US Construction Labor Laws

March 19th 2024

In the United States, construction labor laws protect the rights and well-being of workers in the construction industry. These laws establish standards for fair wages, safe working conditions, and equitable treatment of workers.

The history of construction labor laws in the United States traces back to the early 20th century when labor unions began advocating for better working conditions and fair wages for construction workers. Over the years, additional regulations have been enacted at both federal and state levels to address various aspects of labor relations, state standards, and worker protections in the industry.

This article provides a comprehensive guide for construction workers in the United States. Employers familiarizing themselves and enforcing compliance with the construction labor laws protect workers and provide them with safe working conditions.

This article covers:

Federal Laws Regulating the Construction Industry in the US
State Laws Regulating the Construction Industry in the US
Classification of Construction Workers in the US
Key Provisions of the US Construction Labor Laws Protecting Construction Workers
Importance of Compliance with US Construction Labor Laws
Rights of Construction Workers in the US
Obligations of Construction Employers in the US
Common Violations of Construction Labor Laws in the US

Federal Laws Regulating the Construction Industry in the US

Davis-Bacon Act

The Davis-Bacon Act is a federal law that requires contractors and subcontractors to pay prevailing wages and fringe benefits to laborers and mechanics employed on government-funded or assisted construction projects. This Act aims to protect workers from unfair wage compensation by establishing minimum wage rates that reflect the prevailing wages in the local construction industry.

Under the Davis-Bacon Act, contractors and subcontractors working on federal construction projects with contracts exceeding $2,000 must pay their employees no less than the prevailing wages and fringe benefits as determined by the Secretary of Labor.

Occupational Safety and Health Act (OSHA)

The Occupational Safety and Health Act (OSHA) ensures safe and healthy working conditions for employees across all industries in the United States. OSHA covers most private-sector employers and their employees, as well as some public-sector employers and workers. This Act empowers the Occupational Safety and Health Administration (OSHA), a federal agency under the Department of Labor, to set and enforce workplace safety and health standards, conduct inspections, and provide training and assistance to employers and employees.

Under OSHA, employers are responsible for providing a workplace free from recognized hazards that could cause serious harm or death to their employees. Employers must comply with OSHA standards, maintain records of workplace injuries and illnesses, and provide training, protective equipment, and necessary safety measures to employees. Employers are also required to inform employees about their rights under OSHA, including the right to report unsafe conditions without fear of retaliation.

Employees also have the responsibility to comply with all applicable OSHA standards, follow safety and health protocols established by their employer, and report hazardous conditions or unsafe practices if necessary. In addition, employees also have the right to request information from their employer about workplace hazards, seek training on workplace safety, and participate in OSHA inspections.

Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) establishes federal minimum wage and overtime pay requirements for most employees in the United States. As of 2024, the federal minimum wage is $7.25 per hour, although individual states may have higher minimum wage rates. Under the FLSA, non-exempt employees must be paid at least the federal minimum wage for all hours worked and receive overtime pay at a rate of one and a half times their regular rate of pay for hours worked over 40 in a workweek.

National Labor Relations Act (NLRA)

The National Labor Relations Act (NLRA), also known as the Wagner Act, protects the rights of employees to engage in collective bargaining and other concerted activities for mutual aid or protection. Under the NLRA, employees have the right to form, join, or assist labor unions, as well as to engage in collective bargaining with their employers to negotiate wages, benefits, and working conditions. This Act also prohibits certain unfair labor practices by employers and labor unions that interfere with employees’ rights under the NLRA, such as retaliating against employees for engaging in union activities or refusing to bargain in good faith.

It establishes the National Labor Relations Board (NLRB), a federal agency responsible for enforcing the Act, investigating unfair labor practices, conducting union representation elections, and adjudicating disputes between employers and unions. By safeguarding workers’ rights to organize and bargain collectively, the NLRA contributes to promoting fairness, equity, and stability in labor relations across various industries, including the construction sector.

