Header graphic for print

New York Construction Law

Sexual Harassment Legislation Imposes New Employer Obligations

Posted in Labor & Employment in Construction

New York’s FY 2019 Executive Budget includes new legislation aimed at combatting sexual harassment in the workplace.  According to the Governor, the legislation purports to be the “most comprehensive anti-sexual harassment protections in the nation….”  Here are the highlights:

  • Effective Immediately: The new legislation prohibits sexual harassment of “non-employees in the employer’s workplace,” including “contractors, subcontractors, vendors, consultants or other persons providing services pursuant to a contract in the workplace or who is an employee of such contractor, subcontractor, vendor, consultant or other person providing services pursuant to a contract in the workplace. July 11, 2018:  Any settlement, agreement or other resolution directly relating to sexual harassment claims may not include language that prevents the disclosure of the underlying facts unless the plaintiff (1) has been given 21 days to consider the confidentiality/non-disclosure provision and 7 days to revoke the agreement after signing.
  • Effective July 11, 2018: Mandatory arbitration agreements with respect to sexual harassment claims will no longer be enforceable and shall be deemed null and void.  Worth noting, mandatory arbitration agreements that include sexual harassment disputes remain enforceable with respect to all other claims.
  • Effective October 9, 2018: Employers must establish a sexual harassment prevention policy and conduct annual interactive sexual harassment training.  The Department of Labor has been charged with consulting with the Division of Human Rights and producing a model training program.  The new rules also mandate written sexual harassment policies that include a standard complaint form, examples of prohibited conduct, and a procedure for timely investigations

Going Forward . . . Watch for information on the Department of Labor’s model sexual harassment prevention policy and training program as well as Farrell Fritz’s Master Class for those responsible for sexual harassment training initiatives!

If you have questions concerning the development or implementation of these new employer obligations, contact Domenique Camacho Moran, Farrell Fritz’s Labor and Employment Practice Group at 516.227.0626 or dmoran@FarrellFritz.com.

Bad Language: A Good Reason to Fire People?

Posted in Labor & Employment in Construction

What is an employer to do when an employee goes on a tirade at the work place or on social media?  In general, an employee cannot be disciplined by his employer for statements about work-place concerns, such as wages or conditions of employment. Even the employee’s use of obscenities may be legally protected if used while complaining about the terms and conditions of employment.

Before terminating an employee for the use of vulgar and profane language, consider the following:

Obscene Language

  • A clearly defined written policy prohibiting the use of obscene or vulgar language demonstrates the company prohibits this type of misconduct and supports discipline.
  • Disciplinary action for an employee’s violation of its language policy will be viewed more favorably if the company enforces its policy consistently.
  • Even with a defined language policy, if the company has a history of tolerating the use of profanity by its employees without discipline, then the statement is more likely to be protected.
  • If the employee’s comment is contemporaneous with the employees raising work-place concerns or complaints with management, then the speech is more likely to be protected.

We encourage you to consult with an attorney before taking disciplinary action as a result of employee language.

Wage and Hour Pitfalls Part 1: What You Need To Know

Posted in Labor & Employment in Construction

1. Employers Must Pay “Manual Workers” Weekly.

In New York, employers are required to pay manual workers weekly.  A “manual worker” includes “a mechanic, workingman or laborer” or individuals who spend more than 25% of working time engaged in physical labor.  “Physical labor,” according to the Department of Labor, includes “countless physical tasks” not just those that require heavy lifting or brute strength.pay

If you employ “manual workers,” you must issue paychecks weekly and pay them all wages owed within seven calendar days after the workweek ends.  For example, if your workweek ends on Friday, May 26, 2017, you must pay your manual workers for all hours worked during that pay period by June 2, 2017.  If you employ more than 1,000 employees, you may seek authorization from the Commissioner of Labor to pay less frequently.

2. Employers Cannot Require Direct Deposit.

Employers in New York may pay employees by cash, check, direct deposit, or payroll debit cards. However, Labor Law §192 prohibits employers from requiring non-exempt employees (those paid on an hourly basis) to accept wages by direct deposit or payroll debit cards without advance written consent from each employee.

In September 2016, the Department of Labor adopted new regulations regarding the notice and consent requirements. Legal challenges have delayed implementation of the new regulations.  Nevertheless, employers should continue to obtain written consent from employees before paying wages through direct deposit or payroll debit cards.

3. Prohibited Deductions From Employee Wages

New York employers are prohibited from making any deduction from employee wages that is not specifically listed in Labor Law §193.  Authorized deductions may be made for insurance premiums; pension, health or welfare benefits; contributions to a bona fide charitable organization; union dues; and other enumerated payments for the benefit of the employee.

Deductions are never permissible for the purchase of tools, equipment and attire required for work; recoupment of unauthorized expenses; or repayment of employer losses associated with spoilage and breakage; or repayment of employer fines or penalties incurred as a result of the employee’s conduct.

Consult with employment counsel if you have any questions about wage and hour practices in New York.

