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Addressing Contractor Concerns During COVID-19

Gradually, states are beginning to lift measures enacted to mitigate the effects of COVID-19. But as business slowly starts to return to a new "normal," employers have been and will continue to face various issues that may impact staffing and timely operations. Our attorneys at Willis Law discuss potential problems and provide recommendations on how employers can handle them.

Return to Work or Continue to Collect Unemployment?

With the Paycheck Protection Program (PPP) provision of the CARES Act, qualifying businesses can receive potentially forgivable loans to continue to pay workers. For employees receiving unemployment, that means they may be making more while collecting benefits than they did when getting a paycheck while employed. Thus, employees might refuse to return to their jobs. What can you, as an employer, do in this situation?

Employees who refuse return-to-work offers might be disqualified from collecting further unemployment benefits (unless their refusal is because of coronavirus- or pandemic-related issues, such as childcare or caring for someone with COVID-19). You can advise employees that if they refuse a recall, you will ask the state to terminate their benefits. Additionally, you can also remind them that with unemployment at a record high, plenty of people are ready and willing to fill their jobs. There is no guarantee a position will be waiting for them when the CARES Act's $600 expires on July 31, 2020.

You may also use a carrot to entice workers to return to work. Employees might need a financial incentive to come off unemployment.

A few examples of incentives include:

  • Temporary hazard pay
  • Return-to-work bonus
  • Long-term retention and/or attendance bonus for employees who report by a certain date and remain employed through the end of the year (of some other target date)

The possibilities are endless, and the reality is that certain employees will need some amount of financial incentive to come back to work.

What About Delays with Build Contracts?

COVID has caused and will likely continue to cause unanticipated delays because of the shutdown. A myriad of issues may arise, including labor shortages, supply chain problems, reduced staff on job sites, and more. The delays may impact agreements and contracts with customers and homeowners.

You may have several options to navigate contract delays resulting from COVID-19:

  • Change orders: These are key to extending deadlines and addressing new build timelines and work processes as a result of the shutdown (and in the event of another shutdown). Change orders should:
    • Reflect some cushion in timing because of delayed supplies
    • Reflect increased pricing on labor
    • Deal with social distancing and CDC COVID mitigation recommendations
  • Planning: This is key to address coronavirus-related construction delays. It's essential to plan:
    • To pay higher wages to get good help
    • To pay subs a premium and have your subs make your job a priority
    • Way ahead on orders, thinking through your job more than ever to maintain a cadence on the job site.
  • Mediation clauses: These can be used to help remedy disputes about increased pricing and delays.

What Should Member Businesses Be Aware of with PPP?

PPP is still available to businesses. Applying for a loan requires navigating the subtle nuances of the application, requirements, and various other items to consider. Attorney Michael Willis is available to discuss the process and answer any questions about PPP or unemployment concerns for builders, subcontractors, vendors, and suppliers. He can be reached at mjwillis@willis.law.

If Workers Aren't Following Coronavirus Mitigation Efforts, What Risks Could Businesses Face?

State orders enacted to slow the spread of COVID-19 establish various rules and guidelines employees and employers must follow, including wearing face masks and maintaining social distancing. Consequences could ensue for failure to comply with the orders.

Here are a few things to look out for:

  • Social shaming. The self-appointed social media and Facebook police may make comments if they see workers not following guidelines.
  • A job site visit by the Department of Health.
  • A job site visit by the police.

Ensure that you have written policies posted at the job and supply personal protective equipment (PPE). By taking necessary steps, you have done what you can. If the workers are not following the rules in your presence, at least your company has done the right things to ensure compliance. You can only do so much babysitting. If you have any questions, contact Attorney Shaun Willis at willis@willis.law.

For more information about coronavirus-related business issues, visit our helpful COVID-19 sections for businesses and builders/contractors. You can also call Willis Law at (888) 461-7744 or contact us online to discuss your situation.

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