Employee Retirement Income Security Act (ERISA)

The Employee Retirement Income Security Act (ERISA) establishes minimum standards for retirement, health, and other employee benefit plans in the private sector. This Act sets guidelines for the administration and management of employee benefit plans to protect the interests of plan participants and beneficiaries. ERISA aims to safeguard the retirement and health benefits of employees and promote the financial stability and integrity of employee benefit plans in the private sector.

Federal Employees’ Worker Compensation Act (FECA)

The Federal Employees’ Worker Compensation Act (FECA) provides workers’ compensation benefits to federal employees who sustain work-related injuries or illnesses. Its primary objective is to ensure that federal employees receive medical treatment, wage replacement, and other necessary benefits in the event of a workplace injury or occupational illness.

Under FECA, eligible federal employees are entitled to various benefits, including coverage for medical expenses related to their injury or illness, compensation for lost wages due to temporary or permanent disability, and vocational rehabilitation services to assist in returning to work.
Dependents of federal employees who die as a result of a work-related injury or illness may receive survivor benefits. FECA provides comprehensive coverage to federal workers, encompassing a wide range of occupational hazards and injuries, and plays a vital role in protecting the well-being and financial security of federal employees across the nation.

Family and Medical Leave Act (FMLA)

The Family and Medical Leave Act (FMLA) provides eligible employees, including those in the construction industry, with up to 12 weeks of job-protected leave for medical and family reasons. This includes situations such as caring for a newborn, a family member with a serious health condition, or the employee’s own health needs. This Act ensures that workers can take intermittent leave if necessary and return to their jobs or equivalent positions with the same pay and benefits.

Immigration Reform and Control Act (IRCA)

In the construction industry, where there is often a high demand for labor, IRCA compliance is crucial. Contractors and subcontractors must ensure that all workers hired for construction projects are legally authorized to work in the US.

The Immigration Reform and Control Act (IRCA) addresses the employment of undocumented workers. IRCA makes it unlawful for employers to knowingly hire individuals who are not authorized to work in the United States. Employers are required to verify the identity and employment eligibility of all employees, including completing Form I-9 and Employment Eligibility Verification for each worker.

Failure to comply with IRCA can result in severe penalties, including fines and even criminal charges for employers who knowingly hire undocumented workers. IRCA aims to protect the job opportunities and wages of US citizens and authorized workers by preventing the employment of unauthorized individuals who may be willing to work for lower wages, thus undercutting the labor market.

Child Labor Law

Child labor laws in the United States set regulations and restrictions on the employment of minors, ensuring their safety, well-being, and education. The FLSA sets the minimum age for employment in most occupations at 14 years old. However, in the construction industry, young workers under 16 years of age are only allowed to do office or sales work, while minors aged 16 and 17 may perform on-site work provided that the tasks are not deemed hazardous.

Minors employed in construction typically have limitations on the number of hours they can work per day and week. These regulations ensure that minors have adequate time for education and other essential activities outside of work. Moreover, child labor laws require employers in the construction industry to obtain work permits or parental consent for minors to work, and they mandate the provision of safe working conditions and appropriate training for young workers.

Learn more about Construction Laws Under FLSA through our detailed guide.

State Laws Regulating the Construction Industry in the US

State-level construction labor laws are regulations and statutes enacted by individual states in the US. While federal construction labor laws establish minimum standards nationwide, states have the authority to enact additional construction labor laws to provide additional protections or requirements for construction workers.

Construction employers and workers must understand and comply with state laws for the following reasons:

  • Legal compliance: Employers who fail to comply with state labor laws may result in fines, penalties, or legal actions.
  • Worker protections: State construction labor laws offer additional protections or benefits for construction workers on top of what is required by US federal law.
  • Contract compliance: Contractors working on state-funded construction projects must adhere to state prevailing wage laws and other requirements to remain eligible for government contracts.
  • Safety: Understanding state laws regulating workplace safety helps employers ensure a safe work environment for construction workers. This reduces the risk of workplace injuries or accidents.
  • Protect business operations: Compliance with state labor laws helps maintain good business practices, protect the company’s reputation, and avoid disruptions to construction projects.

