Construction Career Collaborative and the Archdiocese of Galveston-Houston hosted a town hall meeting for seven Contractors on April 11, 2016 at the offices of the Houston Chapter of Associated General Contractors to discuss the recent decision by Daniel Cardinal DiNardo for the Archdiocese to support the C3 initiative. Those in attendance included representatives from Arch-Con Construction, Axis Builders, Brookstone, Durotech, Humphries Construction, Paradigm Construction, Westfall Group and Zenith Construction.
The meeting featured opening remarks from Steve Faught, Director of Construction and Preventive Maintenance for the Archdiocese, who described the decision made by Cardinal DiNardo and its desired impact. Faught spoke of up to 10 archdiocesan projects, currently in the planning stages, which he hopes will become C3 projects. He also highlighted his hope that the cost impact of C3 projects for the Archdiocese will be minimal. To support this aspiration, Faught spoke of a large commercial office-building project, which was bid with C3 requirements and without them. Once the bids were totaled, the cost differential for the bids, which specified C3 criteria, was approximately .04% (four one hundredths of one percent) more than the bids without C3 requirements. Faught then described his belief that the potential savings gained from higher quality construction, resulting in lower building operational and maintenance costs, and a safer job site, will far surpass the incremental cost of C3 in construction.
Jim Stevenson, Board Chairman of C3, then spoke to those in attendance about the history of C3, its mission and principles and the need to make a career in the craft trades attractive once again. Stevenson also provided an update to C3’s growing impact on the commercial construction industry, which included identification of the eight high-profile owners who support it as well as their completed, ongoing or upcoming projects. In addition to the Archdiocese of Galveston-Houston, owners supporting the C3 mission include Texas Children’s Hospital, M.D. Anderson Cancer Centers, Memorial Hermann Healthcare System, Museum of Fine Arts-Houston, Hines, Jones Lange LaSalle and Greater Houston Partnership. Stevenson also identified the 107 construction companies who, as of the town hall meeting, had received designation as C3 Accredited Employers. Included in that number were 17 Contractors and 90 Specialty Contractors. (Since this meeting, the number of C3 Accredited Employers has grown to 116.)
I followed Stevenson to the podium and outlined for the attendees the expectations of a Contractor working on a C3 project, which include the importance of a pre-bid conference to set expectations of C3 requirements for all bidders, utilization of the C3 Training Database as a project tool, the delivery of C3 Orientation to all craft workers on the project and the submission of project metrics each month.
The meeting was concluded with a panel discussion featuring members of the C3 Board of Directors. Panelists were Tom Vaughn, president of Vaughn Construction, Mike Holland, chief operating officer of Marek Bothers Systems and Stevenson, who is president of the Houston Division of McCarthy Building Companies.
The Archdiocese of Galveston-Houston is the most recent addition to the ranks of prestigious owners who recognize that the issues facing the craft worker in the commercial construction industry must be addressed in order to make a career in the craft trades attractive once again. The payoff for these owners, once C3 principles of Financial Health & Well Being, Safety Training and Craft Training are achieved, will be higher quality buildings with lower operational and maintenance costs, safer job sites and a trained, sustainable craft workforce to construct their buildings to which prospects are attracted because it provides a career with compensation to support a middle-class lifestyle. I hope that you agree and will support C3 as well!
C3 continues to build momentum as evidenced by two recent occurrences, starting with the announcement that Texas Children’s Hospital has specified that its new TCH-The Woodlands Campus and TCH-Feigin Center 18th Floor OB/GYN Renovation will be C3 projects. This means that all contractors working on them – every General Contractor and every Specialty Contractor – must be an Accredited C3 Employer or have received C3 Project Status designation (formerly called Conditional Status). Not only is this a big win for craft workers, C3, and a sustainable construction workforce, but contractors have also told me that it is a win for them as well because it ensures a level playing field for all when competing for work.
In addition, and very importantly, C3 recently received notification from the Internal Revenue Service that it is now a 501(c)(3) organization. We can now raise money to fund our activities which enable C3 to fulfill its mission.
