Employee or Independent Contractor? New Administrator’s Interpretation Issued by Department of Labor Provides Guidance
August 04, 2015 —
Tanya Salgado – White and Williams LLPThe question of whether a worker should be classified as an independent contractor or an employee is fraught with confusion and misunderstanding for many businesses. Compounding the problem is the fact that there are a number of different tests used to determine employee status, which vary by jurisdiction and by the particular law in question. For example, the Internal Revenue Service uses the common law rules which focus on the degree of control and independence exercised by the worker. In contrast, the United States Department of Labor uses the “economic realities” test which focuses on whether the worker is economically dependent on the employer.
In an effort to help combat the confusion over proper worker classification, the United States Department of Labor (DOL) has issued a new Administrator’s Interpretation that provides a detailed explanation of the test used by the DOL to determine if a worker has been misclassified as an independent contractor. The DOL enforces the Fair Labor Standards Act (FLSA), which mandates that employees (but not independent contractors) be paid minimum wage and overtime. When a business misclassifies non-exempt workers as independent contractors, and those workers are not paid the minimum hourly wage for their labor, or are not paid overtime when they work more than 40 hours in a workweek, this violates the FLSA.
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Tanya Salgado, White and Williams LLPMs. Salgado may be contacted at
salgadot@whiteandwilliams.com
The Importance of a Notice of Completion to Contractors, Subcontractors and Suppliers
August 12, 2024 —
William L. Porter - Porter Law GroupThe recording of a valid “Notice of Completion” with the County Recorder is an event of significance to owners, contractors, subcontractors and suppliers alike. The recording of a Notice of Completion is one of several methods used to trigger the time period for the recording of mechanics liens and service of stop payment notices. Although the recording of a Notice of Completion is not absolutely required on any given project, all those working in the construction industry should understand its significance.
When a valid Notice of Completion has not been recorded in relation to a construction project, a contractor, subcontractor, or supplier might from ninety to one hundred fifty days after completion of the project to record a mechanics lien or serve a stop payment notice to secure payment for their services on the project, depending on the facts. However, if a valid Notice of Completion is recorded, then the deadline under most circumstances accelerates and subcontractors and suppliers must record a mechanics lien or serve a stop payment notice within only thirty days thereafter. Under the same circumstances, a prime contractor has only sixty days after the recording of a valid Notice of Completion to record a mechanics’ lien. Failure to meet these deadlines often results in loss of the right to a mechanics lien or stop payment notice. There are limited exceptions to these general deadlines, depending on the facts. If you believe you may have missed an important deadline to seek collection of a construction debt, you should consult with a construction attorney immediately to secure your avenues of collection, including the mechanics lien and stop payment notice remedies, if still available.
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
Dispute Waged Over Design of San Francisco Subway Job
July 30, 2019 —
Erica Berardi - Engineering News-RecordContractor Tutor Perini Corp. is clashing with the San Francisco Municipal Transportation Agency over what the firm says are alleged design flaws that may push past December the completion of the already-delayed $1.6-billion Central Subway Project.
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Erica Berardi, ENRMs. Berardi may be contacted at
BerardiE@enr.com
Policyholder Fails to Build Adequate Record to Support Bad Faith Claim
May 19, 2011 —
Tred R. EyerlyThe importance of careful preparation and documentation was the take away lesson in a Texas bad faith case, C.K. Lee v. Catlin Specialty Ins. Co., 2011 U.S. Dist. LEXIS 19145 (S.D. Tex. Feb. 28, 2011).
C.K. Lee owned a commercial shopping center in Houston. Catlin issued a commercial property policy to Lee. On September 12, 2008, Hurricane Ike hit and caused substantial property damage throughout the Texas Gulf Coast area. On September 24, 2008, Lee submitted a claim for damage to the roof of his shopping center to Catlin.
Catlin hired Engle Martin to represent its interests in adjusting the claim. Engle Martin eventually adjusted over 200 Ike-related claims for Catlin.
In November 2008, Engle Martin and Emergency Services Inc., retained by Lee, inspected Lee’s property. Engle Martin observed evidence of roof repairs that had apparently been made both before and after Hurricane Ike. Engle Martin decided it was necessary to use an infrared scan of the roof to help identify which damages, if any, were attributable to wind and which, if any, were attributable to sub par, prior repairs or natural deterioration.
Engle Martin retained Project, Time & Cost (PT&C) to conduct the infrared inspection. PT&C’s inspection determined there was no wind-related damage to the roof and no breaches or openings created by wind. Instead, the roof had exceeded its life expectancy and was in need of replacement due to normal wear and weathering. Consequently, Catlin decided that the damage to Lee’s roof was not caused by winds from Hurricane Ike.
Meanwhile, Lee’s contractor, Emergency Services, prepared a report estimating that the total cost of repairing the roof would be $871,187. Engle Martin’s estimate for repair of the roof was $22,864.
