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WWW.UNITEDCONTRACTORS.ORG MARCH 2012ISSUE 3/VOLUME 218
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United Contractors/EUCA Digger Magazine (ISSN: 1086-5004) is pub-lished monthly, except December, by the Engineering & Utility Contractors Association, dba United Contractors, 17 Crow Canyon Court, Suite 100, San Ramon, CA 94583. Editorial comments, letters, and article submissions are welcomed and encouraged. Correspondence should be directed to the United Contractors offi ce at the above address, by phone at (925) 855-7900, by e-mail at [email protected] or by fax at (925) 855-7909. Reproduction of editorial material in this issue is permitted if accompanied by proper source credit. Postmaster: Send address changes to: United Contractors Magazine, 17 Crow Canyon Court, Suite 100, San Ramon, CA 94583. © 2012 Published in the U.S.A.
2012 UNITED CONTRACTORS BOARD OFFICERS
President ......................................................Rob Layne
Vice President/President-Elect ..............Michael Ghilotti
Secretary/Treasurer ..............................Michael Ghilotti
Secretary/Treasurer-Elect.......................Kevin Albanese
contentsUNITED CONTRACTORS BOARD OF DIRECTORSKevin Albanese, Joseph J. Albanese, Inc.; Gary Andrews, Associated Constructors, Inc. Jami Brady, BakerCorp; Jerry Condon, Condon-Johnson & Associates, Inc.; Bruce Daseking, McGuire and Hester; Jack Estill, Appian Engineering, Inc.; Brian Gates, Top Grade Construction, Inc.; Rich Gates, DeSilva Gates Construction; Michael Ghilotti, Ghilotti Bros., Inc.; Brett Kincaid, O’Grady Paving, Inc.; Bret Lawrence, Woodruff-Sawyer & Co.; Rob Layne, O.C. Jones & Sons, Inc.; Robert Purdy, RGW Construction, Inc.; Bob Rahebi, Redgwick Construction Company
UNITED CONTRACTORS COMMITTEE CHAIRSAssociates: Jami Brady (Associate Director), BakerCorp; Bret Lawrence (Associate Director-Elect), Woodruff-Sawyer & Co. | Caltrans: Michael Ghilotti (Chairman), Ghilotti Bros., Inc. | Government Relations: Chris Young (Chairman), D.W. Young Construction Co., Inc. | Safety & Insurance: Rick Seifert (Chairman), Preston Pipelines, Inc. and Level 10 Construction | Scholarship: Janice Lajoie (Chair), GE Capital
UNITED CONTRACTORS STAFFMark Breslin, Chief Executive Offi cer; Leslie Lord, Deputy Director; Kelly Montes, Executive Assistant; Randy Ruby, Director of Labor Relations; Ruby Varnadore, Labor & Member Services Representative; Galina Velikovich, Labor Relations Advocate; Steve Geney, Labor Negotiations Consultant; Shelbie Tieman, Director of Finance & Administration; Terese Pollock, Finance Assistant; Jami Moore, Member Services Coordinator; Stacy Anderson, Director Communications, Events & Education; Denise Ramirez, Online Services Manager; Joan O’Brien, Education Manager; Jenn Rogers, Event Manager; Michelle Vejby, Publications Manager; Emily Cohen, Director of Government Relations; Mallori Spilker, Government Relations Assistant; Kevin Pedrotti, Legislative Advocate; Tony Dorsa, CARB Consultant
March 2012 5
More Inside:
www.unitedcontractors.org
6
24 NEXT UP
26 WE ARE EUCA
28 SAFETY CORNER
30 LAST CALL
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UP Front Transformational Change: A Positive Way ForwardBy Mark Breslin, CEO
LABORFamily Medical Leave Act (FMLA) FAQsBy United Contractors Labor & Member Services Team
INSIDE the CapitolThe Final Countdown: Our Fight forHighway Reauthorization Funding By Mallori Spilker, United Contractors Government Relations
RED TAPEHauling at the Cross RoadsBy Robert Fried, and Thomas Kovacich, Atkinson, Andelson, Loya, Ruud & Romo
MARCH 2012ISSUE 3, VOLUME 218
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14SPECIAL FEATURESPECIAL FEATURE
HR&EMPLOYEEISSUES
FACESUnited Contractors celebrates Leadershipat Membership L.I.V.E. where we were honored to have Senator Wright, recipient of our We Dig California Award, install our 2012 Board Members.
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WWW.UNITEDCONTRACTORS.ORG MARCH 2012ISSUE 3/VOLUME 218
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ith EUCA now becoming United Contractors, I certainly have been thinking a lot about how to best
enact positive change. Organizations and leaders today really must be proactive in both creating and meeting change. The slogan “Change or Die” has probably never been a more true statement. And for this month’s issue— focused on Human Resources and talent management—I have given some thought as to how a leader can enact that change within their team and throughout their organizations.
The place to start is by asking yourself “What motivates people to excel and how do we help them do it?” This question isn’t solely about creating a high performance workforce; it’s also about how to compete at a level above and beyond your peers and competitors. The key is to introduce consistent positive change. The expectation is a transformed employee (or team) and organization. The result is increased loyalty, increased productivity and increased profi t. And perhaps most importantly, deep loyalty and genuine buy-in. Is this how you do business? If you were quick to answer “yes,” consider these facts:
• More than 60% of the American workforce reports that they are not happy at their current jobs.• More than 40% of people surveyed indicate that they could increase their effi ciency by at least 25% at their current positions, but don’t.• Money is not ranked anywhere as the top motivator of what drives high performance efforts or organizations.
If you are a leader, there are two essential ways to view or structure an organization: transactional or transformational. An organization that is heavy on transactional is one where there is an exchange of time and talent for opportunity. A company focused on transaction is driven by recognition of mutual economic value. In construction, there is a heavy emphasis on transactional. Work hard, get paid. Create results, get a bonus. But important as it is, money is not the most important thing that an employee might want or need to perform at the highest level.
