Where is my money! Pursuing a wage claim on your own is a good first step

I receive a few calls or emails  a week from laborers looking to recover their wages. It’s a very sad story most of the time; almost always a contractor tried to improperly “contract” with a laborer to avoid paying payroll taxes and then refused to pay timely. But you might not always have to pick up the phone to talk with legal counsel. Here are a few tips for pursuing collection on your own!

Wage claims stem from a number of different circumstances. Here are a few of the most popular:

• Employee v. Contractor: Contractors love to avoid payroll taxes when they can. If they can, they also avoid paying overtime, workers compensation, holidays, etc. The problem is that it’s very difficult to prevent the state from classifying your workers as your employees. Laborers working without a construction registration are probably employees, and have a richer claim with regard to compensation. You can even look up which employers have violated the wage laws in the past by following this link.

• Prevailing Wage: Often Contractors fail to pay their workers a prevailing wage set by the state. If they do pay a prevailing wage, they might still pay the wrong one (wrongly classify the worker) and so they might still be on the hook for a claim.

• Benefits Claims: Some laborers might be due specific benefits (time off, holidays, etc.) that have not been paid. Benefits are scarcely the sole reason why a laborer will raise a claim (unless they are denied something big like PTO for pregnancy), but do come up from time to time.

Each of these disputes deserves immediate attention. If you have the means to contact an attorney and discuss, you should. But many will simply want to give it a go by themselves, before reaching out to an attorney. Well, more power to you, and often this is the recommendation you will get from a consulting attorney. Here are some tips:

• Making a Wage Claim Through L&I –    If you believe that you are a bonafide employee, because you fail to meet the requirements of an independent contractor (see this post), then you are probably entitled to Wage & Hour Act claims. This means that you might be due overtime and that you are entitled to payment within 30 days of completing work. The Department of Labor & Industries has an internal investigation unit that will prosecute your wage claims. They will contact the employer, investigate the claim, and even issue a citation for payment of wages if need be. L&I has some limitations, but generally can go after your wages without having to call an attorney. The claim tool is actually called a “Workplace Rights Complaint” and you can find it by following this link.

• Making a Prevailing Wage Claim Through L&I – If you believe that you are not being paid the correct wage on a public works project, then you can file a claim using a simple form provided by L&I. As opposed to a general “Workplace Rights” claim, a prevailing wage claim acts as a lien against the contractor’s retainage and can be paid directly from amounts due to the contractor. Prevailing wage claims are often remedied through this simple process.

• Filing a Lien For Wages - If you are owed money for labor performed on a project, then you are entitled to file a lien to collect your wages. A lien is a secured right against a piece of property, that can entitle you to collect your wages against amounts owed to the contractor. Wage claimants are not required to provide a lien notice, but must file their claim against the property within 90 days of their last day of work on the project. Follow these instructions for filing your own lien.

These simple tools can help get you paid before you have to turn to a lawyer. If these tools fail you, and you are forced to turn to counsel, an attorney can help you enforce your claim with a suit against the contractor and its contractor’s bond. The bond helps provide additional security (up to its value – generally $12,000) for payment of your wages.
 
Finally, be wary of limitation periods. You have limited time to file your wage claim. A good rule of thumb is to prepare to file a lawsuit within one (1) year of your last day of work. You will want to be sure an leave yourself plenty of time to talk with an attorney so that you can get your wage claim filed in court, if you are unsuccessful getting paid using the above techniques.

 
Hey contractors!  Please be aware of these tools and the rules with regard to employees. All contractors should be aware of whether their workers might qualify as an employee, and be entitled to further benefits. 

Email updates from Builders Counsel - Happening.

I have been peppered with a mass of responses to the post that I published a few weeks back about safety concerns on LEED projects. It’s been a heck of a conversation. More to come on that next week, but for now some changes to the site.

Those of you that have messaged me about adding a “subscribe by email” option – I have finally done it. Look below in the left sidebar for a simple email entry application. Add your email and you will get updates every time a new post goes up.

