Utility & Transportation Contractor August 2022

Utility & Transportation

50 Years Of Supply and Service

contracTOR

JESCO, Inc.

august 2022

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C0n9ratulations JESCO on 50 Years of Success! & Signs and Safety Devices on 15 Years of Success!

We Build ...

For over 50 years, Earle has been serving the region's heavy civil construction needs. Earle specializes in public and private contracting, including heavy highway construction, milling, paving, underground utilities, and site work along with manufacturing, recycling, and transportation of construction-related materials.

president’s message

From the desk of: Roly Acosta “Mucho ojo, mucho cuidado, y no vallas a meter la pata” ~Cuban decho My maternal grandfather shared that saying with me his entire lifetime. I heard it every time I left the house as kid, every time I got behind the wheel of the car, every Wednesday I spoke with him while in college, and the very moments before my wedding. To this day, I hear his voice and those words when I walk out the door each morning. Plainly translated the saying reads, Lots of Eyes, Lots of Care, and Don’t Stick Your Foot in It. Allegorically translated, the message directs you to be mindful of your surroundings, be cautions of your actions, and whatever you do, don’t screw up!

No better life lessons from Abuelo!

The saying serves as a guide about maturity, wisdom, and common sense. I once read that maturity is knowing you made mistakes.

Wisdom is knowing you will make mistakes.

Common sense is knowing you should not make a mistake right now! How many of us benefit from experiencing those three phases of knowledge—in life, at work, and at home? How many of us know someone that would greatly benefit from improvement in either of those three phases? No need to shout the name! We all needed to experience those three phases of knowledge to find our way to success.

I can smell 50, our family company turns 45 next year, and the UTCA is firing on all cylinders as she approaches 60. We do not reach these ages and success without maturity, wisdom, and common sense. The knowledge triumvirate guides our members like JESCO to a milestone of 50 years in business and Sign & Safety Devices to an accomplishment of 15 years. We celebrate them for learning from their mistakes and being mindful of their surroundings, knowing how to manage future mistakes and being cautions of their actions, and not making a mistake at an inappropriate time and screwing up! The OG Rolando was wise beyond his years; I just wish I appreciated it more while he was alive.

It is hard to believe this is my last President’s Message to the UTCA membership. I am truly grateful and very much appreciate the opportunity to share my thoughts with you on these pages over the last year. I loved reading “The Life of Reilly” on the back pages

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of Sports Illustrated and I was inspired to develop deeper thought from our industry as Rick Reilly did with sports fans. I cannot compare my musings to those of a prize-winning author, but I hope I prompted thought and advocacy from the most motivated, innovative, and inspiring group of people I know. The future of construction in New Jersey is in great hands with UTCA members and staff.

I am excited that incoming President (and fellow Tiger) Glenn Ely begins his term in the fall with a blank President’s page to share his thoughts. He is an awesome leader and very passionate about our industry. Our bi-weekly Friday conversations were very supportive and meaningful, and I have his back every step of the way as does the Board, Staff & Membership.

As I exit the role of President, I get to concentrate my efforts on leading the UTCA’s FiveYear Strategic Plan and Constructing a Better New Jersey together. Maturity, Wisdom and Common Sense developed the plan and our Strategic Goals. It is important to remain mindful of the UTCA’s focused effort throughout the year: • Grow the State and Regional Infrastructure Construction Market • Support and Accelerate the Work • Develop the Workforce of the Future • Expand UTCA’s Voice and Value • Strengthen Collaboration with Fellow Associations and Industry Partners • Strengthen the Organization I REALLY enjoyed my time as your President, and I look forward to seeing you in Atlantic City!

Stay healthy and safe,

Roly

CONTENTS

Cover story 50 jesco, inc 50 years of supply and service

50

DEPARTMENTS

FEATURES

2 7 15 23 33 41 71 81

62 commitment to customer service drives signs & safety

President’s Message Financial Overview Legal Dig

devices

Accounting Corner

NEWS

Legislative News

91 one missed step or deadline under the ppa will cost you

safety perspective labor relations

97 health plan transparency

the pipeline

Published Bimonthly During 2022

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Utility & Transportation Contractor | august | 2022 3

By: michael h. meyers, partner, mountain hill investment partners

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e’ve been on the road visiting corporate 401(k) clients recently, holding group education meetings for employees. These meeting take different shapes, agebased, lunch and learns, and most recently, our live Q&A sessions. For the Q&A sessions, my business partners and I have a moderator run through a list of questions in the hopes of getting an interesting, seat of the pants view on a wide range of topics.

