The pandemic has brought with it a terrain of earthquakes and minefields for the construction industry. While prospects appear to be brightening, much uncertainty remains, and Covid-19 and its effects on the U.S. economy look like they’re going to be unwelcome guests for months, and perhaps years to come. Our focus being construction safety and health, in this article we will point to some issues I think are deserving of your attention, if you operate a contracting business.
One notable trend in the industry resulting from the pandemic is that many small subcontractors are fighting to remain afloat. Overall, to be sure, construction activity has recovered somewhat in 2021 versus 2020, and while the ambitious spending plans of the Biden Administration (and the explosion of debt over the past couple of years) risk trigger severe inflation, public works spending appears to be about to expand appreciably, which is obviously a good thing for the construction industry. However, the structural ailments of the “small subcontractors” component of the industry persist as a problem, and not just for the small subcontractors themselves. With the loss of business due to the pandemic, many smaller companies simply went out of business, and of those that remain, most are suffering from what is a chronic problem even in relatively good times (slender profit margins, above all) and the shortage of skilled tradesmen, which has only gotten worse as, last year, hundreds of thousands of construction workers were jobless, and many have abandoned the industry altogether.
What many general contractors are doing to cope with the thinning of the subcontractor ranks is to reduce their dependency on subcontractors (and the vulnerability of their projects to subs that might be handing on by a thread) by developing (which usually means “hiring”) employees competent to perform many trades traditionally done by subcontractors, and doing that work in-house. Potentially, at least, this may provide significant advantages. For one thing, in the measure that a general contractor has work that was traditionally done by subcontractors done by its own forces, it has greater control over that work, and coordinating it with that of other contractors on the job. By hiring workers directly, a general contractor can avoid paying the profit margin taken by the owners of its former subcontractors. Unpleasant surprises (such as a critical sub going out of business without warning, due to problems in getting paid on other projects) may be avoided.
Of course, while a general contractor could establish an affiliated or “captive” entity to do those trades (typically, plumbing and electrical) that require licensure, the necessity of licensure in order to perform those trades limits a general contractor’s ability to drop its electrical and plumbing subs, and hire electricians and plumbers directly.
General contractors vary enormously (and may vary from one project to the next) in how much and what elements of the physical work they perform with their own forces on their projects. Sometimes, a GC will sub out all of the physical work, and provide a superintendent, financial management and required performance and payment bonds. At other times, the GC may have its own forces onsite and perform much of the physical work throughout the course of the job. Of course, by reason of having control over the jobsite, under the New York Labor Law and the OSH Act, the general contractor is generally responsible for safety observance by its subcontractors. However, whereas the GC employing a panoply of subs has such responsibility for project safety as conferred on it by the “multi-employer worksite doctrine,” it will usually be aided in maintaining a hazard-free jobsite by a team, however informal it might be, consisting of those supervisors or officers of the subcontractors having responsibility within their respective organizations for employee safety.
If, however, in the Covid or post-Covid environment. a general contractor elects to use the minimum number of subcontractors, and to perform most work heretofore done by subcontractors using its own forces, its safety responsibilities will be multiplied correspondingly. Preventing injuries and preventing OSHA violations requires a wide range of knowledge, and the hazards, OSHA standards, and steps to be taken to avoid injuries vary widely from trade to trade.
Accordingly, you must not assume that safety and OSHA compliance will “just happen” if you jettison relationships with your subcontractors, or many of them, or that all will be well if you simply hire older, more experienced workers for those trades that you are newly undertaking to perform in-house. While risk-taking behaviors subside somewhat with age, and experienced workers will likely, by reason of having been trained over and over, be more aware of best safety practices than newcomers to the industry, OSHA is adamant about the necessity to train and to re-train. Plus, the safety proficiency and leadership abilities of your field supervisors are essential elements of a successful safety program; since the rank and file generally do not direct the activities of others, their knowledge of the full range of OSHA requirements applicable to the work of their trade is less important than the knowledge of your supervisors.
If you are experiencing higher-than-usual turnover among your supervisors, if you’re also doing unfamiliar work, and trying to keep abreast of measures to minimize Covid infections among your employees, you need a sober realization that you’re stretched pretty thin in the safety department. If you’re not invested in a highly-skilled safety manager, this might be the time to consider hiring one, and if that isn’t an option, increasing safety planning is strongly recommended. As you prepare to undertake new project, you need to devote some serious effort and get input from others (in particular, people highly experienced in safety planning or supervising employees in performing any trades you’re taking on that you don’t know backwards and forwards). Everyone in your company needs to be told that the health and financial challenges flowing from the pandemic cannot diminish anyone’s efforts to work safely. Indeed, you should invite your employees to be even more actively involved in safety efforts, and to offer any information or practical suggestions they might have or learn of. Increasing safety training (with emphasis as always on the “fatal four” — falls, electrocutions, struck-by and caught-between injuries).
We all know that these are singularly challenging times. If you want to emerge, however long it might take, on the other side of this crisis with your business intact, it’s critical to avoid dropping the ball on employee safety. The companies that give safety the attention it requires will have the best prospects to survive and prosper.