Lawsuits and taxes and injuries, oh my!  Legal challenges in construction don’t happen when you expect them to. On any typical day an employee might fall off a scaffold, fail to sign off on their time sheets or report another employee for harassment. All these issues can add up to big lawsuits, fines or even force a construction company to shut down.

  • In 2021, OSHA penalties equal $13,653 per violation or $136,532 for willful or repeated violations of worksite safety issues.  
  • DOL unpaid wage lawsuits can easily add up to hundreds of thousands of dollars. 
  • Not paying employment taxes or workers’ compensation insurance, either intentionally or unintentionally, can not only add up to more than a million dollars in fines, but may include criminal charges, which was the case for one construction company 

Most construction companies hope legal challenges never arise but that type of thinking isn’t logical. There are several areas where companies could find themselves in hot water if they’re not careful—and even if they are. 

Types of Legal Challenges in Construction 

The list of types of legal troubles a construction company can encounter is long and includes things that might be anticipated, like adhering to compliance laws, and others you may not even be aware of. 

Some of the biggest compliance offenders include: 

  • Not paying overtime wages. Nonexempt employees must be paid the minimum federal minimum wage and overtime at one-and-one-half-times the regular rate of pay, under the Fair Labor Standards Act (FLSA). Failing the pay workers what they’re owed, can lead to lawsuits.  
  • Not providing healthcare coverage. The Employee Retirement Income Security Act (ERISA) requires that certain employers must provide their workers with healthcare coverage. The Affordable Care Act and the Family and Medical Leave Act also fall under Employee Benefits Security Administration. Failure to comply with these acts, like terminating an employee who can’t work in order to care for a family member, can result in lawsuits for wrongful termination. 
  • Not taking steps to prevent accidents. Workplace accidents, like injuries from falls, electrocution, tip-overs or collapses, happen. While they can’t be predicted, OSHA exists to make sure companies follow guidelines to make their workplaces safe, preventing as many accidents as possible. Failure to adhere to OSHA guidelines may result in fines, lawsuits and even criminal charges. 
  • Not protecting employees from sexual harassment. Sexual harassment is an issue in construction where only a small percentage of workers are female, easily allowing the male perspective to become dominant, according to Construction Executive. One survey showed 66% of respondents reported experiencing some form of sexual harassment while working in construction and 60% witnessed it happening. Many female workers also said if they reported the harassment, they were illegally terminated. Employees whose harassment complaints are ignored or retaliated against have legal grounds to sue their employers. 

Unanticipated Legal Challenges for Construction 

Most everyone can understand the need to follow those laws already on the books but what about circumstances that aren’t always cut and dry? Having access to legal advice can protect you when issues arise that you didn’t anticipate. 

  • Medical marijuana. There are a slew of legalities surrounding the use of legally using medical marijuana. Currently 35 states and the District of Columbia have legalized marijuana for medical use. Laws vary on which conditions qualify for legal use, how much marijuana can be possessed at one time, how it can be consumed and whether a qualified patient may grow their own. Some states even have laws allowing cardholders from other states to legally use marijuana for medical reasons, even if it’s illegal in the state they currently work or reside in. 
  • Tax responsibilities. Tax laws change every year and employers must track changes in payroll exemptions and other deductions. The COVID-19 pandemic added to the confusion. Payroll tax obligations shifted and some employers offered free vaccinations or compensated employees for receiving a vaccination, all which have to be figured for accurate W2s and other tax forms. 
  • Employees’ social media posts. Social media is a great tool to market your business but if an employee posts something that creates a hostile work environment your company could be liable, even if the employee posted on their personal page after hours, according to the National Law Review 

These are just a couple of areas that can cause legal issues for construction companies but more are out there and new issues arise daily. 

Seek Legal Counsel Before You Need It 

Having legal counsel can safeguard your construction company against the financial impact of fines and lawsuits. But not every company can afford to keep an attorney on retainer. That’s where services like myHRcounsel  can help. MyHRcounsel can provide guidance to help you potentially avoid some legal complications entirely. 

Case in point, your employee handbook could be filled with outdated information that might open the door to litigation, especially when it comes to compliance. Companies like myHRcounsel can provide you with a new, compliant handbook (as opposed to redlining or updating existing drafts). Not only does the service address compliance, but having the work done by a professional allows the company to provide legal protection of the handbook in the event an employee brings a claim or raises issues with respect to the interpretation of the handbook. 

MyHRcounsel partners with companies to provide legal advice on HR and employment law with unlimited access to attorneys for an annual flat fee. It is also one of very few national construction law firms. MyHRcounsel stays up-to-date on issues like the legality of non-compete agreements, EEOC guidelines, minimum wage increases, DOL contractor rules, marijuana legalization and more.  

Arcoro’s trusted partner, myHRcounsel, offers 24-7 access to on-demand legal assistance from HR and employment law specialists for your specific state.

When added to your Arcoro HR management software subscription, myHRcounsel provides access to legally backed answers to any HR question at a price that is affordable and predictable.


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