The format works well, and participants enjoy it as it creates an interesting debate style back and forth that keeps attendees engaged. Afterward, the floor is opened for live questions from the audience.

What you notice after several of these meetings is that most employees are thinking about (or worried about) the same things. I thought it would be interesting to share some of the most common questions we’ve fielded in the last few months and our responses.

How long do you think this market correction will last?

As of right now, the total return of the S&P 500 is -18.20%. That’s a significant loss in a period of six months and investors feel it markedly. If we widen the lens to a five-year time frame, however, the same index is +48.29%, the annual equivalent of +10.34% per year. That’s very much in line with the average market return of the S&P 500 over the last 30 years which is +10.72%. But getting back to the original question, no one knows for sure how long or deep a market correction will be, but if we can add some historical context to the conversation, we can level our expectations. According to J.P. Morgan Asset Management, despite average intra-years drops of -14% in the S&P 500 going back to 1980, annual returns were positive in 32 of those 42 years, or 76% of the time. The main takeaway here is, corrections happen often, but if we change our mindset to: how

can I take advantage of this, rather than worrying about how long it will last, the outcome can be positive.

Should I make changes to my investment allocations now, given the market environment?

The answer to this question begins with understanding of where you are in your planning process. Do you have a plan? If you’ve already sought out advice, discussed your risk profile and time horizon, and created an asset allocation that is appropriate for you considering those parameters, then you shouldn’t make any changes. If you haven’t made a plan yet, start there. Once that process is complete, you can compare your outcomes against how your allocations look currently and make necessary changes.

Financial overview

what's on your employees minds?

Are we heading for a recession? Are we in one already?

We’re not in a recession yet in my view, though we’re always heading for the next one. And there are red flags to be mindful of. The labor market is showing signs of a slowdown: layoffs, hiring freezes, and a drop in job openings specifically. Also, recent data (manufacturing PMI) shows employment in the manufacturing and services industries is slowing. I think most people equate poor stock market performance directly with recessions and it doesn’t tell the full story.

According to Forbes magazine, the S&P 500 rose an average of 1% during all recession periods since 1945. This is because stocks are a leading indicator, markets typically top before the start of a recession and bottom before the end. In other words, investors are going to be feeling better about their 401(k) balances before they feel better about the overall economy.

If I am nervous about the market, should I stop contributing, or go to cash?

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Financial overview

No…As a long-term investor, you should be taking advantage of market corrections by continuing to make deferrals to the 401(k). If anything, times like this are when you should be thinking about increasing your savings rate.

Contributing to a 401(k) is a form of dollar cost averaging, this is the practice of investing a fixed dollar amount on a regular basis; this is true whether markets are moving higher or lower. Look to take advantage when they’re moving lower! The chart below offers further evidence that you should consider. According to J.P. Morgan Asset Management, a portfolio valued at $10,000 on January 1, 2002, that remained fully invested through December 31, 2021, grew to $61,685. If you missed just 10 of the best days in the market during that time frame, the same $10,000 only grew to $28,260!

Should I be contributing to the Roth or traditional 401(k)? What are the benefits of each?

The main difference between the Roth and the traditional 401(k) is the tax treatment of the contribution. Would you prefer to pay the tax now or later when you begin taking distributions? Roth contributions are made with after tax dollars; the massive benefit here is those contributions and earnings are tax free after age 59 ½. The traditional 401(k) contributions are made with pre-tax dollars, so you’ll get a tax break up front. These funds grow tax deferred until you withdraw them, at which time you’ll pay federal taxes, and state taxes if applicable. For younger participants in lower tax brackets, the Roth is generally an easy decision to make.

The tax deduction from a traditional 401(k) probably offers little benefit to them, and they have the time it takes for those funds to compound and make up for the initial tax bite. For participants closer to retirement and in higher tax

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brackets, the deduction of the traditional 401(k) is likely more beneficial. There also may not be enough time for those dollars to compound to make up for the upfront tax hit of a Roth contribution. In any case, it’s a personal decision that requires some thought and planning.