Classification of Construction Workers in the US

In the construction industry, workers are classified as either independent contractors or employees. The International Revenue Service (IRS) has guidelines and criteria for determining worker classification. Proper classification of workers is significant as it helps determine various rights, benefits, and obligations for both employers and workers.

Independent Contractors

Independent contractors in the US operate as separate businesses and have complete control over their work methods and schedules. Independent contractors have their own tools, equipment, and resources and are not financially dependent on a single employer for their income.

In addition, independent contractors work under contracts or agreements that outline the terms of their services and are responsible for paying their taxes. The downside of being an independent contractor in the construction industry is not being entitled to employee benefits under labor laws and having limited legal protections.

Employees

Employees work under the direction and control of an employer and use tools and equipment provided by the company. Employees rely on their employer for regular income and often receive benefits. Employees are entitled to several protections under federal and state labor laws.

Properly classifying workers in construction is essential for compliance with labor laws, tax regulations, and worker protection statutes. It ensures that all workers receive fair compensation and benefits.

Here is a summary outlining the differences between independent contractors and employees in the US:

Characteristic

 Independent Contractor

Employee
Control and supervision Have autonomy over work methods and schedules. Work under employer’s discretion and control.
Financial dependence Operate as a business, not financially dependent on employers. Rely on employers for regular income and financial support.
Tools and equipment Have own tools and equipment. Rely on tools and equipment provided by the employer.
Benefits and protections Not entitled to employee benefits and protections under labor laws. Entitled to various benefits and protections under labor laws.
Contracts and agreements Work under contracts or agreements. Hired under employment contracts or agreements.
Tax withholding Responsible for paying their taxes. The employer withholds taxes
Legal protections Limited legal protections, not covered by most labor laws. The employer assumes liability for work performed.

Key Provisions of the US Construction Labor Laws Protecting Construction Workers

The following key provisions of the US construction labor laws ensure the protection and rights of construction workers, safeguarding against exploitation and promoting safe and fair working conditions.

Prevailing Wages

Prevailing wages represent the standard rates of pay and fringe benefits for workers within specific occupations, such as construction, in a given location. These rates are determined through surveys conducted by government agencies, ensuring fair compensation for construction labor. Prevailing wages are generally applicable to construction projects funded by the government or assistance, including public works projects and infrastructure development.

Noncompliance may result in penalties, contract termination, or legal repercussions. This underscores the importance of meticulous recordkeeping and proper worker classification to avoid violations and ensure adherence to prevailing wage laws.

Occupational Safety and Health Standards

OSHA standards set forth regulations to ensure safe and healthy working conditions in the construction industry. The regulations require construction employers to identify and mitigate workplace hazards, provide appropriate training and protective equipment to employees, maintain records of workplace injuries and illnesses, and comply with specific safety standards applicable to their operations. By adhering to safety and health standards, construction employers help prevent workplace accidents, injuries, and fatalities, promoting the well-being and safety of construction workers.

Minimum Wage and Overtime Regulations

Construction employers must ensure that their employees receive at least the minimum wage and overtime compensation as required by the FLSA. This includes accurately tracking employees’ hours worked, paying the appropriate wage rates, and maintaining records to demonstrate compliance with wage and hour laws.

Compliance with minimum wage and overtime regulations helps ensure that construction workers are fairly compensated for their labor and provides financial security for workers and their families.

Workers’ Compensation and Insurance

Workers’ compensation laws require construction employers to provide insurance coverage for employees who suffer work-related injuries or illnesses. Workers’ compensation benefits typically include medical expenses, lost wages, disability benefits, and vocational rehabilitation services for injured workers.

Construction employers are responsible for purchasing workers’ compensation insurance or self-insurance. This insurance protects construction workers by providing financial support and medical care in the event of a job-related injury or illness, reducing the financial burden on injured workers and their families.

Collective Bargaining and Unionization in the Construction Industry

Construction workers have the right to unionize and engage in collective bargaining with their employers to negotiate wages, benefits, and working conditions. The NLRA protects employees’ rights to join or assist labor unions, engage in collective bargaining, and participate in other concerted activities for mutual aid or protection.