You can also choose to limit your subscription to specific categories. So, if you are a LEED designer in Michigan, and you don’t care much for the Washington construction law bits, you can limit the subscription to “Green Building.”

I also plan to revisit the LEED safety debate next week. My tiny little article went through a few national newsletters and reached legal and construction teams around the country. Many have weighed in, so I thought I would dig deeper and expound on the article.

I have contacted the professor that oversaw the study to get some ideas about the strengths and weaknesses of the study. While it appears that the percentage risk values are projected (not purely empirical), it was not done by student and professors – it was done by builders and risk assessors that have unquestionable project experience. More on this next week.

Thanks again to all of you who have commented – even those of you who had negative feelings. I appreciate the dialogue.

LEED 2012 is headed to commenting for the third time!

Just a quick drop in to let you all know that the latest and greatest from the USGBC, LEED 2012, will be opening for the third round of comments in two weeks. This is likely the last go-round for commenters before the new rating system goes to the ballot in June 2012.

If you know little about LEED 2012, check out my prior post on the current draft by following this link. Nothing is set in stone, yet. This next round of comments is sure to focus on post-construction performance and recertification, items that can significantly alter the final version

The comment period ends after 20 days. The final version will go to ballot in June and should be implemented by November 2012.

Modular construction includes the avante garde (above) all the way down to the most typical commercial buildings

We understand that the rising trend of modular construction can be a great choice for both temporary and permanent building solutions, as well as an environmentally-responsible choice. But what’s the difference? Why not simply build on-site like we always have? Well, the answer is simpler than you’d think.

Consider for a moment the timeline of constructing a traditional commercial building. It is common knowledge that financing begins on the day you break ground, and the time between breaking ground on-site and finishing the foundation can be anywhere upwards of six months to a year, or longer. Meanwhile, architects, contractors, and builders patiently wait to begin nailing the first 2×4. Six months or so goes by, you finally have your foundation finished and you’re then ready to start building. You are half way through the construction process with a dumpster piled high with scrap materials and packaging and construction vehicles pumping out exhaust around the site when Mother Nature decides to dump 28 straight days of rain on your project. This weather not only further delays construction (and revenue of the new business), but the inclement weather can weaken the parts of the building that have already been constructed, all resulting in structural integrity problems down the line. Eventually the rain clears up, builders finish their work and your building finally opens for business… 13 months after breaking ground.

Now consider the way modular construction works. Using the same high quality construction materials, the units that make up your building are assembled in a protected factory setting while construction professionals on-site break ground and lay the foundation. Now, assuming grading and creating the foundation takes just as long (about 6 months), your project is already well underway offsite. With the benefit of efficiency by way of repeatable design and consistent production, the creation of your modular units wastes far less time than traditional construction, and produces far less material waste. Built to ensure strength and durability during the transportation and assembly process, these units are loaded onto flatbed trucks and delivered to the job site.  The day the foundation is finished, the units of your building are on-site and ready for assembly. Realistically, within just a few days, a large commercial building can be seamlessly assembled, complete with full wiring and plumbing! Both interior and exterior design finishes are added, landscaping is applied, and your new building is ready to open business (and for earning revenue) all within a few short months, and looking nothing like a rectangle. Meanwhile, the traditional construction project would be just getting underway, waiting for the storm of the century to pass.

You can see that modular construction is the smarter choice. Whether considering modular to build a commercial building or residence, the overall process for modular construction saves time, money, and is an extremely, low-impact way to build while protecting the environment.

A new member to the family.

For the fifth time (i think?), I am a guest writer on Chris Hill‘s Construction Law Musings. Today’s post discusses my disdain for poorly managed construction files and documents, and some quick tips for cleaning it up and saving yourself some money. Check it out on Musings by following this link.

If you have yet to hear my chatter on Twitter, I recently founded ClaimKit with friend and green building law colleague, Chris Cheatham. ClaimKit provides a turnkey solution to disastrous construction files for sureties, insurers and lawyers who have to pick up the pieces in the face of a claim or dispute. The ClaimKit site is in development, but our blog is already talking about how to improve your file.