Transformational Change:A Positive Way Forward
ic
W Another way to view and structure the workplace is transformational. This concept is built around the idea that work is a place of constant personal and professional transformation, and that the employer is completely dedicated to the ongoing development of the potential of their employees. The employee in turn knows it, feels it and responds to it. A transformational workplace is where you will fi nd a heavy emphasis on training, coaching, mentoring, assessment, teambuilding, collaboration, idea generation, recognition and best practices. This type of approach is not some fl aky-feel-good model. It boasts a very real advantage: Consider this:
• Firms that invest $1,500 per employee in training compared with those that spend $125 experience an average of 24 percent higher gross profi t margins and 218 percent higher revenue per employee
(Laurie J. Bassi, “Do Firms’ Investments in Education and Training Pay Off?” American Society for Training and Development, 2000).• Career development is the No. 1 factor in employee retention, according to a survey of 6,400 employees conducted by consultants Sharon Jordan-Evans and Beverly Kaye.• A Louis Harris and Associates poll reports that among employees with poor training opportunities, 41 percent planned to leave within a year, whereas of those who considered their company’s training opportunities to be excellent, only 12 percent planned to leave.
What does this mean? It means that top talent is going to migrate to environments that work to positively transform the individual. One of the most profound changes occurring in today’s workplace is the entry of millions of young people in their 20’s and 30’s. These young people are the foundation of tomorrow’s industry. Make no mistake—Generation Y is absolutely expecting the workplace to refl ect an opportunity for transformation and personal development. They are unwilling to “settle” for transactional. They want to be engaged in different ways. They want to work for a company who will invest in them. Every study shows that development of their own potential is a huge part of their choice of employer and an indicator of their retention over time.
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The best talent is going to migrate to organizations that focus on transformational values as an important way of thinking and doing business. The forward-thinking employer needs to consider this carefully—as do our partner unions that want to attract top-quality younger members now and into the future.
All of this points to the necessity for key strategies to develop potential and begin to emphasize transformational
As EUCA becomes United Contractors, providing the best in training and development as a transformational tool continues to be our mission. For information on ongoing training and development for project managers, foremen and superintendents, fi eld craft workers, offi ce management personnel, fi nancial professionals and company principals go to www.unitedcontractors.org.
United Contractor Resources
vs. transactional business environments. In construction, there is a heavy emphasis on safety training. It is the single greatest training investment for construction companies. In trying to create the transformational workplace, we need to think about what opportunities lie beyond this. Envision employee-training that focuses on the following areas:
• Leadership• Motivation & Coaching• Effective Communications• Time Management• Project Management• Use of Cutting Edge Technology• Personal and Professional Goal Setting• Financial Management• How to Build Teams & Teamwork
These are just a starting place for any top organization that wants to show its employees that they are worthy of investing in—that they are a valuable asset and not simply a paid-for commodity in a transactional environment. The construction industry generally lags behind the general business enterprises in the U.S. on talent development as a key strategy. Might it be time to add the line item of transformational talent development to both your budget and bottom line?
If you want someone to put their heart and mind into what they do, remember that it is a function of their belief system more than their skills. And when a leader focuses on that as their most important job, they not only transform those that work for them, but they increase the business outcomes for their customers and very often their own bottom-line. ◆
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8 WWW.UNITEDCONTRACTORS.ORG
federal Family Medical Leave Act (FMLA) is the major type of protected leave that most employers are concerned with. California employers also have to contend with the California Family Rights Act
(CFRA), which provides some overlapping protections and must usually be
Family Medical Leave Act (FMLA) FAQs
considered along with FMLA. A comprehensive explanation takes more than a few pages, but here are a few questions we have helped members with that others may fi nd helpful.
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Q: Our union agreements don’t mention FMLA/CFRA. What is required for union employees?
A: Compliance with FMLA/CFRA is based on federal and state law, and this applies to union and non-union employees alike. The only thing that may be different for union employees is how you continue to pay for their health insurance coverage during this type of leave. In most cases, the Trust Funds will require a fl at monthly amount or hours amount to be paid for Health & Welfare while the employee is on FMLA/CFRA leave; contact the appropriate union Trust Fund offi ce for details.
At this point, you are not covered by FMLA/CFRA. Coverage applies to private employers with 50 or more employees (including part-time employees and employees who are out on leave) on their payroll for 20 or more weeks of the current or preceding calendar year. However, you do need to be aware of what could trigger your company being covered by these laws, and you also need to be aware of other types of leave that your company may be subject to (likely or not), such as the new Organ & Bone Marrow Donor Leave.
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At this point, you are not covered byFMLA/CFRA C li t i t
Q: We are a small company with no branch locations and only about 20 total employees. Do we need to worry about FMLA/CFRA?
A:
March 2012 9
No it is not. Paid Family Leave (PFL) is simply part of State Disability Insurance (SDI). It applies to all California employers and provides partial wage employment for employees (up to 6 weeks in a 12-month period) who are caring for an ill/injured family member or bonding with a new child. It does not give the employee any right to take leave (that is up to your company policy), and does not entitle them to job reinstatement or continued health insurance benefi ts from their employer (unless some other law requires it).
Not necessarily. Depending on the reason for the leave, the employee may be entitled to an interactive process to accommodate a disability or may be subject to protections under other laws such as workers’ compensation. Employers should always consult legal counsel before fi nalizing a termination decision that involves an employee who is out on FMLA/CFRA. ◆
No it is not. Paid Family Leave (PFL) is simply part f St t Di bilit I (SDI) It li t ll
Q: An employee has come to us asking for Paid Family Leave since his wife will be having a baby soon. Is that the same as FMLA?
A:
Not necessarily. Depending on the reason for the leave the employee may be entitled to an interactive
Q: Can we automatically terminate an employee who has exhausted her FMLA/CFRA leave and still is unable to return to work?