New York Mandatory Pay Notices: What Employers Need to Know

Posted in Labor & Employment in Construction

While employers generally provide detailed information to new hires about their pay, New York law now requires employers to provide written notice to employees when they are hired.  A failure to provide the required written documentation may result in civil money penalties up to $5,000 per employee. what employers need to know

Pursuant to the New York Wage Theft Prevention Act (WTPA), written pay notices must include:

  • Employee’s rate of pay, including overtime rate (if applicable);
  • How the employee is paid – by the hour, shift, day, or week;
  • Employee’s regular payday; and
  • Official name of the employer and principal business location.

Wage notices must be provided in English or the employee’s primary language and must be kept for six (6) years following termination of employment.  While no specific form is required, sample notices are available at the New York State Department of Labor’s website.

Finally, employers may notify employees of pay rate increases or changes to the regular payday or primary business location on employee paystubs; however, employers must provide employees with separate written notice one week prior to any reductions in pay.


Are Employers Required to Make Contributions to Union Pension Fund for “Bonus” Payments?

Posted in Labor & Employment in Construction

Hammering Nails Construction has a CBA (collective bargaining agreement) with Local 1 of the United Brotherhood of Widgetmakers (“Union”). After a pension fund audit, Hammering Nails received a letter claiming it owed approximately $50,000 in additional pension contributions based on unreported “bonus” payments. Does the Company have a problem?Pension Contributions

Under the CBA, Hammering Nails must pay pension and welfare contributions based on the “hours worked” by member employees. Hammering Nails pays the hourly rate established in the CBA for all hours worked and pays pension and welfare contributions based on those hours.  In addition, however, to keep workers happy, Hammering Nails pays “bonuses” to employees following a particularly busy week or month.  Hammering Nails did not make contributions based on the bonus payments.

However, under the CBA, employer contributions to the Union pension fund are based on the “hours worked” by employees. Specifically, the CBA requires a pension contribution of $0.63 for every hour worked.  Hammering Nails has made the required contribution for all hours worked (and paid).  The pension fund audit calculated owed pension contributions by converting bonus payments to so-called hours worked.  The CBA, however, does not require additional contributions based on bonuses.  Rather, the CBA specifically states that contributions must be paid for the hours worked.  Not only were the bonuses not guaranteed compensation, but, in addition, the bonuses were not based on employees’ work hours.  Employees never had a contractual right to receive a bonus – the decision was always within the Company’s discretion.  As a result, these bonuses were not “wages” paid based on hours worked, and the Company should not owe additional pension contributions based on the bonus compensation.

The Risky Business of Warranties

Posted in Architects & Engineers, Construction Contracts

Owners and contractors beware! The warranty you get may not be what you bargained for.

Many construction contracts, including widely used industry form contracts, contain two distinct warranties, a general warranty and a call-back warranty.  For example, the general warranty contained in the American Institute of Architects, AIA Document A201 – 2007, General Conditions of the Contract of Construction, provides that:

materials and equipment furnished under the Contract will be of good quality and new unless the Contract Documents require or permit otherwise. The Contractor further warrants that the Work will conform to the requirements of the Contract Documents and will be free from defects, except for those inherent in the quality of the Work the Contract Documents require or permit. Work, materials, or equipment not conforming to these requirements may be considered defective.

Notably, the standard AIA general warranty is not limited in time.Warranties Blog

The call-back warranty, on the other hand, traditionally requires the contractor to promptly correct work found not to be in accordance with the requirements of the contract for a period of one year.  In other words, if the work is defective and the owner timely notifies the contractor of the defect, the contractor must return to the job and fix the work.  If the contractor does not correct the work in a reasonable time, the owner can repair the defective work and seek the cost of the repairs from the contractor.

The call-back warranty is often misinterpreted as a limit on the general warranty. However, the call-back warranty is generally interpreted as an additional warranty, not a one-year time limit on the general warranty.  As a result, the contractor is still liable for defective work covered under the general warranty beyond the one-year call-back period.

Identifying the relationship between a general warranty, a call-back warranty and any other warranties is essential to effectively negotiating a construction contract. To avoid unanticipated consequences, owners and contractors should take care to clearly understand warranty provisions before signing!

Travel Time: To Pay or Not to Pay

Posted in Labor & Employment in Construction

Do I have to pay my workers for travel time when I provide transportation to a job site?

Slate Rock and Gravel, Inc. has a reputation for completing jobs on time and under budget. For their convenience, employees often report to the yard at 5:15 a.m. and then travel to the construction site in company trucks loaded with tools.  They always arrive before the construction site opens at 7:00 am, and leave together when the whistle blows at 3:30 pm.  Most days, the truck returns to the yard just before 5:00 pm.  Some employees choose to meet the Slate Rock and Gravel foreman at the site.  Recently, Fred, a longtime employee, started complaining that Slate Rock and Gravel had cheated him out of overtime.  Fred claims the company owes him (and all the other employees) for time spent traveling from the yard to the jobsite and the jobsite back to the yard.  Does Slate Rock and Gravel have a problem?Time clock

Probably not.   Time spent travelling from home to work before the regular workday is generally not considered compensable work time.  Even an employee who travels in an employer-provided vehicle, transporting work equipment is engaged in ordinary home to work travel.  29 C.F.R. §785.35.  Fred and his coworkers are meeting at the yard for their own convenience and benefit, not because they are directed to do so by their employer.  On the other hand, if Fred and his co-workers were required to report to the yard to receive instructions or perform other work there, travel time to the job site would likely be viewed as part of their principal activities, i.e., “travel that is all in a day’s work.”  29 C.F.R. §785.38.  The same is true of travel time back to Slate Rock and Gravel’s yard at the end of the day.

