Construction

• Jurisdiction: United States,Federal
• Law Firm: Seyfarth Shaw LLP
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Real Estate and Construction, Contracts and Commercial Law, Arbitration & Dispute Resolution, Construction & Planning
• Author: Mr Jason N. Smith and Edward Arnold
• Published date: 23 May 2023

1. Is your jurisdiction a common law or civil law jurisdiction?

The United States is a common law jurisdiction. The common law in the United States is comprised of both state specific rulings as well as federal jurisprudence. The federal courts are comprised of the United States district courts, courts of appeal and the U.S. Supreme Court. Each state has its own unique judicial system typically with courts of common jurisdiction, appellate courts and a final appellate court that issues final rulings on state law. As a common law country, the courts in both the federal and state systems rely upon prior rulings when deciding disputes or interpreting statutory language.

The sole exception is Louisiana, which is a civil law jurisdiction. As a result, judges in Louisiana are supposed to rely upon interpretation of the civil code when deciding matters. Louisiana is the only civil law jurisdiction in the United States.

2. What are the key statutory/legislative obligations relevant to construction and engineering projects?

Statutory and legislative obligations applicable to construction and engineering projects vary by state. Most local jurisdictions have zoning and building code obligations with which each project must comply. In addition, every project must comply with federal and state Occupational Health and Safety Administration (OSHA) requirements, which are described in more detail below. Federal law mandates performance and payment bonds on all federal project. Most states have similar bonding requirements for state projects. As discussed below, there are also several substantial employment statutes that govern employment on construction projects.

There are numerous other statutory obligations related to construction work in the United States, many of which are discussed below. Engineers, in particular, need to be aware of state-specific statutes governing the practice of engineering in each state.

3. Are there any specific requirements that parties should be aware of in relation to: (a) Health and safety; (b) Environmental; (c) Planning; (d) Employment; and (e) Anti-corruption and bribery.

The Federal Occupational Safety and Health Act, 29 U.S.C. Sec. 15 (1970) extends to all employers and their employees in all 50 states, the District of Columbia, Puerto Rico and other territories under federal jurisdiction. The law was enacted to ensure worker and workplace safety, with the intent to require employers to provide workplaces free from recognized hazards to safety and health, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold or unsanitary conditions. The law is enforced by the Occupational Safety and Health Administration (OSHA), which is a division of the U.S. Department of Labor.

OSHA has enacted numerous regulations governing health and safety for construction activities. Any entity performing construction work within the United States or its territories must comply with OSHA regulations governing construction safety. See 29 CFR 1926. The OSHA standards for construction govern a diverse range of safety and health issues from safety training and education, to the types of personal protective and life safety equipment required. Careful review and compliance with these regulations is important, as substantial fines can be assessed for non-compliance.

In addition to OSHA, many states have enacted their own occupational safety and health laws. For example, Maryland has adopted the Maryland Occupational Safety and Health Act (MOSH Act) for all non-federal projects within the State of Maryland. Under the MOSH Act, all employers are required to comply with health and safety regulations adopted by the Maryland Department of Labor, Licensing, and Regulation ' Division of Labor and Industry. These regulations closely mirror the Federal Occupational Safety, but include a number of distinct substantive regulations. Failure to comply with MOSH regulations can result in significant daily penalties as well as criminal liability for willful violations.

Maryland is not unique. Many other states, such as Alaska, California, Hawaii, Indiana and the District of Columbia also have state health and safety plans governing construction projects. Knowing and understanding the obligations imposed upon employers through these regulations is critical to avoiding costly penalties that can undermine the success of a construction project.

Construction projects involving clearing, grading, excavation or demolition may require compliance with federal environmental regulations. In addition, if the Project will involve dredging or the discharge of fill material into a waterway or wetland specific sections of the Clean Water Act apply and strict compliance with those sections is required. Additional requirements under the Clean Air Act may apply to heavy-duty trucks used for construction and may require regulation of dust emissions at your construction site. Other requirements apply to the use of hazardous materials as well as to requirements mandating reporting of any spill of a hazardous chemical.