A:
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INSIDE The
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The Final CountdownOur Fight for Highway Reauthorization Funding
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less than one month left to pass a federal highway reauthorization bill, Congress has made signifi cant progress toward passing legislation
before current funding expires on March 31, 2012...but it’s not over yet. Passing a federal highway reauthorization bill is something that United Contractors has been urging Congress to get done for nearly 29 months. Although the proposals from both Chambers are not fl awless, we are pleased to see forward momentum from Congress, and are determined to remind them not to let “perfection be the enemy of good.”
Here’s the deal: America’s roads and bridges are crumbling, and it is time to focus on rebuilding this country to benefi t everyone- Democrat, Republican, and all in between. Investing in our roads and highway systems is important
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for job creation, our economy and the future of America’s construction industry. That is why Congress must pass a well-funded, multi-year federal surface transportation bill. This should not be a partisan issue — it’s for the benefi t of all Americans.
Both the House and the Senate have taken steps forward with their respective highway funding bills; however, there are signifi cant differences between the two proposals that must be recognized, and eventually, reconciled.
Here is the current breakdown of the bills (as of publication print date):
On the House side (supported by Republicans):
The House Transportation and Infrastructure (T&I) Committee has passed a $260 billion, fi ve-year federal surface transportation program reauthorization bill, H.R. 7, renamed “The American Energy & Infrastructure Jobs Act of 2012.” While the funding levels authorized in the House’s bill are not on par with FY 2010 and FY 2011, the highway investment amounts are signifi cantly higher than what was originally proposed last year—which would have cut federal transportation funding by almost 35%. The bill provides the following funding levels for FY 2012, totaling to $50.7 billion: $39.1 billion for highways; $10.4 billion for transit; and $1.2 billion for safety.
March 2012 11
The methods for funding this bill would come from a general fund and are somewhat controversial. Possible revenue streams include US-based gas and oil drilling and revisions to federal employee pensions, neither of which are very popular with Democrats. The fi ve-year transportation portion of the bill is being considered separately from the energy-funding portion. Action on this bill has been delayed in order to allow changes to be made to remedy potential funding shortfalls needed to carry out the bill, and give more time to review the hundreds of proposed amendments.
On the Senate side (supported mainly by Democrats with some Republican support):
The Senate Environment and Public Works Committee, chaired by California Senator Barbara Boxer, proposed and approved a $107 billion, two-year highway bill, S. 1813, “Moving Ahead for Progress in the 21st Century” (MAP-21). The bill, which has some bipartisan support, provides $84 billion for highways; $21 billion for transit; and $2 billion for safety. Action was taken in the Senate Banking Committee and the Senate Commerce Committee to provide the $12 to $13 billion in funds needed to supplement the Highway Trust Fund. The Senate Finance Committee also approved a $10.5 billion revenue title to support funding levels in the Senate’s two year surface transportation reauthorization bill. The bill now lies in the hands of the full Senate to move forward with debating amendments.
United Contractors applauds both the House and Senate for moving forward on this critical legislation, but now it’s time to get a fi nal bill passed that puts America’s construction industry back to work and keeps America moving. 2012 should be the year of investing in our nation’s infrastructure for the long run.
We need our members of Congress to work together to pass this long-overdue legislation — our industry and economy have waited too long for a long-term highway transportation bill that allows state DOTs to plan and implement long term projects. United Contractors will continue to urge Congress to work together and seize this opportunity to create jobs and bring economic development to all states by
United Contractors — Our Future“For the past 20+ years McGuire and Hester has believed that its Contractors Association was the most forward thinking in the industry and it is why we have invested heavily in the Association through Board and Committee service over the years. We feel that the benefi ts we have received and the relationships we have made far outweigh the time commitments made. The United Contractors branding is just one more example of why we believe our Association best represents our union construction industry. Our Board, our staff, and our membership are second to none. We look forward to another 20 years together.” — Mike Hester, McGuire and Hester
working to advance legislation that improves the nation’s highways, bridges and public transportation programs.
This is the message Congress is getting from United Contractors. But Congress doesn’t want to hear from just us- YOUR individual voices matter. When you get United Contractors call to action to contact your member of Congress and ask them to pass this legislation – don’t wait. Sending a letter only takes two minutes and it makes a huge difference. Remember to visit us at http://capwiz.com/unitedcontractors to take action today. ◆
12 WWW.UNITEDCONTRACTORS.ORG
By Robert Fried, andThomas Kovacich, Atkinson, Andelson,Loya, Ruud & Romo
AB 514 Details:AB 514 amends Section 1720.3 to defi ne the “hauling of refuse” to include the “hauling soil, sand, gravel, rocks, concrete, asphalt, excavation materials, and construction debris.” This is not an exhaustive list, and accordingly the hauling of other, similar materials may be considered to be the hauling of refuse as well.
R E D Hauling at the Cross RoadsTAPE
2011, Governor Brown signed AB 514 a bill that radically expands the prevailing wage requirements on construction materials that are not
considered covered by the Labor code. United Contractors members need to understand the implications of this bill.
Prevailing wage requirements have long included the hauling of refuse from a public works site to an outside disposal facility. Assembly Bill 514, signed by Governor Brown, amends section 1720.3 of the Labor Code by specifying what materials from a work site are included in the defi nition of the “hauling of refuse” for purposes of clarifying if the employee is entitled to be paid the applicable prevailing wage rate. AB 514 was effective January 1, 2012.
Proponents of AB 514 urged that loopholes under existing law rendered Section 1720.3 meaningless because contractors sold refuse hauled from public works sites for a nominal fee, a whole load for $1, for example, and then refused to pay prevailing wages for the hauling of such material contending that such materials were no longer “refuse.” Opponents of the bill, including United Contractors,
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• Employment Law Counseling • Employment Litigation
• Prevailing Wage Compliance • Labor Commissioner Matters
• Wage-Hour Class Action Defense • Trust Funds Litigation
• Arbitrations, EEOC, and NLRB • Employment Contracts
• Union Disputes • Employee Handbooks
• Trade Secrets/Unfair Competition
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SIMPSON, GARRITY, INNES & JACUZZI, P.C.Attorneys At Law
Attorneys Representing Businesses In All Labor and Employment Law Matters
Professional Corporation
Paul V. Simpson and Marc L. Jacuzzi
March 2012 13
argued that AB 514 overcorrects the problem, and unduly expands the prevailing wage requirements on construction materials that are not currently considered covered by Labor Code section 1720.3.
