Avoiding Compliance Issues in Construction
Construction is a heavily regulated industry with laws surrounding many topics. These include safety, insurance regulations, building codes, wage and union payroll requirements, contractual agreements, and much more. Additionally, some large construction projects are completed over the course of months or years. Accordingly, these projects involve more teams and collaboration than short-term projects. Managing the entire process in a way that ensures every worker follows the required regulations is a challenge. As a result, each of these processes must be properly documented.
Contractors and subcontractors are aware of the many regulations that must be followed in the industry. They know failure to comply with construction regulations can take many forms. These range from inefficiency to serious injury or expensive fines. For example, inefficiencies like rework, missing data, and conflict resolution cost the construction industry more than $177 billion each year. Indeed, the cost of more serious compliance issues can bring a project to a screeching halt, or lead to a hefty lawsuit.
How to Avoid Compliance Issues
Facing compliance issues can lead to serious injury, fines, penalties, and even the loss of your business. Don't wait for disaster to strike. Instead, maintain compliance standards so issues never arise. Use these tips help you recognize potential risks and dangers.
Identify Red Flags
Compliance issues don't happen out of the blue. Certain behaviors and habits cause non-compliance. As such, there are usually signs that something isn't right with a worker or company. By watching for red flags, you can recognize poor behavior or other warning signs.
- Frequent changes in management or other personnel
- Repeatedly getting behind schedule
- Poor communication
- Deviating from the plan with authorization
- Improper use of equipment
Use Trustworthy Subcontractors
An easy way to avoid untrustworthy contractors is by building a network of contractors and subcontractors you trust. Creating a professional network in the industry is essential when you must rely on multiple teams to follow stringent safety measures. As a general contractor, it's your responsibility to hire professionals you can trust. When vetting subcontractors, taking certain steps can help you learn about their work history and credentials.
You should be familiar with state regulations and any credentials subcontractors are required to carry. Before working with a subcontractor, double-check these credentials to ensure they are up to date. Then check if they are compliant with state and local laws, and carry the proper insurance. If you get the opportunity, you can also visit the job site where a new contractor is currently working. Visiting a job site gives you first-hand knowledge of how a team follows safety procedures, handles tools, and cares for the property where they work.
Before working with a subcontractor you're unfamiliar with, it's important to get a good idea of their work history. Don't be afraid to ask for references and referrals. Obtaining information from three references will give you a well-rounded view of your potential partner.
Know your State Laws
State laws dictate the rules you must follow to maintain compliance in the construction industry. As a general contractor or project manager, you must know the laws of the letter and what each involved party is responsible for upholding. Regulations change from one year to the next. Accordingly, all project managers must submit the proper documentation in the event of a compliance check or any event when compliance issues arise.
Some common regulations in the construction industry include:
- Contractual agreements between owners, contractors, and subcontractors
- Building codes
- Insurance and bonding requirements
- Credit and background checks
- Wage and union payroll agreements
- Safety requirements
- Lien requirements
- Employee requirements
Most safety standards are put in place by the Occupational Safety and Health Administration (OSHA) and are uniform throughout the country. Building codes, insurance requirements, and bonding regulations can vary by location and may be more difficult to recognize. Finally, to maintain proper compliance, general contractors should always check with the relevant authorities in the city and state of the project.
Use Software to Track Documentation
Construction is one of the most heavily regulated industries that exist. On top of regulations, the process of completing a long-term project requires an astronomical paper trail. However, this trail ensures everything is done properly and every worker is paid accordingly. Accordingly, you need a dependable documentation system to keep it organized.
For most construction companies, a reliable system for keeping up with compliance data means ditching the paper and filing cabinet system for newer technology that offers access to all relevant information at a moment's notice. Similarly, construction tech evolves rapidly. Now, companies use different types of easily integrated software to address various problems in the industry. This solves issues like billing delays and compliance issues. For example, Flashtract's construction billing software can easily be used alongside compliance software like Safesite, myComply, or KPA.
How does the new software benefit companies?
With the use of compliance software to track documentation, companies can eliminate lost paperwork, human error, and improper filing that can lead to poor compliance practices. The software also works to automate repetitive tasks that take up valuable time that could be spent completing important tasks. Compliance software can manage documents, set up compliance alerts, and keep documentation up to date. By streamlining the processes and access to information, remaining compliant becomes an automatic process your company can depend on. Handling compliance issues becomes much easier. The software provides documented answers at compliance managers' fingertips in seconds.
Moreover, ensuring your contractors' documents are up to date and meet state & federal expectations is critical to success. Furthermore, it's not just one project's success, but your whole company's. Ultimately, uninsured or not-certified contractors can ruin your business as a whole when you deal with the fallout.
In summary, it is possible to consistently meet compliance standards. For many high-performing construction companies, new technology is an important part of the equation. Keeping in compliance is a matter of setting good habits from the field to your software.
Lastly, if you want to learn more about how construction technology can improve the way your company gets work done, contact the construction billing software experts at Flashtract today.