Collective bargaining and unionization empower construction workers to advocate for better wages, benefits, and working conditions, promoting fairness, equity, and solidarity within the construction industry.

Importance of Compliance with US Construction Labor Laws

Compliance with labor laws is not optional; it is a legal requirement. Employers are obligated to adhere to federal and state labor regulations governing wages, hours, overtime pay, workplace safety, and other employment practices.

  • Protection of Workers’ Rights: Labor laws establish minimum standards for wages, working conditions, and safety protections, ensuring that construction workers are treated fairly and provided with a safe and healthy work environment.
  • Prevention of Exploitation: Compliance with labor laws helps prevent the exploitation of construction workers, including issues such as wage theft, misclassification of workers, and unsafe working conditions.
  • Risk Mitigation for Employers: Compliance with labor laws reduces the risk of legal liabilities, fines, and penalties for employers. Failure to comply with labor regulations can result in costly legal disputes, government investigations, and financial penalties that can harm a company’s reputation.
  • Worker Productivity and Morale: Workers who are treated fairly, compensated appropriately, and provided with safe working conditions are likely to be more productive and motivated. Compliance with labor laws contributes to a positive work environment, employee satisfaction, and retention.

Rights of Construction Workers in the US

Construction workers in the US are entitled to various rights and protections under federal and state laws. Some of the key rights of construction workers include:

  • Right to a Safe Workplace: Construction workers have the right to work in an environment free from recognized hazards that are likely to cause serious injury or death. Employers are required to comply with OSHA standards and provide appropriate training, safety equipment, and protective measures to ensure worker safety.
  • Right to Refuse Unsafe Work: Construction workers can refuse to work if they believe the work is hazardous, and employers cannot fire them for refusing to work in life-threatening work environments.
  • Right to Fair Wages: Construction workers have the right to receive fair wages for their labor. This includes being paid at least the minimum wage required by federal or state law, as well as overtime pay for hours worked over 40 in a workweek. Prevailing wage laws ensure that construction workers on government-funded projects are paid wages comparable to those prevailing in the local area.
  • Right to Collective Bargaining: Construction workers have the right to join or form labor unions, engage in collective bargaining with their employers, and participate in concerted activities for mutual aid or protection. The NLRA protects workers’ rights to unionize and negotiate with their employers over wages, benefits, and working conditions.
  • Right to Workers’ Compensation: Construction workers have the right to receive workers’ compensation benefits for work-related injuries or illnesses. Workers’ compensation provides medical treatment, wage replacement, disability benefits, and vocational rehabilitation to injured workers, regardless of fault.
  • Right to Non-Discrimination: Construction workers have the right to be free from discrimination and harassment in the workplace. Anti-discrimination laws prohibit employers from engaging in discriminatory practices.
  • Right to Job Security: Construction workers have the right to job security and protection against wrongful termination or retaliation for exercising their rights under labor laws. Employers are prohibited from retaliating against employees for reporting safety violations, filing workers’ compensation claims, participating in union activities, or engaging in other protected activities.
  • Right to Privacy: Construction workers have the right to privacy in the workplace, including the confidentiality of personal information and medical records. Employers must comply with privacy laws, such as the Health Insurance Portability and Accountability Act (HIPAA), to safeguard employees’ sensitive information.
  • Right to Safe Transportation: Construction workers have the right to safe transportation to and from work sites. Employers are responsible for ensuring that workers are provided with safe transportation options, such as company vehicles or reimbursement for travel expenses, and complying with traffic safety regulations.

Learn more about Construction Employees’ Rights & Responsibilities through our detailed guide.

