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

construction wage and hour compliance

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 provides work for government contracts and commercial projects.

Crime Scene: Construction Sites Throughout The Tri-State Area

An electrician employed by Express Electrical & HVAC registered a complaint with the Department of Labor Wage and Hour division (Indianapolis District Office). The DOL opened an investigation into payroll practices at the firm.

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. The job was subject to the Davis-Bacon Act. The failure to pay overtime violated the Contract Work Hours and Safety Standards Act (CWHSSA) and the FLSA.

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

Allegation #2: Employer Failed to Maintain Records

The employee alleged that Express Electrical & HVAC failed to maintain records of time cards, shifts, and wages. The employer was accused of a flagrant violation. It spanned many months and pay periods. The breach involved hundreds of employees and multiple projects.

Verdict: Employer Fined $32,640

The court found Express Electrical & HVAC guilty. The judgment covered back wages, overtime, and fringe benefits. They were paid to 36 employees. The employee who filed the complaint received back pay even though he was no longer with the company.

How Can Contractors Protect Themselves From HR Scandals?

For construction labor compliance, you need WorkforceHUB from SwipeClock. WorkforceHUB is a cloud-based HR portal. It’s ideal for contractors. It manages complex wage and hour compliance for construction companies.

WorkforceHUB Has Your Back

WorkforceHUB includes TimeSimplicity, TimeWorksPlus, and TimeWorks Mobile. TimeSimplicity handles scheduling. TimeWorksPlus handles employee time and attendance. TimeWorks Mobile is the timekeeping mobile app.

Your employees clock in and out on their smartphone. In addition to calculating straight time, TimeWorksPlus tracks meals, breaks, and overtime. Accurate tracking ensures payroll compliance.

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.

Workplace Investigations and Wage and Hour Recordkeeping

When an employee brings an action, courts usually rule in favor of the employee if there are insufficient records. In this case, the DOL found the employer to be in violation of wage and hour laws. But there are many situations where a compliant employer is fined for missing 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.

Employers Required to Keep For 3 Years:

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

Employers Required to Keep for 2 Years:

  • Time cards 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) hired 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 large project can bankrupt a company. If labor is not scheduled strategically.

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-project schedules with high-level detail
  • Minimize overstaffing and unplanned overtime
  • Analyze worker allocation for better bidding
  • No more schedule confusion
  • Accommodate worker schedule preferences

Use the construction employee scheduling templates in TimeSimplicity to build schedules for each site. Drag and drop shifts and employees. With email and text templates, you can connect with your crew right from the scheduling screen.

TimeWorks Mobile with GPS is the TimeWorksPlus mobile app. With TimeWorks Mobile, your workers can:

  • Clock in from the job site on iPhone or Android
  • See their schedule as soon as it’s available
  • Fill out time cards online
  • Pick up extra shifts
  • Submit scheduling preferences
  • Check PTO balances without calling HR

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 time cards 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?

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.

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

By Liz Strikwerda