Construction Contractors: Understand Labor, Health, and Safety Laws to Prevent Legal Trouble in Your Business

by Anne Bouleanu
- Mar 19 2014 - 3 min read

To stay in business, construction contractors are required to abide by certain legal standards. Although many compliance measures may be confusing, it is essential that construction firms obey these rules—they are designed to protect workers, ensure appropriate payments are made, and to make certain that a work environment is safe for everyone involved.

There are many guidelines to follow, and when starting a small business, it’s vital to understand these regulations to best manage business operations. Here are a few of the most important government labor, health, and safety laws that construction contractors must follow to avoid legal complications.

OSHA Guidelines

The U.S. Occupational Safety and Health Administration has many rules to keep employees safe while on-site. Here are a few of the major federal guidelines for residential construction workers, as laid out by OSHA.

  • All employees who conduct any work equal to or greater than six feet above the ground are required to be guarded by fall protection systems. Some of these protective devices include safety nets, guardrail systems, or personal fall arrest systems. This means any roofers, and even those who use ladders to hammer a nail into a beam six feet into the air, should be protected in some way.
  • Business owners or other experts must conduct regular inspections of job sites, judge the condition of equipment, and look at other materials. If any equipment is found to be unsafe, a construction contractor should stop using it immediately and remove the devices and/or materials from the site and place them out of reach of workers.
  • Only those who are fully trained by the contracting company or are experienced and have been previously trained are allowed to operate any heavy machinery.

construction contractors

These guidelines are put in place for good reason: They keep both employees and contractors safe and healthy. There are many more standards to abide by, so read through the regulations carefully. If you need a lawyer or expert in OSHA policies to make sense of some of the wordier restrictions—which is common considering the dense language in the extensive materials—don’t hesitate to seek out guidance. You’ll be happy you did when you have an accident-free job site and avoid legal trouble.

FLSA Mandates

The Fair Labor Standards Act has been around for more than 75 years and has been revised time and again to improve and update the law, which is focused on protecting workers around the U.S.

Construction contractors should consider these regulations when implementing an employee management policy. Not only is compliance a sign of a good business that values employees, but FLSA lawsuits are becoming increasingly common.

In fact, federal wage and hour lawsuits have increased to a new record high. Between April 2012 and March 2013, 7,764 FLSA suits were filed, Human Resource Executive Online reported. These kinds of lawsuits can greatly affect a business in terms of profit and reputation. There are undeniably positive reasons to end up in the news. Great public-relations boosts include stories about completed projects and testimonials from happy customers.

But the last thing a company needs is exposure on how they violated the FLSA. Litigation on this level is expensive, time consuming, and can cost a company even more money outside any awarded damages due to negative press.

construction contractors

Here are a few of the many FLSA stipulations that apply to U.S. construction businesses.

  • A construction manager or business owner must set up a workweek in which employees are regularly compensated with a fair wage that at least equals the federal minimum wage rate of $7.25 per hour.
  • When an employee works more than 40 hours in a workweek, staff members must be paid time and a half for each extra hour worked.
  • Employers must abide by record-keeping regulations to track workers. The Department of Labor has a comprehensive list of these requirements, which every contractor should examine. Some of these required records include an employee’s name, social security number, address, sex, occupation, employment start date, hours worked per day, and pay rate, as well as total compensation paid for overtime hours each week.

There are many more regulations, which can be found on the DOL Wage and Hour Division website. Remember that even though these guidelines may be complicated and a pain to abide by, they protect workers across the country and make for safer, healthier, and happier workplaces. They also help steer small-business owners toward sound business practices that, in the long run, benefit everyone involved in a company’s operations.

For more on construction rules and regulations, check out You Got a Permit for That? Construction 101 [Infographic].

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