The good news is that for those in the middle ground, or anyone with a different view for that matter, you can hedge your bet in a couple ways. What many people don’t know is that a company cannot contribute to a Roth 401(k) for an employee. Let’s assume a company offers a 401(k) match for employees which is a 100% match on the first 4%, this is a common example. The employee has no choice as to where the employer contribution goes but they have full autonomy for their part. In this scenario, taking advantage of the Roth for their own contribution offers some tax diversity later in the distribution phase. For employees in a plan that doesn’t offer an employer match, they can split their own contribution between the two and arrive in a similar spot.

Having a robust education program in place for your employees is critical to driving participation and engagement. My firm works as an advisor and co-fiduciary to corporate 401(k) plans, specializing in the construction industry. We work with many UTCA member firms to enhance their 401(k) offering by vetting service providers, lowering costs, and building education programs with these types of meetings. A 401(k) plan is an employee benefit, make sure employees who put their hard-earned money into your plan understand how to use it.

Contact me, Mike Meyers, at (732) 291-3338 or mikemeyers@mhipartners.com for more information and to schedule a plan review.

Disclaimer: Mountain Hill Investment Partners is an SEC Registered Investment Adviser. We have a clearing and custody relationship with Fidelity Brokerage Services LLC, Member NYSE/SIPC.

By: nicholas A. sullivan, esq., florio, perrucci, steinhardt, cappelli, Tipton & Taylor LLC

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n the construction business, it is a commonplace occurrence for a single contractor to operate two entities. In this context, one of the entities may perform work under a collective bargaining agreement and the other entity will perform similar work but does not operate under a collective bargaining agreement, also known as an open shop. This situation is not prohibited by law, but it can cause a variety of challenges for the contractor. Under the law, the two entities must remain separate and distinct entities because if they are not, the National Labor Relations Board (NLRB) or a court of competent jurisdiction (court) may find the two companies are operating as a single entity, or that the open shop is an alter ego of the union affiliated entity, and should be bound to the terms of the collective bargaining agreement.

Advantages and Disadvantages of the Two Entities The main advantage of having one entity operate under a collective bargaining agreement and another entity to operate as an open shop is the ability to profit from both union and non-union projects.

A disadvantage is that both entities face potential liability in terms of Employee Retirement Income Security Act (“ERISA”) contributions. If the open shop is not properly separate and distinct from the union affiliated entity, the open shop could be held to the terms of the collective bargaining agreement including, but not limited to, paying welfare, health and pension benefits, insurance coverage, and other terms and conditions under the collective bargaining agreement.

Steps to Maintain Separateness of the Two Entities The challenge for such a firm operating two entities is maintaining the separateness of the two entities. In order to maintain the required separateness, it is recommended that the construction firm should have different individuals serving as officers, on the board of directors, and as upper management for each entity. This includes having different individuals in charge of labor relations for each entity and each entity should establish its own compensation and benefits, employment practices, handbooks, safety rules, and training practices. This requires each entity to hire its own employees and maintain distinct resources for each entity, including equipment, licenses, certifications, bylaws, and agents. Further, each entity should have its own office space, administrative staff, payroll accounts, and each entity should file its own separate tax returns.

Further, the two entities must be separate in their finances with

their own separate bank accounts, lines of credit, personal guarantors, bonding, insurance requirements, financial records, financial professionals, and the two entities should not comingle funds. Finally, the two entities should have different contact information, such as phone numbers, addresses, email addresses, and each should use its own letterhead.

Legal Dig

a tale of two entities: maintaining separate and district entities

This does not guarantee that the NLRB or court will find that the entities are sufficiently separate, but these steps increase the likelihood that each entity is found to be separate and distinct from the other entity.

Legal Determination if Entities are Sufficiently Separate and Distinct The NLRB, or a court of competent jurisdiction, will use one of two legal tests to determine whether the two entities are sufficiently separate and distinct.

The “single employer test” is used when the two entities run parallel operations. Four factors are reviewed when the “single employer test” is considered by the NLRB, or courts. The four factors that will be considered are common ownership of the entities, the interrelations of operations of the two entities, the common control of labor relations between the two entities, and common management personnel between the two entities.

The “alter ego test” analyzes the extent that the two entities have identical management, business operations and purposes, equipment, customers, board of directors, and officers.