Lee filed suit for breach of contract, breach of the duty of good faith and fair dealing, and violations of the Texas Insurance Code. Catlin moved for summary judgment on all claims but breach of contract, arguing that because there was a bona fide dispute concerning the cause of the damages and whether they were covered under the policy, there was no evidence of bad faith or violations of the Texas Insurance Code.
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
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Dispute Resolution Provision in Subcontract that Says Owner, Architect or Engineer’s Decision Is Final
March 29, 2021 —
David Adelstein - Florida Construction Legal UpdatesIn subcontracts, it is not uncommon to see a provision that says something to the effect:
Should any dispute arise between the parties respecting the true construction or interpretation of the Plans, Specifications and/or the Contract Requirements, the decision of the Owner or the Owner’s designated representative as set forth in the General Contract shall be final.
This is a provision in a subcontract dealing with dispute resolution, typically when there is a dispute as to whether the subcontractor is performing extra-contractual or base contract work regarding an “interpretation of the Plans, Specifications, and/or the Contract Requirements.” It is not uncommon for there to be a dispute as to whether certain work is within the subcontractor’s scope of work or outside the subcontractor’s scope of work and subject to a change order.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Coverage Under Builder's Risk Policy Properly Excluded for Damage to Existing Structure Only
April 05, 2017 —
Tred R. Eyerly – Insurance Law HawaiiThe Tenth Circuit affirmed the District Court's determination that there was no coverage under the builder's risk policy. Gerald H. Phipps, Inc. v. Travelers Prop. Cas. Co. of Am., 2016 U.S. App. LEXIS 2764 (10th Cir. Feb. 16, 2017).
GH Phipps Construction Company (GHP) was hired to renovate and expand the University of Denver's library. GHP was completing installation of a new roof on the library when water from melting snow leaked into the building. The water damaged existing drywall and insulation in the stairwells and elevator shafts that GHP planned to preserve and update. Before the snow melt mishap, GHP had completed some preliminary work in the damaged areas to designate locations for future installation of mechanical, plumbing and electrical systems. But GHP had not yet installed any new materials, updated any lighting fixtures, or patched and painted any existing drywall in the damaged areas.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Virginia Tech Has Its Own Construction Boom
May 10, 2013 —
CDJ STAFFThe last few years has been a tough time for the construction industry, unless you’re in the proximity to the campus of Virginia Tech. Since 1999, the school has seen more than $1 billion in construction projects. Charles Steger, the president of the university says that “we have no intention of slowing down.”
Steger views some of the construction as vital to the school’s mission, noting that at Davidson Hall, which contains chemistry laboratories, “the wiring and other facilities were almost a health hazard.” The building is undergoing a $31 million renovation.
In order to keep the campus walkable, parking lots are being replaced by parking garages. Four dormitory buildings will be demolished and replaced by new facilities. Funds for the development have come from a mix of student fees, donations, research revenues, bond issues, and taxpayer revenues.
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Deducting 2018 Real Property Taxes Prepaid in 2017 Comes with Caveats
January 04, 2018 —
William Hussey – White and WilliamsMany clients and friends have inquired about accelerating the payment of their 2018 real property taxes as a result of the recent enactment of the federal Tax Cuts and Jobs Act. Pursuant to that Act, the deduction for state and local income, real property and other taxes will be capped at $10,000 in tax years 2018 through 2025. The Act, moreover, specifically disallows a deduction in 2017 for 2018 state and local income taxes that are prepaid before year-end.
The Act was not clear on whether a prepayment of 2018 real property taxes would be deductible in 2017. For certain taxpayers that are not subject to the alternative minimum tax, a prepayment of those 2018 real property taxes might be of current benefit to them.
Yesterday, the IRS issued an advisory to taxpayers outlining which real property tax prepayments will be deductible in 2017 and which are not. The text of that advisory, together with the illustrative examples, is set out below for your consideration.
IR-2017-210, DEC. 27, 2017
WASHINGTON - The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.
The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.
The following examples illustrate these points.
Example 1: Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018. On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a deduction for this prepayment on the taxpayer’s 2017 return.
Example 2: County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017 – June 30, 2018. County B intends to make the usual assessment in July 2018 for the period July 1, 2018 – June 30, 2019. However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018.
The IRS reminds taxpayers that a number of provisions remain available this week that could affect 2017 tax bills. Time remains to make charitable donations. See IR-17-191 for more information. The deadline to make contributions for individual retirement accounts - which can be used by some taxpayers on 2017 tax returns - is the April 2018 tax deadline.
IRS.gov has more information on these and other provisions to help taxpayers prepare for the upcoming filing season.
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William Hussey, White and WilliamsMr. Hussey may be contacted at
husseyw@whiteandwilliams.com