Most of the environmental requirements applicable to U.S. construction projects are regulated by the United States Department of Environmental Protection (US EPA). The US EPA has, however, delegated authority to states to regulate certain aspects of the Clean Air Act as well as other regulatory programs. Fines for non-compliance with environmental regulations can result in civil penalties and in some circumstances, even criminal liability.

As noted below, most jurisdictions have land use and zoning laws that must be adhered to. Knowing the applicable zoning laws and allowable uses for your property prior to commencing design and construction is imperative. Failure to comply with applicable zoning or land use laws can result in fines and, potentially, demolition of non-conforming work. Typically, these issues are addressed during the permitting phase of the project. At that stage the local permitting authority reviews completed construction drawings for compliance with building codes and land use and zoning laws prior to issuing a construction permit.

In the United States, there are numerous requirements that govern employment relationships for construction. For example, when performing construction work in the United States, it is common to encounter union labor. Special legal requirements apply when union labor is used. Even if union labor is not used, however, there are several other employment requirements applicable to construction projects.

In 1935, the National Labor Relations Act (NLRA) was passed in the United States. The NLRA provides the framework and foundation for collective bargaining between unions and employers. Collective bargaining is the process by which an employer and a union negotiate wages, benefits and other terms of employment. The NLRA is administered by the National Labor Relations Board (NLRB). The NLRB has exclusive jurisdiction over certain labor disputes between an employer and a union including the right to investigate unfair labor practices, levy charges, bring cases and issue enforcement orders. The nuances relating to the use of union labor in the United States could fill an entire chapter of its own. Understanding the requirements imposed by the NLRA and the implementing regulations promulgated by the NLRB, however, is important if union labor will be used during any aspect of the construction process.

Other major employment laws applicable to construction in the United States include the Fair Labor Standards Act and corresponding state laws (e.g., Maryland Wage and Hour law), state wage payment and collection laws and the Davis-Bacon Act.

The Fair Labor Standards Act (FLSA) is a federal law that mandates minimum wage, overtime pay and youth employment protections. While the FLSA does exempt some employees (e.g., certain executive, administrative and professional employees) construction workers are typically non-exempt and covered by FLSA. As a result, construction employees are entitled to be paid at least a federal minimum wage as well as time and a half for all hours worked over 40 in a work week. Many states have also enacted their own wage and hour laws that are applicable to most construction employees. Maryland, for example, requires employers to comply with state minimum wage laws and provides an employee with a private cause of action against an employer for violating the law. Numerous other states have enacted similar laws. Failure to comply with FLSA or applicable state laws can result in significant penalties, significant damages, and in some instances having to pay the legal fees incurred by an employee to recover his or her wages.

Finally, the Davis-Bacon Act, and its corresponding regulations, mandates the wages paid for work performed on any federal construction project. The Davis-Bacon Act applies to all federal government or District of Columbia contracts in excess of $2,000 for the construction, alteration, or repair of public works. See 49 U.S.C. Sec. 3141-3148. Under the Davis-Bacon Act, all contractors and subcontractors are required to pay workers in accordance with the wage rates set by the Secretary of Labor. If a contractor fails to comply with the Davis-Bacon Act, the government can withhold payments due to the contractor under the contract. As with wage and hour laws, many states have enacted laws similar to the Davis-Bacon Act requiring contractors and subcontractors to pay prevailing wage rates on state construction projects.

The United States Department of Justice (DOJ) aggressively prosecutes bribery and corruption both within the United States and globally. The principal U.S. law governing bribery and anti-corruption is the Foreign Corrupt Practices Act (FCPA), 15 U.S.C. Sec. 78dd-1, et seq. In addition, 18 U.S.C. Sec. 201 makes bribery of public officials and witnesses in the United States a crime.

Pursuant to 18 U.S.C. Sec. 201, it is...