If a court or the NLRB finds these factors weigh against the entities, either could determine that the two entities are not sufficiently separate and distinct. If this finding is made, this could have significant ramifications, legal and financial, for both entities involved, including the open shop being required to comply with the terms and conditions of the union-affiliated entity’s collective bargaining agreement.

Conclusion This two-entity business operation is beneficial due to the ability of the firms to obtain the opportunity to perform work for union and non-union affiliated projects. However, the owner must be aware of the inherent legal risks of a two-entity business operation and must ensure that these entities are two separate and distinct entities. This is necessary to avoid, or withstand, any legal challenges before the National Labor Relations Board or court of competent jurisdiction.

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abnormal times call for normal habits By: william c. mcnamara, cpa, ccifp, the curchin group

Communicate, Close, Collect, Cash A healthy company starts with liquidity. We should have sufficient cash flow to meet the demands of our business cycle.

The oldest axiom in business is, “Cash is king.” The first step in building cash flow is the collection of our trade receivables.

Let’s make sure our receivables are current and our turnover is healthy. Review collection policies and double-check that you’re adhering to those principles. Any open receivable that is identified as lagging, slow or frightfully old should be immediately identified for action. Those actions would include the re-evaluation of credit terms, based on the fact and circumstances known.

Communication of aging receivables is important, so don’t be afraid to make calls or mail out some gentle reminders to spur collection efforts.

Job close outs are extremely important as well for collections.

Sometimes, small open items allow customers to leverage against the timely payment of a significantly large invoice. In my own practice, it drives me nuts. We work the schedule every two weeks (which is sometimes too big of a gap), and I harp on closing out engagements relentlessly. I know the longer the project is open, the less profitable the firm will be. Gathering the list of open items and addressing them sooner rather than later is a must. I often push back the start of new projects so my team is focused on closing out the older ones. I don’t want to become a juggler with too many balls in the air. One is going to hit the floor and it will take even more time to fix the issue. Time is something we can never recover.

Don’t Sleep on Debt Across the aisle from our cash and receivables sits our debt. It may be in the form of trade payables or long-term notes used to

acquire an asset such as equipment. But there it sits, and we cannot ignore it, no matter how hard we try. We must attack with an aggressive plan to meet terms as quickly as we can without interrupting our own cash flow model. Sometimes that model is supported by working lines of credit (LOC), which bring an even greater significance as to how they are handled. We should work with our trade partners and identify opportunities to discount the amount due or extend the time for payment to better align with the collection of our own jobs’ completeness. LOCs are a significant tool available to assist in cash flow needs.

Reviewing the criteria and conditions of the LOC agreement is a significant responsibility. Your primary accountant/controller should mark this as a high priority item and plan for discussions with your lending institution well before we reach the renewal date. Mid-year, a test of any required debt covenants should be calculated to be sure that we are on course to meet them, and the line is being utilized as intended. An LOC that shows several significant borrowings and repayments is viewed much more favorably than a single draw request not matched by any re-payment schedule.

Accounting Corner

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ere we are in the middle of 2022, our businesses having fended off some serious disruptions in the past 24 months. Business owners have battled through COVID-19, supply chain interruptions, inflation, fuel increases and rising interest rates. The construction industry has been exceptionally hard-hit by all the above. Many of these disruptions will linger a little bit longer, unfortunately. If we want to continue to survive, we must keep going back to the core focus of our business operations. These check-ups are what made your company strong enough to fight off the onslaught, so take a deep breath and repeat these best practices.

Revisit Goals Once both sides of our books have been evaluated, we can start to measure the results. Has the company’s working capital structure improved since year end? Have we made measurable progress on company wide financial goals? Are we holding performers to the standards we have previously outlined? Can we identify cost savings to improve our performance against future budgeted results? What adjustments for the second half of the year need to be considered? What new opportunities have arisen and how are we planning on capturing them? We identify goals at the start of the year and should not wait for the year to expire without checking in on their progress. Being constructively critical of our own results improves the chances of success.

