CSI HR: The Case of Vanishing Overtime (Construction Wage and Hour Compliance)

construction business HR compliance
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Liz Strikwerda

Content strategist and corporate blogger (2000+ posts). Her work has been featured on G2's Learning Hub, Human Resources Today, Better Buys and over 500 business websites. She plays bluegrass mandolin and enjoys sailing her catamaran and hiking in the red rock wilderness of southern Utah. Connect with me on LinkedIn

Construction Wage and Hour Compliance

Let’s venture into the dark side of public building contracts for this chilling case of construction wage and hour compliance.

Warning: The following account contains graphic descriptions of Human Resources violations. Reader discretion is advised.

The Suspect

The suspect is Express Electrical & HVAC, a 250-employee firm. The company does work under government contracts and private sector commercial projects.

Crime Scene: Construction Sites Throughout the Tri-State Area

After an electrician employed by Express Electrical & HVAC registered a complaint with the Department of Labor Wage and Hour division, the DOL opened an investigation into the firm’s payroll practices.

Allegation #1: Employer Withheld Overtime Pay

Government construction contracts are covered by the Davis-Bacon and Related Acts (DBRA). Some are also subject to the Fair Labor Standards Act (FLSA).

Express Electrical & HVAC was accused of failing to compensate employees for overtime on a government contract under the Davis-Bacon Act. The failure to pay overtime violated the Contract Work Hours and Safety Standards Act (CWHSSA) as well as the FLSA.

The employer was also accused of withholding overtime pay for several employees who were working on commercial jobs. Unfortunately, this is one of the most common construction compliance violations.

Allegation #2: Employer Failed to Maintain Records

The employee alleged that Express Electrical & HVAC failed to maintain records of timecards, shifts, and wages. The employer was accused of ongoing illegal conduct that spanned many months and involved hundreds of employees.

Verdict: Employer Fined $32,640

The court found Express Electrical & HVAC guilty of the allegations and fined the company $32,640. The judgment covered back wages, overtime, and fringe benefits for 36 employees.

How Can Construction Contractors Protect Themselves From HR Violations?

The first step is to learn and commit to following all applicable employment laws. Employers operating in good faith can also use capable time and labor software to manage complex wage and hour compliance. For small to mid-size construction employers, WorkforceHub is the ideal solution.

WorkforceHub Has Your Back

WorkforceHub includes Timekeeping, Scheduling, Hiring, PTO Management, Onboarding, Analytics and Reporting, and HR management.

Construction firms use employees, independent contractors, and seasonal labor. Plus temps, and H2-B Visa workers. This makes payroll fairly complicated. If you employ union workers, you are subject to union wage and hour agreements as well.

Accurate employee time collection and tracking is the foundation of payroll compliance. With WorkforceHub, your employees can clock in/out with a hardware clock, online portal or mobile app. This allows you to track work hours in real time for workers – regardless of their location. WorkforceHub creates virtual timecards that automatically tally work time as employees punch in and out.

In addition to shift punches, it tracks job codes, meals, breaks, overtime, sick leave, vacation, skills certifications and employee classifications.

Overtime threshold alerts, missed punch notifications and certification expiration reminders help frontline managers prevent compliance violations. Daily time and labor reports also help companies optimize labor for improved bidding and project management.

Workplace Investigations and Wage and Hour Recordkeeping

It’s important to understand payroll recordkeeping laws. When an employee brings an action, courts usually rule in their favor if there are insufficient records. In this case, the DOL found the employer to be in violation of wage and hour laws. However, there are many situations where a compliant employer is fined simply for failing to keep proper records.

Payroll Information Employers Must Keep

In addition to personal information, employers must keep records of the following payroll data:

  • Time and day of the week when employee’s workweek begins
  • The number of hours worked each day
  • Total hours worked each workweek
  • The basis on which employee’s wages are paid (hourly, weekly, piecework, etc.)
  • Regular hourly pay rate
  • Total daily or weekly straight-time earnings
  • Total overtime earnings for the workweek
  • All additions to or deductions from the employee’s wages
  • Total wages paid each pay period
  • Date of payment and the pay period covered by the payment

Required to Keep For 3 Years:

  • Payroll records
  • Collective bargaining agreements
  • Sales records
  • Purchase records

Required to Keep for 2 Years:

  • Timecards and piece work tickets
  • Wage rate tables
  • Work and time schedules
  • Records of additions to or deductions from wages

Note that these records apply to employees and seasonal laborers. There are similar requirements for independent contractors (1099) employed by the company.

Construction Companies Live or Die by Scheduling

We’ve discussed how lax labor management can put construction employers at risk. It can also threaten the very survival of the company. WorkforceHub is both a compliance and revenue tool. One mismanaged project can bankrupt a small company – and employee scheduling is a critical factor when there are small margins. WorkforceHub integrates employee punches and timecards with the scheduler. This allows schedule builders to plan shifts with all pertinent information at their fingertips.

How To Kill Profitability

Without a time and attendance app:

  • Making work crew schedules is tedious and time-consuming
  • Shift changes require many phone calls and texts
  • It’s difficult to accommodate employee schedule preferences (which can drive them to your competitor)
  • Project managers can’t make schedule changes easily

Keep Your Construction Company Alive and Breathing

Small contractors need smart labor management to grow. For companies with multiple job sites, it’s a must-have. WorkforceHub allows you to:

  • Create multi-crew and location schedules with high-level detail
  • Minimize overstaffing and unplanned overtime
  • Analyze worker allocation for better bidding
  • Prevent schedule confusion
  • Accommodate worker schedule preferences

Create shift staffing templates in WorkforceHub to build schedules for each site. Drag and drop employees into shifts. With auto emails and texts, you can connect with your crew right from the scheduling screen.

With the WorkforceHub mobile app, your employees can:

  • Clock in from the job site with a mobile device
  • See their schedule as soon as it’s available
  • Approve timecards online
  • Request PTO and check accrual balances without calling HR
  • Pick up extra shifts

Mobile time tracking creates accountability for everyone. Subcontractors are able to punch in and punch out from any location. There are no more excuses for missing timecards or missed punches. Centralized records create transparency. This allows employees, managers, and HR staff to correct problems before a violation is committed. (Or a complaint is filed!)

Do Your Employees Keep Records Better Than You Do?

Did you know that the Department of Labor has a time tracking app that construction employee can download? It makes it easy for them to track their hours and calculate their wages. Are you still using manual timekeeping systems and spreadsheet scheduling? You might not be tracking as accurately as an employee with an app provided by the agency that enforces the laws.

Visit WorkforceHub to schedule a demo.

Note: The preceding story is true. However, names, locations, and other identifying details have been changed to protect the privacy of the people involved.

Updated October 18, 2022. Originally published March 13, 2019.

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