign workers.

If a construction client does not pay for services rendered, construction companies have a wide array of tools to help them recover payment, including mechanics lien and bond claims, in addition to the typical breach of contract claims. A mechanic's lien, also called a construction lien or a builder’s lien, is a claim that encumbers the property or project, and, many times, prevents the property owner from selling the property until the outstanding amount is paid. Securing a mechanic’s lien and making bond claims can be difficult and time consuming, but are often good ways to obtain payment for services rendered.

A. Challenging or Defending a Bid Protest

Most public works projects are subject to competitive bidding laws. Reasons for these laws include: (i) protecting the public from waste, fraud, and abuse and (ii) proving qualified bidders with a fair process that eliminates favoritism and corruption. With competitive bidding, the winning bid is generally the lowest bid that is both “responsive” and “responsible.” To be responsive, the bid must meet all the terms of the bid package (i.e., the bidder filled out all appropriate forms, provided all the proper disclosures and securities, etc.). To be responsible, the bidder must be deemed “trustworthy” and have the fitness and capability to perform the project. Generally, a bid protest occurs when a bidder protests the rejection of its own bid or protests the awarding of a public works contract to another bidder. A company should be aware of the projects subject to competitive bidding. The company should also understand and be aware of local bidding requirements to ensure that it submits a competitive bid and maintains accurate documentation to defend against any potential bid protests.

B. Breach of Contract

A contract is a promise or set of promises that the law will enforce or recognize. When this “promise” is not kept or honored, a party can sue for damages. Generally, construction companies typically bring breach of contract claims against owners on construction projects or upper tier contractors because they have not been paid for work performed. Typically, in response to such breach of contract claims, the party against which the lawsuit was brought asserts that it does not owe the amount claimed by the contractor because: 1) the party did not agree to pay for the work at issue; 2) the work done by the contractor was done improperly; and/or 3) the work done by the contractor was not done timely.

The Occupational Safety and Health Administration (OSHA) enforces safety and health standards in the workplace, including construction sites, which are heavily regulated by OSHA. While accidents can and do occur on worksites, companies that have effective safety programs, including safety policies and safety training, significantly minimize hazardous situations and exposure for OSHA citations. All construction companies should be prepared for OSHA inspections, and should adopt procedures outlining how it will respond in the event an OSHA inspection is initiated on one of its projects or it receives OSHA citations.

If you have questions about an issue at your construction company and need advise from an attorney, let Legal Services Link find one for you!