AB 514 includes a limited exception and provides that the “hauling of refuse” shall not include the “hauling of recyclable metals such as copper, steel, and aluminum that have been separated from other materials at the jobsite prior to transportation and that are to be sold at fair market value to a bona fi de purchaser.”
The California DIR, the state agency responsible for determining whether specifi c types of work are covered by the prevailing wage statutes, has repeatedly found in its own public work coverage determinations that off-hauling of soil that was deposited at several landfi lls without charge to the contractor for re-use by the landfi ll as ground cover was not considered “hauling of refuse” under Labor Code section 1720.3. This limited exception in AB 514 does not include soil or other non-metal items, however, and accordingly it may likely be asserted that the hauling of such items from a public work site to an outside disposal facility, even when payment is made for such items or it is used by the disposal facility, for example, using soil as ground cover, will no longer be exempt from the prevailing wage requirements.
AB 514 does not alter the three fundamental requirements for such hauling work to be covered under section 1720.3. Specifi cally, section 1720.3 applies to work involving (1) the hauling of refuse, (2) from a public works site, and (3) to an outside disposal facility. Each of these three requirements must be met in order for the work to be considered a “public work” under section 1720.3 for which the payment of prevailing wages is required. Instead, AB 514 amends the defi nition of “hauling of refuse.”
While 1720.3 will most likely result in an expanded interpretation of what is considered to be covered work when such items are hauled from a public work to an outside disposal facility, the application of prevailing wages to projects bid prior to its effective date remains a matter of concern. In December of 2011, United Contractors submitted a letter to Labor Commissioner Julie Su emphasizing that AB 514 constitutes a change to existing law and long-standing defi nitions of the term “refuse” in past opinions of the DIR. United Contractors view is supported by well established precedent. The California Supreme Court rejected the argument that the revisions to Labor Code section 1720, subdivision (a),
expanding the defi nition of “construction” to include work performed during the project’s design and preconstruction phases refl ects existing law or should be applied retroactively to preexisting contracts1. The Court, as did United Contractors in its letter to the Labor Commissioner, noted that the legislative counsel’s digest plainly stated that the new statute “expand(s) the application of prevailing wage requirement(s).” In this context, United Contractors also pointed out that retroactive application would increase unbudgeted costs to local entities that would increase the burden on construction projects at a very diffi cult time in the construction economy in California.
United Contractors involvement is especially important because in a recent coverage determination2, the DIR applied prevailing wages to the off-haul and disposal of excavated material. The DIR acknowledges the potential impact of the no retroactivity analysis but does not affi rm it, relying instead on the DIR’s view of the responsibilities of the contractors under the project contracts (this decision is subject to appeal in the courts).
United Contractors will continue to keep you updated on any changes regarding this important issue. ◆
This article was jointly prepared by Robert Fried of the Pleasanton offi ce of Atkinson, Andelson, Loya, Ruud & Romo, and Thomas Kovacich of the fi rm’s Cerritos offi ce. For more information, visit www.aalrr.com._________________________________
1 City of Long Beach v. Department of Industrial Relations, 34 Cal.4th 9422 Bay Division Pipelines Reliability Upgrade, Bay Tunnel - Off-haul of Excavated Material - San Francisco Public Utilities Commission/City and County of San Francisco, PW Case 2011-008 (January 17, 2012)
14 WWW.UNITEDCONTRACTORS.ORG
HR&EMPLOYEEISSUES
special feature
is a commonly held belief that there is no downside to using an independent contractor. Or is there? If
you run a company, little could be more appealing than to issue IRS Form 1099s to those performing work for you, and thereby identifying these individuals or groups of individuals as “independent contractors.” Suddenly, with a brief word to your accountant (and possibly a consultant agreement) many costs, liabilities and hassles of an employer would appear to vanish into thin air.
No doubt, the use of an independent contractor to perform services for your company brings with it many benefi ts, including:
The Independent Contractor: When is a
Worker Truly Independent?itIt
1. Independent contractors generally are not subject to withholdings for federal and state taxes or unemployment;2. Independent contractors are not entitled to overtime and, in California, meal and rest periods;3. Identifying individuals as an independent contractor could, in limited circumstances, shield your company from liability for accidents caused by the independent contractor; and 4. Independent contractors have fewer rights to bring wrongful termination or equal opportunity lawsuits than do employees.
In addition to potential benefi ts, however, attaching the “independent contractor” label to those that perform services for you has signifi cant downsides and risks. First, as a practical matter, the company must give up considerable control over how the work is performed by an independent contractor as compared to an employee. As discussed herein below, the key component of such a contractor is that a worker be truly independent.
Second, the misclassifi cation of an individual as an independent contractor could subject you to signifi cant and expensive litigation, fi nes and possibly criminal sanctions should a court or regulatory agency determine that the worker was misclassifi ed as an independent contractor. Specifi cally, a misclassifi cation of an employee as an independent contractor could make your company and you personally responsible for restitution and penalties related to unpaid wages (including violations of laws requiring minimum wages, overtime, and payment for meals and rest periods), violations of tax withholding laws, violation of overtime and minimum wage laws (which can go back up to four years), violations of the duty to provide workers’ compensation coverage, and violations of equal opportunity laws such as Title VII, the Americans with Disabilities Act and the Fair Employment and Housing Act.
Contributed by Joseph C. McGowan, Jr. and Dennis C. Huie, Rogers Joseph O’Donnell
Continued on page 16
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HR&EMPLOYEEISSUES special feature
Given the importance of classifying your workers correctly, companies must know how to tell the difference between an “independent contractor” and an “employee.” Though there is no clearly defi ned line that draws that distinction, below are a few helpful tips to assist a business owner through this
complex analysis and to minimize the risk that your workers will be deemed misclassifi ed. We begin by noting that there is a legal presumption that a person performing services for a company is an employee. It is generally considered the business’ burden to prove the worker was really an independent contractor. How does it do this?