Practice Tip: Make sure you inform employees, in writing, that they are not required to report to the yard or travel to and from job sites in the company vehicle.

Did the Union Cross the (Picket) Line?

Posted in Labor & Employment in Construction

When I arrived home last night, there were picketers in my front yard carrying signs saying “Shame on Johnny!  He doesn’t pay union wages!”  This morning, the picketers have set up shop on the sidewalk outside our construction yard.  Now, they have signs telling my employees and customers that I am “Cheating the American Worker.”  Can I make them stop picketing?

Picket SignSeeing men and women carrying placards in your front yard or outside of your business is never a comfortable feeling. Unions use picketing to organize workers; in other words, to convince workers that they should join a union or to pressure employers to pay higher wages.  However, a union’s right to picket is not without limits.

Generally, unions and workers are permitted to picket outside an employer’s primary place of business to convince employees that they should join the union.  This type of activity is often called “recognitional” or “organizational” picketing.  When employees already have a union, employees and unions may use picketing to pressure an employer to increase wages and benefits or to improve working conditions.  In these circumstances, the picketing activity is lawful IF the activity: (1) takes place at the employer’s place of business or job site; (2) does not physically prevent workers (or others) from entering the employer’s premises or job site where the employer is performing work; and (3) does not involve threats of violence, acts or force, or destruction of property.

But, not all picketing is allowed. For example, unions are not permitted to engage in organizational picketing in the twelve months following a union election or recognition of a union.  Similarly, while unions are allowed to picket for the purpose of “informing the public” that an employer pays wages that are below “area standards,” they are not permitted to use “area standards” picketing as a ruse to organize workers.  In addition, picketing outside the homes of business owners, supervisors, and customers is often prohibited.

If picketers are disrupting your business, you may be able to limit their activity. We encourage you to consult with an attorney to determine what measures can be taken to address the situation.

Public Private Partnerships: Securing Payment for Labor and Materials

Posted in Construction Contracts

What happens to contractors and subcontractors who are without lien rights when a private developer who is building on public land with private money defaults on the project? A recent court decision clarified the parties’ rights and obligations for those projects that are privately funded on publicly owned land, i.e., Public Private Partnerships (“PPP”).Public Private Partnerships

Under New York’s Mechanics’ Lien Law, when the project is a PPP, the public owner must require that the private developer post a bond or other form of undertaking guaranteeing prompt payment of moneys due to the contractor or subcontractor.  While not exactly a lien, such an arrangement is designed to ensure that contractors and subcontractors get paid for labor and materials on the project.  While most in the industry are familiar with how a bond works, the phrase “other form of undertaking” is subject to interpretation.

In a case of first impression, a three-judge panel in Skanska USA Bldg. v. Atlantic Yards B2 Owner, LLC, analyzed what would satisfy the obligation to post “a bond or other form of undertaking.”  In that case, the contractor argued that a “guarantee” provided by an affiliate of the developer was not equivalent to a bond or “other form of undertaking” under the statute.  The Court disagreed.  The Court ruled that a formal “guarantee” that an affiliate would “fully and punctually pay and discharge any and all costs, expenses and liabilities incurred for or in connection with the Guaranteed Work,” the Court found, was sufficient to satisfy the statutory obligation.  Although the Court acknowledged there are better guarantees available, such as a letter of credit, the judges found the statute did not require the “best” form of guarantee; and the formal promise to pay met the statutory threshold.

What does this mean for the industry? If this decision is upheld, it may result in cost savings to PPP developers who may no longer incur bonding or related costs; however, it may also result in increased risk for contractors, subcontractors and suppliers who, in the absence of a bond, may have less security in the event of a project default.

2017 Minimum Wage Hike: What You Need To Know

Posted in Labor & Employment in Construction

Effective December 31, 2016, New York no longer has a state wide minimum wage. In 2017, the minimum wage is based on where employees work. Also, in New York City rates depend on the number of people you employ.

New York City (11 or more employees) $11.00
New York City (1-10 employees) $10.50
Nassau, Suffolk, and Westchester Counties $10.00
All other New York State Counties $9.70

Other Significant Changes:Minimum Wage

  • Businesses with workers in multiple regions can either: (1) pay the highest applicable minimum wage rate to all employees, or (2) pay the applicable minimum wage for that geographic region.
  • When counting employees in New York City, all employees, including part-time and seasonal employees, as well as workers employed by more than one entity count.
  • Minimum wage rates in New York also will increase on December 31st of 2017, 2018, 2019, and 2020.

Consult with employment counsel if you have any questions about the applicable minimum wage rate or other wage issues.