Things You Can’t Control, But Can Overcome Labor shortages and out-of-stock materials currently frustrate contractors the most. There are no easy or cheap answers for either problem. When you have identified good employees, make sure they know it. Do what you can to reward them and not just annually. Pay attention to your employee morale, as your workplace culture has a big impact on employee satisfaction. While money is a driver, the average employee considers changing jobs

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Accounting Corner

when they first begin to dread coming to work. That’s even true for a remote employee’s feelings. Train, cross train, and challenge—three principles that will keep those employees with skills satisfied. Investing back into an employee provides a tangible mark of value and belief in them. Cross training allows them to become more diverse and ignites a sense of ownership in what they are held responsible for. Challenging an employee to rise to a goal or develop a new course of action gets critical buy-in.

They want the company to succeed because of their developed sense of investment.

The supply chain issues are demonstrating cycler tendencies and when one is corrected another raw material becomes scarce.

Keep future pricing in check by adding cost escalation clauses to your contracts. Surcharges are becoming more common in this economy and should be a significant discussion point in any negotiations of the job bid. Speak with your own estimators and make sure they have current pricing and information. Review these critical calculations before submission, with at least two sets of eyes on all these inputs.

Where the Rubber Meets the Road Capital acquisitions are also a critical piece for year-end planning. They are a component of growth, tax planning, and in many cases, a cost reducer. The benefit of having the right tool for the job is efficiency. We operate more efficiently when equipment repairs are not impacting the project timeline. We operate more efficiently when normal tasks are completed on time and resources are not diverted from other directions. It allows us to deploy both human and equipment resources with confidence and execute at the most beneficial capability. Evaluating our equipment needs is an ongoing task but should be coordinated

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with year end tax planning. The tax code still allows the accelerated depreciation of equipment placed in service, which provides a great first-year return on the investment. A traditional C-Corporation saves 21% off the original cost of the asset when calculating the after-tax purchase cost of just one new asset.

Think of that discount when shopping and investing back into your business.

We do all these great things and then the bill comes! Yes, the tax man needs to be paid. But does it have to sting? No, if as part of your review and planning you consider techniques that allow deferral of income to later periods or accelerate expenses into the current tax period. We discussed accelerated depreciation benefits, but we can also highlight items like profit sharing contributions, R&D tax credits and 179D deductions. All are tools available to defer taxes due into future tax periods. At the start of the year, many tax professionals were concerned about tax law changes and their impacts. The focus may have shifted, but it’s only a matter of time before these topics return. For now, we have these favorable tax treatment items at our side. Tax reform, as it’s touted, may not appear in the headlines until after midterm elections or in Q1 of 2023. We can end the year confidently using the rules and strategies we followed in 2020 and 2021. We should have a blueprint from those periods that can be dusted off, updated, and built upon.

The world has proven to be not just complicated, but rapidly changing and challenging. By stepping back and measuring the basics, we can stay business healthy. It’s critical to be prepared and flexible to change and adapt. It’s crucial to stay fresh with your trusted advisors, bankers, lawyers, insurance agents, and accountants. If they have not already scheduled with you, schedule with them today.

legislature wraps up whirlwind session ahead of summer recess By: ryan sharpe, director of government affairs and communications

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efore embarking on its traditional summer recess, the New Jersey Legislature engaged in a flurry of last minute activity on a number of bills affecting the construction industry.

While the record $50 billion budget was intensely debated, the key budget takeaway for the construction industry is the inclusion of an additional $800 million for infrastructure projects. This includes $300 million for water infrastructure that UTCA worked directly with our labor partners, the Operating Engineers and the Laborers, to have allocated from the COVID relief funds.

As well, an additional $2.9 billion was allocated to state agencies, including $230 million to the New Jersey Department of Transportation (DOT) to support capital projects. Moreover, we are pleased to report that an additional $900,000 was appropriated for staff at the New Jersey Department of Environmental Protection (DEP) which, according to the Governor’s Office, will be used to support the New Jersey Infrastructure Bank. It is important to note that this funding is on top of the monies allocated to New Jersey in the federal Infrastructure Investment and Jobs Act (IIAJ).

Another important development in June was the enactment of legislation to address the tremendous increases in material costs experienced by the construction industry. UTCA worked directly with the DOT and legislators to address cost escalation and supported the passage of a law that provides $10 million to adjust DOT contracts in which material acquisition costs have increased by more than 5%.

In addition, we are working with lawmakers to craft legislation to expand this program and we thank Senate Transportation Committee Chairman Pat Diegnan for his efforts and cooperation in working closely with UTCA staff on this important issue.