First, the company should ask itself the following questions:1. Are the services being performed by the worker an integral part of the company’s business?2. Does the worker lack the common characteristics of running his/her own business? (e.g., the worker does not have a business license? He or she does not carry their own workers’ compensation insurance? He or she does not have their own workers?)3. Are the workers performing low skill-level work (e.g., the work requires no specialized training, or the worker is not required to have a contractor’s license or other type of license)?4. Is the work they are performing customarily performed by employees in the industry?
A “no” to some or all of these questions is helpful to prove that the worker is not an employee. But again, this is not the fi nal analysis. How does a business further protect against a misclassifi cation?
One of the most powerful tools to protect a worker’s classifi cation as an independent contractor is to have a contract with the worker that clearly defi nes the worker as an independent contractor. That contract classifi cation, however, is not a silver bullet to
The difference between an “independent contractor” and an “employee”
March 2012 17
United Contractors — Our Future“Our Association, 100% union contractor membership, has always been about what is best for the industry, and more specifi cally union construction. With our new name and renewed growth, I look forward to working together with our union business partners in creating better opportunities for union construction. The understanding is simple – more competitive union construction translates to stronger union membership.” — Rob Doud, McGuire and Hesterprevent misclassifi cation. Instead, the contract
must also meet the other requirements that are looked at to determine classifi cation.
The basic rule, found in the Restatement of Agency (Second) § 220, defi nes an independent contractor as someone having the “right to control means and manner of accomplishing results.” Thus, the contract should clearly give the worker the right to control the means and manner in which the work is performed. Other factors that should be addressed in the contract include: • Under what conditions can the company terminate the services of the worker (e.g., is the worker “at will”);• Whether the company will exercise direct supervision over the worker;• Whether the company will provide all of the equipment, tools and supplies to the worker;• Whether the worker is required to have a contractors license or other license; and• Defi ning the method of compensation – if the worker is paid like an employee (hourly basis, salary, or piece rate);
To conclude, the decision about whether to classify workers as independent contractors is one of the more important decisions a company makes about its business, and should not be made without consideration of the benefi ts and potential liabilities. Such decisions must be made with careful planning to be sure that your business has the tools to defend itself should a court or regulatory agency disagree with the company’s classifi cation. ◆
Joseph C. McGowan, Jr. and Dennis C. Huie are shareholders of the San Francisco law fi rm of Rogers Joseph O’Donnell, specializing in construction law, employment law, government contracts and environmental law.
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HR&EMPLOYEEISSUES special feature
Working at a previous employer, I received a call early one Monday morning from the spouse of one of our long-standing employees requesting that I change the mailing address for her husband. I placed her on hold and checked the employee’s fi les for authorized individuals—she was not listed. I politely informed her that I would not be able to make the requested changes to his record. She was extremely upset, and, threatened to have my job due to my uncooperative and ridiculous
This Could Happen To You:Be “HR” Prepared
attitude. Her position? She was his spouse, and it should be automatic that she had authority, for which I should not question.
I promptly went to the owner and fi eld supervisor and told them I was sorry I could not make the changes, and that our employee may be upset...fair warning. The fi eld supervisor was surprised I did not make the changes either, “Come on,” he stated, “it’s the guys’ spouse.”
Later that day, the supervisor came to me with surprising news. The employee in question, and his spouse, had decided to end their relationship over the weekend and she had moved out. She had called to re-route his payroll checks to her new address and our employee was extremely happy that we had this policy in check.
I have made a standing practice—no changes to the employee’s information, even if the changes come from the spouse, unless the employee has authorized the individual in writing. One section of our new hire “Emergency Information” form requires the employee to list those authorized. It clearly explains this includes their spouses, and to immediately notify our offi ce in writing of any changes. This alleviates any hard feelings...and any potential problems in the future. ◆
Contributed by Clarissa S. Bellamy, Accounting/Offi ce Manager,for R.J. Gordon Construction, Inc., www.rjgordonconstruction.com, United Contractors member since 1993.
T R U ESTORYmember
Representing the South Bay and the San Francisco Bay Area in Business Law, Construction Contract Disputes and Collection Matters, Employment Law and Labor Relations, and Estate Planning.CONSTRUCTION LABOR/EMPLOYMENT
Joseph Sweeney Roger [email protected] [email protected]
Dana Corey Kurt Wilson [email protected] [email protected]
BUSINESS ESTATE PLANNING
Brad Bosomworth Stuart [email protected] [email protected]
Certified Specialist Romin Thomson [email protected]
983 University Ave., Suite 104C, Los Gatos, CA 95032
(408) 356-3000 www.smwb.com
March 2012 19
You not only need to be successful in your everyday duties, but you must maintain a working knowledge of the latest legal challenges along with best employment practices. United Contractors strives to provide continuing education courses to help you grow professionally and increase your organizations success. Enroll now and reserve your space in these upcoming Construction Administrative Professional Seminars (CAPS) through our University Program.• Prompt Payment• Construction Contracts• Private to Public: Strategies to Increase Your Revenue Claims Documentation*• FMLA and Other Leaves of Absence• Employee Layoff & Termination• Exempt/Non-Exempt Employee Classifi cation*• Subcontractor Review & Negotiation*• Harassment Prevention Training
Gain New Perspective On Common HR & Other Construction IssuesUnited Contractors Can Help
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Los Angeles, CA 800/821-4478N. LA/Ventura, CA 877/246-4087Orange County, CA 800/772-8004San Brndno/Rvrsd, CA 877/246-4085
HR&EMPLOYEEISSUES
special feature
ach year seems to bring new laws and new regulations that can trip up unwary employers—2012 is no
exception. Here are some of the signifi cant statutory changes that will affect employers this year:
Mandatory Form for All California New Hires: California’s Wage Prevention Theft Act (the “Act”), Labor Code Section 2810.5, requires private employers to give non-exempt employees a customized notice at the time of hire with the following specifi c information:• Rate(s) of pay (including overtime rate, if applicable) and whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise;• Any allowances claimed as part of the minimum wage (e.g., meal or lodging);• Regular payday designated by the employer;• Name of the employer, including any “doing business as” names;
California Labor andEmployment Legislative Changes:
What’s New for 2012?atE
Contributed by Marc L. Jacuzzi, Esq., Simpson, Garrity, Innes & Jacuzzi, P.C.
