Are you in need of more licenses for your Sage Construction and Real Estate (Sage CRE) software? Does your team have to wait for someone else to exit the software before they can log-in and get their job done? Now is a great time to add extra licenses to your current Sage CRE set up!
Mix and match additional user licenses, modules, and integrated operation solutions to save big.*
Save 10% with 2 user licenses or modules.
Save 15% with 3 user licenses or modules.
Save 20% with 4 or more user licenses or modules.
For more information and details*, contact Rebecca Schindler at 301.231.6276 or email@example.com.
The current construction landscape is competitive. Management teams often find themselves scrambling to win large jobs, while trying to be cost-efficient. Such scrutiny of costs has led to companies structuring their contracts to pay laborers as little as possible, skimping on implementing proper safety measures at job sites, and neglecting to recognize environmental protection standards, among other issues. This has resulted in increased regulation to protect the workforce against these negative externalities. Here are the key regulatory authorities’ general contractors answer to and areas to be mindful of in day-to-day operations.
Department of Labor (DOL)
The DOL lists the misclassification of laborers by their employers as one of the most serious problems facing covered workers; misclassification puts workers at risk of being denied essential protections and benefits they would otherwise be entitled to. Classifying employees as independent contractors is the most prevalent violation, it allows contractors to avoid paying their share of Social Security and Medicare taxes, overtime pay, employee benefits such as vacation, sick, and holiday pay, unemployment compensation tax, and workers’ compensation insurance. Employers who are not careful about correctly categorizing their laborers run the risk of paying significant fines plus wages and benefits in arrears. Even worse, class action lawsuits from employees and their families, and negative publicity can haunt non-compliant companies. Employees who feel they were misclassified and wrongfully denied wages and benefits, can file a complaint with the DOL, which triggers a prompt investigation that can result in large penalties. In 2013, DOL investigations resulted in over $83 million in paid back wages for roughly 108,000 misclassified employees.
Defense Contract Audit Agency (DCAA)
Recently, the DCAA has gotten tougher on defense contract audits. Previously, a certain degree of non-compliance was allowed, now there is a strict grading system of pass or fail. Contractors who work with the Department of Defense in any way, should make sure their books and internal controls can stand up to an audit from the agency. Review the “Audit Process Overview – Information for Contractors Manual” under the Guidance tab on the DCAA’s website for a great overview of the procedures performed to assess compliance.
Occupational Safety and Health Administration (OSHA)
All private sector businesses in the U.S. must comply with OSHA, the demands of construction work put contractors at increased risk for compliance violations. Items that go overlooked, no matter how small, can take a toll on cash stores. Even minor infractions can cost up to $7,000 per violation, per occurrence. Violations can quickly compound and each repeat violation can cost a business up to $70,000, a proactive plan to meet OSHA requirements before an offense is committed will save time and money in the end. Consider designating one or more employees within your organization to periodically monitor new OSHA regulations and assist with implementation strategies.
Environmental Protection Agency (EPA)
The most common EPA violations are improper disposal of hazardous materials, which in construction most commonly involves paint. Violations of EPA statutes can result in civil or criminal charges depending on the severity of the situation. Modern best practices generally incorporate compliance with EPA statutes on job sites, but if this an unevaluated business area, it would be wise to do so to avoid future liabilities.
State Licensing Boards for Contractors
Know the requirements for obtaining licensing and permits in each jurisdiction you do business, and for each trade your company performs. Failure to do so could land you in hot water.
For more information, contact Aronson’s Construction & Real Estate team at 301.231.6276.
Additional Reading Resources
The formation of business partnerships and corporations is typically accompanied by a rush of excitement and positivity from the founding partners and shareholders of the organization. During the beginning stages of a company’s life, shareholders and partners often spend a significant portion of their time outlining the plans of the business’ operations under the pretense that the entity will continue in perpetuity without changes to the organization’s original ownership structure. In reality, the divestiture of a partner/shareholder’s interest is a common occurrence many partnerships and corporations go through every year. There are a number of reasons why a partner or shareholder may want or need to divest his or her ownership interest. Ideally, a buyout agreement should be created during the formation of a partnership/corporation in order to avoid disagreements between partners and shareholders during the divestiture process. For partnerships, in the event that a buyout agreement has not been established prior to the divestiture process, the liquidation of a partner’s interest will typically adhere to uniform federal laws and regulations. Corporate shareholders should default to applicable state law in cases where their corporation has not established a buyout agreement.
When it comes to the process of divesting ownership interest, the best approach is a proactive approach. Incorporating a buyout agreement into a partnership/corporation’s operating agreement is the most effective means to avoid potential conflicts between owners during the divestiture process. A buyout agreement is a legally binding provision that serves to establish the parameters and circumstances under which an owner may divest his or her ownership interest. Buyout agreements may be customized to satisfy the will of the company’s owners. Listed below are some of the more common parameters addressed under a buyout agreement:
A member of a partnership that has not adopted a formal buyout agreement provision may choose to divest of their partnership interest in accordance with regulations established under the Revised Uniform Partnership Act (the Act). Under the Act, partners may “disassociate” themselves from a partnership by transferring their interest to an individual or entity of their choosing without the consent of the other partners in the partnership. However, it is important to note that the incoming partner (transferee) will only be entitled to the profit, loss, and distribution rights of the outgoing partner (transferor); managerial rights and responsibilities are not considered transferable interest under the Act. Unlike partnerships, there are no uniform regulations for corporations that do not have a formal buyout agreement in place. Therefore, shareholders wishing to liquidate their ownership interest will adhere to the laws of the state in which the corporation is incorporated.
While the termination of a partner or shareholder’s ownership interest may be untimely, the divestiture process does not have to be a difficult one. Consensus between the partners and shareholders during the entity’s formation guarantees a smoother transition in the event a partner or shareholder wishes to forego their ownership stake in the company.
For more information contact Kamal Eko at 301.231.6200.