Be sure to check out the rest of Chris’ blog while you are visiting Musings. Chris provides excellent construction resources for contractors, suppliers, design professionals, and attorneys. Musings is consistently at the top of the construction law blog ratings. I have provided four prior guest posts on the UCC rights of contractors, dispute resolution provisions for your construction contract, construction documentation solutions and green building certification procedures.

Thanks to good friend Chris Hill for having me back on Musings!

Just how much safer is this flat roof v. your new living roof? A new study tells you

***UPDATE 2/16/12: For those of you that are interested in reading the whole study – hint hint, law firms – you can obtain a copy from the ASCE Library by following this link.***

A new study says that some LEED credits might carry an additional risk of worker injury of up to 41%. The study, published by the Civil, Environmental and Architectural Engineering Department at the University of Colorado Boulder, used empirical data to support their finding that a number of LEED credit carry substantial risks. The results might be a little frightening.

The UCB professor behind the study says that his interest was piqued when he saw statistics that suggest worker injury occurs up to 50% more on LEED projects. Instead of making a case study out of this interesting statistic, the professor elected to craft an empirical examination, using data collected from a wide sample of LEED projects. The study looks at each credit in the LEED system, comparing it to traditional construction.  For example – sustainable( living) roofing v. traditional (fabric sealed) roofing.

The findings surprised me:

With the information gathered, Hallowell and his team of researchers were able to identify 14 LEED credentials that may create heightened risks to construction workers. Most notable risks include a perceived 41% higher risk associated with installing sustainable roofing, a perceived 37% increase in risk from installing PV panels for on-site renewable energy, a perceived 36% additional risk of cuts, abrasions and lacerations from construction waste management and perceived 32% heightened risk of falls from installing skylights and atriums to meet the daylight and views credit.

The first thing that I must note is that the methodology behind this study appears to be a strong one. A well-crafted, well-sampled empirical study is about as good as you can get. Apparently, the USGBC agrees. Its spokesman, whose statement is provided in the article, agreed that the findings were troubling and that they were being taken under advisement by the USGBC.

The really great part about this study was that the researchers didn’t just track down a problem – they made suggested solutions. Read through the article for suggestions on how to reduce chemical burns, reduce falls through prefabrication, and increase accountability through monitoring. In short, it’s a commendable list of reasonable recommendations that both owners and builders might want to consider requiring in specifications.

What does this mean for liability and builder risk? Perhaps a lot.

This information is out there now, and that means increased accountability for injury. Contractors should do their very best to consider implementing improvements in their building process. It might also be time to update your safety manual to ensure that your workers know that you intend to enforce these changes. Finally, train your project managers to actually enforce them.

Owners may want to ensure that insurance provides coverage for these increased risks. It’s possible that insurers will look to studies like these to adjust underwriting guidelines, so check with your agent and read your policy. Owners may also want to utilize their contract to ensure that contractors comply with safety guidelines, or risk breach of contract.

Contact your construction attorney if you want more specific guidelines on protecting yourself against these risks.

Use L&I's website to get info on your contractor's bond

I frequently am contacted by potential clients – and existing clients – to perform simple legal tasks. While I say “legal tasks” perhaps I really mean tasks that may potentially require legal investigation if you don’t know how to get the information yourself. So, I decided to start a column that provides short and sweet tips on how to go about obtaining some of the information that you might regularly pay a lawyer to research.

Today’s Lesson: Contractor Bonds

One of the most common questions that I get is whether a contractor’s bond is available for a claim. In Washington, contractors are required to maintain a statutory bond in the amount of $6,000 (specialty contractors) or $12,000 (general contractors). If you want to know more about these bonds, check out this prior post on Builders Counsel.

The bond’s value is almost always overwhelmed by the value of a claim. So if someone else has already filed a claim, you might want to reconsider your legal strategy (if there won’t be enough left to make it worth your while) or hurry up and file (if there will be enough, but the bond might payout soon).