20 WWW.UNITEDCONTRACTORS.ORG
• Physical address of the employer’s main offi ce or principal place of business, and a mailing address, if different;• Telephone number of the employer;• Name, address, and telephone number of the employer’s workers’ compensation insurance carrier;• “Any other information the Labor Commissioner deems material and necessary.”
Employers do not need to provide the notice to non-exempt employees covered by a collective bargaining agreement that provides premium overtime rates and an hourly wage that is at least 30 per cent more than minimum wage. The notice must be a separate document. If the notice is provided electronically, there must be a system in place permitting employees to print a copy of the notice and acknowledge its receipt. The Labor Commissioner has posted a template
form at: http://www.dir.ca.gov/dlse/Governor_signs_Wage_Theft_Protection_Act_of_2011.html.
If any of the information provided to the employee at hire changes (e.g., rate of pay), employers are required to provide the employee with notice of the changes within seven days by: (1) providing a written amendment to the statement; (2) issuing an entirely new notice; or, (3) via paycheck stub, if the updated information is contained on the paycheck stub.
Penalties for Prevailing Wage Violations Increased: Civil penalties for paying less than prevailing wage and for failing to timely provide certifi ed payroll reports to the Division of Labor Standard Enforcement have increased. The maximum penalty for failure to pay prevailing wage has been raised from $50.00 per day, per worker to $200.00 per day, per worker, and
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March 2012 21
the minimum penalty as been raised from $10.00 per day, per worker to $40.00 per day, per worker. Likewise, the maximum penalty for timely failing to provide certifi ed payroll reports has been increased from $25.00 per worker for each day late to $100.00 per worker for each day late.
Limits On Performing Credit Checks on Employees/Applicants: Under Labor Code Section 1024.5, employers (with the exception of certain fi nancial institutions) are prohibited from running credit checks on job applicants or employees, unless the employee is seeking: (1) a managerial position; (2) a position in the state Department of Justice; (3) a law enforcement position; (4) a position for which the information contained in the report is required by law to be disclosed or obtained; (5) a position that involves regular access, for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment, to information regarding a person’s or persons’ bank or credit card account information, Social Security number, and date of birth; (6) a position where the employee would be a named signatory on the bank or credit card account of the company, authorized to transfer money on behalf of the company, or authorized to enter into fi nancial contracts on behalf of the company; (7) a position that involves access to confi dential or proprietary information or trade secrets; or (8) a position that involves regular access to cash totaling ten thousand dollars ($10,000.00) or more of the company or of a customer during the workday.
Certifi ed Payroll Reports: Effective January 1, 2012, contractors and subcontractors must redact workers’ names, addresses, and Social Security numbers from certifi ed payroll reports made available to the public or any public agency. Non-redacted copies of the certifi ed payroll reports (i.e., showing names, addresses, etc.), however, must be provided during investigations for violations of prevailing wage law.
New Protected Category: California anti-discrimination law has expanded its defi nition of “gender” to include “gender expression,” or a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth. Additionally, employers are required to permit employees to appear or dress consistently with their gender expression.
Apprenticeship Program Oversight: As of January 1, 2012, Labor Code Section 3073.1 was amended to require the Division of
Apprenticeship Standards (“DAS”) to audit apprenticeship programs generally and to audit any new or newly expanded building and construction trades apprenticeship program one year after its creation or expansion. If the DAS discovers that an apprenticeship program has purposely misstated information provided to the DAS, it must immediately conduct an investigation to determine if an audit is required. Further, if the DAS receives two or more meritorious apprenticeship complaints within a 5 year period, or if the annual apprentice completion rate is less than 50% of the average completion rate for the applicable trade, than the DAS must conduct an audit. In addition, Section 3073.1 (as amended) provides for increased oversight of building and construction trade apprenticeship programs in general, including requiring programs to submit semiannual statements listing the number of hours of training received for each apprentice and number of hours remaining for graduation. ◆
To read this full article, which includes additional legislative changes that may be important to you, visit our magazine website at www.unitedcontractors.org/magazine. If your company has questions about any of these changes to the law, contact your employment counsel.
Marc L. Jacuzzi, Esq. and Paul V. Simpson, Esq. are shareholders at Simpson, Garrity, Innes, & Jacuzzi, P.C., a law fi rm specializing in labor and employment law, and a United Contractors member since 1999. Mr. Simpson and Mr. Jacuzzi can be reached at (650) 615-4860.
22 WWW.UNITEDCONTRACTORS.ORG
FACESThe Membership L.I.V.E. Celebration, honoring the 2012 Board of Directors, was particularly meaningful this year as the 2012 Board represents the joining of AECE and EUCA as one association: United Contractors.
Tasked with leading the association into their fi rst year as United Contractors, 2012 President, Rob Layne stated, “I think the success of this event and the high attendance is a testament to the optimism our members feel about the changes and their excitement about the future.”
Guests in attendance enjoyed a martini bar, a variety of specialty cigars, photo booth, and live music entertainment, including an impromptu blues harmonica performance by CEO, Mark Breslin.
March 2012 23
Thank you to our Event Sponsors
Platinum SponsorR & B Company
Gold SponsorsCalifornia Trenchless, Inc.Cement Masons Local 400
Condon-Johnson & Associates, Inc.DeSilva Gates Construction
Farwest Safety, Inc.Ghilotti Bros., Inc.