These activities include working to develop craft training for those trades that do not currently provide it, working to improve craft training for trades that do, and the creation of curriculum in high schools, community colleges, and other education providers for those students interested in a career in construction.
C3 will establish an audit function to verify that workers are paid according to wage and hour laws, while also assuring that workers compensation insurance is provided and safety training is delivered.
Because C3 represents change in how the commercial construction industry conducts its business, there is a natural resistance because change is difficult. However, C3 represents positive progress that must occur if we are to attract young people seeking a career to the construction industry.
As the industry adapts, C3 gathers more and more momentum. There are now more than 30 Accredited C3 Employers, up from six just four months ago. However, C3 needs more general contractors and specialty contractors to become accredited in order to take control of the industry and its workforce. C3 also needs more forward-thinking owners who recognize that high-quality projects produce happy users and cost less to maintain.
Please help us add to our growing momentum. If your firm is not an Accredited C3 Employer, or you are an owner who has yet to investigate what C3 can bring to your project, please contact me via email at email@example.com or by phone at 713.843.3719.
Mislabeling construction workers as contractors draws federal scrutiny Regulators team up to fight practice of employers labeling construction workers as independent contractors.
By L.M. Sixel,By L.M. Sixel
June 13, 2014
Federal regulators are covering all the bases in a push to cut down on the widespread practice of construction companies' misclassifying employees as independent contractors, depriving them of overtime and other employment benefits.
The U.S. Department of Labor's wage and hour division is teaming with state licensing agencies so they know when license holders run afoul of wage and hour laws; meeting with construction companies and worker rights groups to develop new strategies to address the problem; and planning to add 300 more wage and hour investigators next year, including 52 in the Southwest, a local administrator said.
"It's really an alarming trend we're seeing," said Betty Campbell, the Labor Department's deputy regional administrator for wage and hour in Dallas.
She said the pervasive practice of misclassifying employees as independent contractors deprives them of the right to earn minimum wage and overtime as well as protection offered by such federal laws as the Family and Medical Leave Act and Americans with Disabilities Act.
Misclassified workers are also forced to pay the employer portion of the Social Security taxes, she added. And if they're injured at work, they have no workers' compensation. Or if they lose their job, they're denied unemployment benefits.
The initiative is coming at a time when the Labor Department estimates that one in every 13 workers in the Texas is in the construction industry.
A study last year by the Workers Defense Project and the University of Texas found that more than 40 percent of construction workers in Texas are either classified as independent contractors or paid under the table. The study, based on nearly 1,200 interviews with construction workers, estimated that payroll fraud alone represents an estimated $54.5 million loss in unemployment insurance tax revenue.
Campbell said it's not just workers who are hurt by misclassification. Employers who play by the rules can't compete when some employers don't pay taxes or overtime.
Stan Marek, president and CEO of the Marek Family of Companies, was glad to hear the Labor Department is turning a spotlight on a problem he's been trying to highlight for years.
"I'm a very unpopular guy in my industry," said Marek, who was on a conference call recently with Campbell and other Labor Department officials to discuss misclassification.
"We have to find a way to get our kids into the trades," Marek said, "and the only way we can do that is an hourly wage and a career path."
As more construction companies get away with misclassification, the more pressure there is to cheat, said Chuck Gremillion, executive director of C3-Construction Career Collaborative, a group of contractors and owners seeking to build a more secure and growing workforce for the commercial construction industry.
"It's kind of a vicious cycle," he said.
Gremillion estimates that contractors who misclassify employees operate with 30 to 35 percent lower labor costs than the companies that abide by the minimum wage, overtime, Social Security, unemployment insurance and other employment laws.
Lack of enforcement
It's not that hard to get away with it, he said, because of the lack of enforcement. That, in turn, makes the construction industry an undesirable place in which to make a career.
"Who wants to join an industry in which workers are paid unfairly?" he asked. "Construction used to be a great way to earn a middle-class income, but not so much anymore."