The Washington Department of Labor & Industries has made it easy for any consumer, contractor or supplier to determine whether a bond has an active claim. Go to Hiring a Contractor at their website and search for the contractor by name. Sometimes you will have to hunt for the contractor because it has used a different name for its registration. Be sure to check owner names and associated licenses, which are about halfway down the page on the contractor profile.

In the middle of the page, you will see the contractor’s bond information. Be sure to confirm whether the bond is still active, or has been cancelled. If it has been cancelled, check to see whether it has been “Impaired.” If it has been, then the bond has likely already been paid out to another claimant.

Next, you should check out the “Summons/Complaint” information section at the bottom of the page. What you should hope to see is a blank area – meaning the contractor is not currently fending off other claims. If you see other actions, look at the status and determine if it is “Open” (meaning an active claim) or “Dismissed” (meaning an old claim of no concern). Also, look at the “Paid” section to see if the bond already paid the claim.

The best scenario is for you to find that the bond is active and that there are no active claims filed against the contractor. If you still have questions, then its time to call your construction attorney.

***DISCLAIMER: In addition to this site’s normal disclaimer, I want to remind all readers that the Builders Counsel is not your attorney and you should always seek legal counsel if you are concerned about your rights and claims. This column is not intended to displace your attorney, but provide you with information about helpful tools that can help get you information about your legal rights.***

Don't expect too much protection from your public building official.

How many property owners are more than happy taking the building inspector’s word to ensure that their construction project is safe and code compliant? I bet its a lot. Well, if you thought you could hold your inspector to his or her evaluation, think again.

A recent case explored the Washington Public Duty Doctrine at length, reinforcing the level of immunity to which building officials have become accustomed. Pierce v. Yakima County, Divison III No. 29568–1–III,  involves a lawsuit by a homeowner against a building official and agency. The homeowner was injured and his home destroyed when faulty and noncomplying construction caused an explosion. Yakima County inspectors had approved the work.

The General Rule: The Public Duty Doctrine

In determining if a duty of care exists when a claim is asserted against the state, Washington courts consider the “public duty doctrine,” which requires a showing that “the duty breached was owed to the injured person as an individual and was not merely the breach of an obligation owed to the public in general.” In essence, the court opined that the inspector has to take on a more personal relationship with the property owner, ensuring something more than what it is required to do by law.

According to the court, the public duty doctrine is a “focusing tool” used to determine whether the state owed a specific duty to a particular individual, the breach of which is actionable, or merely a duty to the “nebulous public,” the breach of which is not actionable.

The Four Areas of Exception

The are only four circumstances, referred to as “exceptions,” where a claimant might be able to maintain an action despite the Public Duty Doctrine:

(1) where there is a “legislative intent” to impose such a duty,

(2) where the state is guilty of a “failure to enforce” a statutory duty,

(3) where the government has engaged in “volunteer rescue” efforts, and

(4) where a “special relationship” exists between the plaintiff and the state.

Donohoe v. State, 135 Wn.App. 824, 834, 142 P.3d 654 (2006)

The two prongs that most often come into dispute are the “failure to enforce” and “special relationship” ones. These two offer opportunities to injured owner where either the building inspector failed to abide by a mandatory enforcement measure (failure to enforce) or gave specific assurances to an injured individual that were reasonable relied upon.

Failure to Enforce

In Pierce, the court determined that the claimant could not present a viable case for the “failure to enforce” exception.  The specific “enforcement sections of the applicable code do not create a mandatory duty to take specific action.”  The statute that the claimant relied upon “does not provide a specific directive to the governmental employee as to what should be done” and merely “vests discretion in the inspector in this situation.”

In this specific example, the inspector was given authority to demand disconnection of a non-compliant system. Unfortunately, the language of the statute was clear that this was an option and not a mandatory action. There are many occasions, however, where the codes do require that an inspector (any inspector for that matter) take an affirmative action to prevent harm. In those case, an inspector might be considered liable.