McGuire and HesterNorthern California Carpenters Regional CouncilNorthern California District Council of Laborers
O.C. Jones & Sons, Inc.RGW Construction, Inc.
Sweeney, Mason, Wilson & Bosomworth
Silver SponsorsMcInerney & Dillon, PC
Midstate Barrier, Inc.Watt, Tieder, Hoffar & Fitzgerald, LLP
Bronze SponsorsCentral Concrete Supply Co., Inc.
Chrisp CompanyEPIC
GALLINA LLPRain for Rent
Woodruff-Sawyer & Co.
2012 Board of Directors
TEXAS HOLD’EM POKER TOURNAMENT
APRIL 26, 2012, 4:30PM
Bridges Golf Club, San Ramon
Don’t miss the Scholarship Fundraiser, a No-Limit Texas Hold’Em Poker Tournament! You don’t have to be a seasoned poker player to join in the fun of this event. Place your bets on our future leaders, and support the
Scholarship Program by registering today.
Registration: $130 per person (includes appetizers, drinks, and chips to start the tournament). For more information,
contact Jenn Rogers, Event Manger, at (925) 362-7309 or [email protected] or visit
www.unitedcontractors.org. Sponsorships available.
up
24 WWW.UNITEDCONTRACTORS.ORG
SCHOLARSHIP APPLICATION DEADLINE APPROACHINGJust one month left to apply to our Annual Scholarship Awards Program. Visit us online and download an application for your chance to help your education fund—$19,500 will be available this year to: United Contractors Member Affi liates (employees, spouses, and dependents), or California Civil Engineering or Construction Management students.
The deadline for applications is Friday, April 20, 2012. For more information, contact Denise Ramirez, 925/362-7308, [email protected].
UPCOMING UNIVERSITY CLASSES:
HIGH PERFORMANCE, HIGH PROFIT FOREMANMarch 14, Wednesday, 6:00pm-8:00pmHoliday Inn, DublinGive your foremen the tools they need to succeed. This program is designed as a strategy session for your foremen.
CONSTRUCTION CONTRACTSMarch 22, Thursday, 8:00am-12:00pmResidence Inn, Marriott, PleasantonBecome familiar with what clauses you should include in your contracts, and more importantly, which clauses to avoid and why. Gain valuable tips on how to modify contract language and the impact those changes may have.
PRIVATE TO PUBLIC STRATEGIES TO INCREASE YOUR REVENUEApril 4, Wednesday, 8:00am-12:00pmResidence Inn, Marriott, PleasantonFrom pre-bid to contract administration to close-out and collecting your money, this course will address the unique requirements associated with Public Works contracts and help you navigate tough government code claim procedures.
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Unite
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United Contractors would like to take this opportunity to recognize and thank the following companies who are celebrating their anniversary of membership with our organization in March:
39 YEARS – 1973Associate Member:San Jose Concrete Pipe Co.Brad Nakaji
31 YEARS – 1981Associate Member:US Concrete Precast GroupGreg Bull
30 YEARS – 1982Associate Member:AON Construction Services GroupJim Untiedt
26 YEARS – 1986Contractor Member:T.D.W. Construction, Inc.Edmundo Allire, Jr.
25 YEARS – 1987Associate Members:ATCO Construction Products, Inc.Tom Tubbs
Marsh Risk & Insurance ServicesBarbie Norton
19 YEARS – 1993Associate Member:CNA Surety CorporationPaul Kitchell
18 YEARS – 1994Contractor Member:Uniacke Construction, Inc.Joseph Uniacke
MARCH MEMBER ANNIVERSARIES
Associate Member:Cresco Equipment RentalsChris Smith
17 YEARS – 1995Associate Member:AWSIDave Cory
15 YEARS – 1997Associate Member:Mechanics BankKeary Sullivan
14 YEARS – 1998Contractor Member:R.E. Serrano, Inc.Ricky Serrano
Associate Member:D.P. Nicoli, Inc.Shay Nanna
13 YEARS – 1999Contractor Member:Central Striping Service, Inc.James Lesniewski
Associate Member:Harris Blade RentalSandy Thomson
11 YEARS – 2001Contractor Member:AEC Construction, Inc.Allen Carnesecca
10 YEARS – 2002Contractor Members:Sukut Construction, Inc.Michael Crawford
CMC Traffi c Control Specialists, Inc. dba CMC ConstructionCrystal Miks
9 YEARS – 2003Contractor Members:Clyde Wheeler Pipeline, Inc.Clyde Wheeler
D.A. Wood Construction, Inc.Dan Wood
Associate Member:Heffernan Insurance BrokersDavid Harris
7 YEARS – 2005Contractor Members:Argonaut ConstructorsMichael Smith, Jr.
AshLin Pacifi c Construction, Inc.Rich Metcalfe
March 2012 27
Associate Member:Atkinson, Andelson, Loya, Ruud & RomoRobert Fried
6 YEARS – 2006Contractor Members:Cal State Constructors, Inc.Don Cabianca
California Track & Engineering, Inc.Karol Fair
5 YEARS – 2007Contractor Member:Tri-Valley ExcavatingMike Garcia
4 YEARS – 2008Contractor Member:Inner City Demolition, Inc.James Campanella
Associate Member:Mabey Bridge & Shore, Inc.Buddy Greene
3 YEARS – 2009Contractor Member:RNR Construction, Inc.Andre Catellier
2 YEARS – 2010Contractor Member:Precision Drilling, Inc.Ty Amundson
Associate Member:GE CapitalJanice Lajoie
1 YEAR – 2011Associate Members:Construction Testing ServicesJulie Thome
Williams Associates EngineeringAlexander Williams
United Contractors — Our Future“United Contractors…..Wow, the name says it all. We stand together for the good of all. I am excited and confi dent of the direction our Association is moving. It has been and is an honor to be part of an association that has vision and gets “in action” to make it happen. It is important for an association to listen to its members’ needs and continually position themselves to remove any roadblocks that may stand in the way for their betterment of the whole while maintaining integrity and accountability. We have to embrace change because that is one thing we can count on. Union Bank is proud to help this organizations’ efforts and we will be one of many, voices, representing the associate members.” — Nikki Affi nito, PCAM, Union Bank
By United Contractors
Safety & Insurance Committee
Looking for something new to increase awareness of worker safety? Or maybe just a new source for additional tailgate topics? The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has released 12 educational videos about potential hazards in the construction industry. The educational videos are easy to understand, short segments and geared towards employers and workers. Most of the videos are two to four minutes in length, and all but one are animated (English and Spanish versions).