The problem is exacerbated by the push among high school educators to get students to enroll in college, he said. The dismantling of vocational educational programs has reduced the number of young people who are interested in a construction career.
To fill the jobs, many construction companies have turned to undocumented workers who are not likely to complain of wage and hour violations, he said.
To encourage better compliance with employment laws, the agency is seeking liquidated damages, which double the amount of back pay that an employer would have to pay, Campbell said.
The agency is also looking closer at the relationship between the general contractor and the subcontractors it hires to determine if there is a joint- employment arrangement. In those circumstances, the agency can seek back pay from the general contractor that hired the subcontractors.
"We want them to know they have a responsibility," she said.
Efforts won't stop there, Campbell added. She said the agency intends to pressure the owner of the property who hired the general contractor in the first place to make sure the workers are paid properly.
Extra dose of publicity
The agency is already doing that in the news releases it issues after back pay has been awarded, she said. When the owner is a well-known company or there is a joint-employer relationship, the agency is pointing that out.
While there is no way to determine if the extra dose of publicity is effective, Campbell said the agency plans to continue it.
Gremillion would like to see federal regulators show up at construction work sites and examine the payrolls. On-the-spot audits to see if taxes and other deductions are getting taken out of paychecks would draw attention to the problem, he said, speculating that it would stop some companies that have taken to calling their employees "entrepreneurs."
“I passionately believe that when you invest in people and you train people, you get a return on that investment – it is not an expense, it is an investment that generates a return many times over.” – Chuck Gremillion, the Construction Career Collaborative’s new executive director.
Read more about our next exciting steps! (Thanks Construction Citizen for the link!)
Construction Career Collaborative welcomes native Houstonian Chuck Gremillion as its first full-time Executive Director. He will be responsible for the operations and strategic direction of C3’s organization and initiatives.
“Chuck Gremillion is a proven leader in Houston having led a family business, A&E - The Graphics Complex, for over 30 years. Chuck and A&E are longtime supporters of the design and construction industry, which made him a perfect choice to become our first Executive Director,” said Jim Stevenson, C3 Chairman of the Board of Directors.
“Chuck represents an evolutionary milestone for C3 that will provide strong leadership with dedicated responsibilities designed to support growth, enhance benefits to our participants, and provide greater opportunity for the industry as a whole to support our founding principles. We are ready for C3 to expand and grow with continued success under Chuck’s guidance and influence,” said Katrina Kersch, C3 Chair of the Craft Training Committee.
“Chuck’s presence will allow more construction owners to hear and understand the importance of their role in a sustainable workforce,” said Peter Dawson, Senior Vice President of Facilities, Texas Children’s Hospital.
Upon graduation from The University of Texas at Austin in 1976, Chuck began working in the family business, A&E Products Company. Chuck eventually moved through the ranks first as an outside salesperson, then production manager, and eventually became president in 1992. Chuck successfully worked with four brothers and a brother-in-law and attributes much of the business’ success to an unwritten family philosophy of “Love each other first, then run the business.” A&E was sold to Thomas Reprographics of Richardson, Texas in January, 2007. Chuck retired from the reprographics industry in 2011.
Chuck is active in the community, having served on the boards of directors of Rice Design Alliance, Architecture Center Houston Foundation, Better Business Bureau of Metropolitan Houston, ReproMAX and the International Reprographic Association, from which Chuck received the George S. Bukovsky Award in 2008. He and his wife, Janna, have been married for 33 years and reside in Katy, Texas. Chuck and Janna have four children and three grandchildren.
GET TO KNOW C3 - www.constructioncareercollaborative.org
Construction Career Collaborative (C3) is an alliance of socially responsible owners, contractors, and specialty contractors created to positively address the issues facing the craft worker by embracing these core principles for our commercial construction workforce:
Financial Security, Health, and Well Being + Safety Training + Craft Training
Construction Industry Institute (CII)
Construction Users Roundtable (CURT)
National Center for Construction Education and Research (NCCER)