Special Relationship

The “special relationship” exception imposes a duty of care upon the state where: (1) a direct contact between a public official and the plaintiff occurs, (2) the public official provides express assurances, which (3) give rise to justifiable reliance on the part of the plaintiff.  The court defined an “express assurance” as one where “an individual makes a direct inquiry and the government clearly sets forth incorrect information in response.” If that information is reasonably relied upon, a claim may persist.

Again, in this example, the court did not find such an interaction. But, its clear that this is the best opportunity for a building owner to build an action against a building official. Owners that directly engage their building officials in conversations about the work may be able to extract express assurances about the work.

The moral of the story is that the law is against all owners trying to recover against a building inspector. While there are a few exceptions, we have not seen a good sample of cases establish liability under them.

The best thing that a building owner can do is ensure that its contract covers code compliance, and holds the builder responsible for damages caused by their work, regardless of whether it is approved by building officials. Another option for owners is to consider using a private third-party building inspector.

Read and revise that contract before getting started.

Subcontractors: Do you really read your contracts? Its ok, if you say no. Probably 50% (or more) of the contracts that I review after a dispute arises were never negotiated by the subcontractor. Heck, on most occasions, the subcontractor never read past their name on the front page. Remember subcontractors – you can negotiate these contracts. Here are some things to consider.

Both public and private contracting processes can be long and complicated. Because of that, many subcontractors find that after managing the bidding process, negotiating alternative bids, locking down labor and materials, and other painful steps, you develop a “just get it signed” mentality.

Standard form general contractor agreements are heavily weighted to favor the owner.  I find it disheartening that almost every contract that you sign will have some incredibly unfair and most likely unenforceable provisions. But you should understand that the terms in your contract can be changed (for the most part) and you should consult with your counsel to ensure that you are getting a fair deal.

Some key issues of concern for me typically appear in the indemnification and payment sections of your contract. Look for these red flag clauses:

• Unilateral Indemnification -  Indemnification should not be one sided. Each party should offer similar indemnification for damaging items in their control. Almost always this very fair proposed change will be accepted.

• 3rd Party Indemnification -  Take a look at that indemnification clause closely. Does it require you to step up and indemnify the prime contractor, or even the owner, in cases of negligence or damages, when someone else is found to be also be negligent? That clause needs to be tightened to ensure that you only have an obligation if you cause the problem.

• Payment Conditions -   Thanks to the Prompt Payment Act, contractors on public works are typically ensured that they get paid in a timely fashion. But, there is no similar provision for private works, and even on public jobs that law has not stopped some contractors from trying to tie hefty obligations to payment. Look at your contract to ensure that burdensome documentation obligations, inspections and other delays are not making it costly to get paid. You should be certain that there is a point where payment would have to made, and that the contractor cannot simply have free reign to make withholding decisions.

• Claim Limitations – One of the most important things that I be sure to point out is a claim limitation period or procedure. Contractors want to reduce their exposure to potential claims by anybody (and rightfully so), and Washington will enforce limited periods of time to raise a claim. Look out for provisions that require delivering notice to a contractor of any claim within 180,90 or even 30 days!

talking about a touchy subject

Here is a great chance to get your fill of green building law – right in the Seattle area. The Pacific NW chapter will be holding their Annual Seminar on March 16, 2012 in Bellevue, Washington. I will be one of the speakers, covering a section on green building risk management.

The Construction Management Association of America is a national organization that educates construction managers on the role they play in the construction project. The Pacific NW Chapter’s Annual Seminar will this year be entitled The Construction Manager’s Role on Sustainable Infrastructure. I cannot think of a more timely topic, in a time where third-party certified buildings are routine and new green building codes are awaiting implementation.

Attorney Meghan Douris (of Seattle’s Oles Morrison)and I will be co-presenting the section entitled Risk – A Lawyers View on Sustainable Projects. Our presentation will cover the legal landscape of the green building project, including a conversation of the specific inherent risks and how best to manage them.

The seminar will be held on March 16, 2012 from 8:00-5:00 PM at the Bellevue Coast Hotel in Bellevue, Washington. Registration for the event can be accessed by visiting this link.

Click here to view the entire agenda. I hope to see you there!