The videos show how quickly workers can be injured or killed on the job and are intended to assist those in the industry to identify, reduce, and eliminate construction-related hazards. Visit http://www.osha.gov/dts/vtools/construction.html, andhttp://www.osha.gov/dts/vtools/construction_sp.html. ◆
tors
28 WWW.UNITEDCONTRACTORS.ORG
SAFETY corn
er
New From OSHA:Safety Videos
IS ZERO YOUR FAVORITE NUMBER?
Did you have zero-to-low incident rating in 2011? Think your company is one of the safest in the industry? Apply to our Annual Safety Awards Program, open to all of our contractor members. Safety Awards Applications (for the 2011 year) are now available on our website. Deadline for all submissions is March 30, 2012. The Awards are administered by our Safety & Insurance Committee. For additional information, contact Denise Ramirez, [email protected], 925/362-7308, or visit our website at www.unitedcontractors.org. ◆
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March 2012 29
United Contractors welcomes Rick Seifert as the new Chairman of the Safety & Insurance Committee. Rick has been involved in construction safety, and environmental and regulatory compliance for more than 35 years, including Safety & Environmental Director for Rudolph and Sletten and most recently, Vice President for Safety at Preston Pipelines. He brings a unique perspective to the committee with his experience working for both a large general contractor and a small underground subcontractor.
Rick received his Bachelor of Science degree in Engineering Technology from St. Cloud State University, St. Cloud, MN. He is a Construction Safety Instructor at UC Berkeley. Rick is the Director of Safety for Level 10 Construction in Sunnyvale. His experience at ensuring and executing safety policies and procedures include: • Developing and providing safety, environmental, infectious control and hazardous materials training; • Inspecting the jobsite to promote a safety culture and environmental compliance;• Working with outside legal and regulatory staff if needed; • Providing safety and environmental expertise to subcontractors and customers.
Rick plans to invigorate the committee by collaborating new ideas and goals that will enhance safety and help our members remain viable and profi table. “There is so much talent on this committee that is being underused that would be so rewarding and benefi cial to our members.” Rick would like to re-establish a working relationship with OSHA, increase committee participation, and provide more committee outreach. He hopes to bridge the gap with other organizations to speak on behalf of the industry as a whole to address aggressive regulations to secure our market share in the industry. “It’s easy to make promises, but actions speak louder than words. I understand that trust is earned through action.”
United Contractors Association would like to say a special thank you to Gary Rudy of Duran & Venables, Inc. for his dedication, time, and commitment serving as Chairman of the Safety & Insurance Committee.
For more information or to join the safety committee, contact Joan O’Brien, staff committee liaison, at (925) 362-7303. Meetings take place every third Wednesday of the month at the United Contractors offi ce located in San Ramon. ◆
Safety & Insurance Committee Welcomes New Chairman, Rick Seifert
CALL
34 WWW.EUCA.COM30 WWW.UNITEDCONTRACTORS.ORG
United Contractors — Our Future
“Coming together is a beginning, staying together is progress, and
working together is success.”
United Contractors 2012 Board of Directors: Ready to Take Care of Business
“The formation of United Contractors is the culmination of tremendous effort by union contractors. We have created an organization that can utilize the strength and knowledge of a wide variety of contractor members with talented staff support to solve the diffi cult problems we all face. The challenges are great and we will not solve them overnight; however, I believe our combined effort can turn these challenges into opportunities.” — Jack Estill, Appian Engineering, Inc.
“United Contractors is the culmination of a twenty year relationship between EUCA and AECE Contractors. The labor relations activity of both organizations has lead to the formation of the largest and strongest Union Only organization in California. United Contractors members intend to insure the success of unionized construction in California for decades to come. Through cooperation with our affi liated unions, United Contractors is dedicated to its member fi rms and intends to negotiate to keep our signatory union member fi rms competitive.” — Rich Gates, DeSilva Gates Construction
“The launch of United Contractors is a signifi cant step towards preserving the future of union contracting in the Northern California marketplace. United Contractors is a collection of contractors (both large and small) who’s interest are completely aligned…to continue promoting union contracting across California while tackling the current and future issues that our industry is faced with. The collection of talent across the membership base is second to none…the future is bright for this association!” — Brian Gates, Top Grade Construction, Inc.
“Our industry has suffered from fragmented representation of signatory companies competing in this arena. The time has come for a united voice of the many talented people whose futures are dependent upon the maintaining of a healthy union construction industry. The goal of United Contractors is to be the most relevant Construction Association in California.” — Robert Spinardi, St. Francis Electric
“United Contractors will change the way industry organizations do business—stewardship of the Union industry.” — Mike Ghilotti, Ghilotti Bros., Inc.
— Henry Ford
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*Offer good from March 1 to March 31, 2012, on new Cat 259B3 Compact Track Loaders, while supplies last. Offer is available to customers in Peterson’s territory only and cannot be combined with any other offers. Suggested retail 60-month payment does not necessarily reflect the exact model and configuration shown. Machine specifications include: Tier 4 Interim engine, High Flow, 66” GP Bucket. Standard Machine Warranty included. The preconfigured machine represents financing through Cat Financial and does not include taxes, set-up, delivery, additional options or attachments. Financing and published rate are subject to credit approval through Cat Financial. Additional terms and conditions may apply. Subject to change without prior notice.
P45_0212 © 2012 Caterpillar All Rights Reserved CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow” and the “Power Edge” trade dress, as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.