Obligations of Construction Employers in the US

In the United States, construction employers have various obligations to ensure labor law compliance and maintain a safe and respectful work environment. Some of the key obligations of construction employers include:

  • Provide a Safe Workplace: Employers must comply with OSHA standards and regulations to ensure a safe and healthy work environment for their employees. This includes identifying and mitigating workplace hazards, providing safety training, and supplying appropriate personal protective equipment (PPE).
  • Comply with Wage and Hour Laws: Employers must adhere to federal, state, and local wage and hour laws, including minimum wage requirements, overtime pay regulations, and prevailing wage rates for government-funded projects. Employers must accurately track employees’ hours worked, pay them promptly and accurately, and provide required wage-related notices and disclosures.
  • Maintain Employment Records: Employers are required to maintain accurate and up-to-date records of employee information, including hours worked, wages paid, tax withholdings, and other employment-related data. This information may be subject to inspection by government agencies or auditors.
  • Provide Workers’ Compensation Insurance: Employers must provide workers’ compensation insurance coverage for employees to protect them in the event of work-related injuries or illnesses. Workers’ compensation benefits typically include medical expenses, lost wages, disability payments, and vocational rehabilitation services for injured workers.
  • Respect Workers’ Rights: Employers must respect the rights of their employees, including the right to join or form labor unions, engage in collective bargaining, and participate in other protected activities under the NLRA.
  • Prevent Discrimination and Harassment: Employers must comply with anti-discrimination laws by providing equal employment opportunities and prohibiting discrimination and harassment based on protected characteristics.
  • Comply with Immigration Laws: Employers must comply with federal immigration laws and regulations, including verifying the employment eligibility of their workers using Form I-9, and refrain from hiring unauthorized workers.
  • Stay Informed and Up-to-Date: Employers must stay informed about changes in labor laws, regulations, and industry standards that may affect their business operations and take proactive measures to ensure compliance with applicable legal requirements.

Common Violations of Construction Labor Laws in the US

Construction workers may violate construction labor laws due to various factors, including lack of awareness and resources, cost-cutting pressures, resistance to change, inadequate enforcement, or intentional misconduct. These violations can lead to worker exploitation, unsafe working conditions, unfair labor practices, and legal liabilities.

Some of the common violations of construction labor laws in the US are:

  • Misclassification of workers: Employers may incorrectly classify workers as independent contractors instead of employees to avoid providing benefits (e.g., overtime pay, minimum wage, and workers’ compensation).
  • Failure to pay prevailing wages: Contractors on state-funded projects may underpay workers by failing to comply with prevailing wage requirements mandated by the Davis-Bacon Act.
  • Wage theft: Some employers withhold or deduct wages unlawfully, pay workers less than the US minimum wage, or do not pay for all the hours worked.
  • Failure to provide required breaks: Although the federal law does not require rest and meal breaks, some states in the US have break laws (e.g., California break law).
  • Overtime violations: Construction workers working beyond 40 hours per week are eligible for overtime pay. However, some employers fail to comply with the mandated federal overtime laws.
  • Safety violations: Employers are required to provide safety regulations as construction sites are considered hazardous work environments. However, there are instances where there is a lack of proper protective equipment (PPE), inadequate safety training, and failure to implement safety protocols.
  • Child labor law violations: Young workers can work in the construction industry, but there are regulations in place to ensure their safety and well-being. Minors under the age of 16 have restrictions on the types of tasks they can perform and the hours they can work, while those aged 16 and 17 may have fewer restrictions but still must adhere to certain rules to protect their safety. In addition, employers are required to obtain work permits or age certificates for minors before they can work in many states. Failure to obtain work permits and allowing minors to operate prohibited machines are violations to child labor law.
  • Noncompliance with licensing and certification requirements: Some contractors and subcontractors illegally operate without the required licenses and certifications required by state and local authorities.
  • Retaliation against whistleblowers: Employers must not retaliate against employees voicing out their concerns or going against illegal practices. Retaliation against employees who report labor law violations may include penalizing, demoting, or firing them.
  • Failure to meet documentation and recordkeeping requirements: Employers in the US are required to keep accurate records of their employees’ work hours, wages, and other relevant information. Failure to comply can result in violations and penalties.

These violations can lead to worker exploitation, unfair labor practices, unsafe working conditions, and legal liabilities. To avoid committing workplace violations, employers must increase their awareness of federal and state labor laws, particularly in their industry.

Important Cautionary Note

When making this guide we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this guide. We do not accept any liability for any damages or risks incurred for use of this guide.