Another UTCA-supported measure that became law increases the spending limits of the New Jersey Transportation Trust Fund (TTF) by $600 million. This initiative will allow the TTF to utilize additional bonding capacity to provide funding for more critical infrastructure projects.

UTCA was also instrumental in the passage of a measure that delays the deadline for contractors who perform soil and fill recycling services. Under the so called “Dirty Dirt” bill, the July, 2022

While there are many positive developments coming out of Trenton, not all the news is good. UTCA has been monitoring and engaging with lawmakers on several pieces of legislation that would negatively affect many contractors.

For instance, we were able to work with our industry partners to head off an effort to require the use of low-carbon or “green” concrete which would likely increase material costs. Instead, this legislation was amended to offer a tax incentive for using low-carbon products.

Another bill that cleared a committee would increase insurance premiums by raising the minimum liability requirements for commercial auto insurance to $1.5 million. UTCA opposed this measure which was approved by the Senate Commerce Committee but was not posted for a vote in the full Senate or Assembly.

And of course, with gas prices still hovering near $4 a gallon, the idea of a “gas tax holiday” continues to garner attention from politicians. While Gov. Murphy has already dismissed suggestions of a state gas tax holiday, President Biden recently jumped on the bandwagon, calling for a 90-day repeal of the federal gas tax.

Legislative News

While the legislative process usually proceeds in a very deliberate manner, activity typically reaches a fever pitch in June when the state budget must be approved and signed into law. This year was no exception as a number of bills affecting the industry were acted upon and many were signed into law.

deadline for soil remediators to submit a complete A-901 license application has been pushed back to 30 days after the DEP has adopted regulations to comply with this law.

UTCA engaged with our members and expressed to policy makers and the public the negative impact a gas tax holiday would have on vital infrastructure projects and on taxpayers. In addition, we made clear to lawmakers that eliminating the gas tax is nothing more than a gimmick that will have no significant effect on the price that motorists pay at the pump. As of this writing, legislation required to implement a federal gas tax holiday has not progressed in Washington.

Although the Legislature is not likely to return as a group until September, Congress has come back for a busy July session before it adjourns at the end of the month. And, as we head into the fall, much attention will be focused on the midterm elections where control of both the House and Senate could change hands.

While our state lawmakers are largely on summer break, UTCA is continuing to engage with legislators on industry issues and monitoring legislative activity at the state and federal level to ensure the construction industry is represented throughout New Jersey and in Washington, D.C.

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mental health and suicide prevention in construction By: thomas madden, construction risk partners

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ccording to the CDC (Centers for Disease Control and Prevention), the construction industry ranks as one of the occupations with the highest rate of suicide out of any other industry in the United States (52 out of every 100,000 workers). On an annual basis, the rate of suicide in construction is 4 to 5 times the national average of other occupations/industries.

Other prominent reasons for high rates of suicide in construction include a regular pattern of layoffs due to a company’s workload, the economy, or seasonal changes. This unpredictability can impact a worker's financial situation and medical/health benefits coverage.

During the heavy construction season, employees work long, hard hours, often resulting in irregular shifts that affect sleep patterns and lead to consistent physical exhaustion. Furthermore, regular movement from jobsite to jobsite creates a lack of long-term relationship-building opportunities in the workplace, making employees feel alone or on their own.

Construction work is a physically demanding job that many workers do for 20, 30, and some for 40 years. Workers can develop regular aches, pains, and physical stress from the job demands. Some workers may rely on or build a habit of regular

Raising Awareness & Knowing the Signs As supervisors, co-workers, peers, friends, and family members, we need to raise awareness of the mental health crisis in construction and ensure we do our part to help save someone who may be struggling. Many of those considering suicide or selfharm typically hide their feelings or do not open up about their struggles. Therefore, being observant of the people you regularly interact with, checking in with those employees to see how they are feeling, and keeping an eye out for key signs and signals is crucial in prevention. If you are sensing that there may be a genuine mental health issue with a friend or co-worker, some of the common signs to look for include: * Frequent absences * Declining work performance

Safety Perspective

Higher rates of mental health and suicide issues within the construction sector can be attributed to a few primary reasons, including being a male-dominated industry in which males have a higher rate of suicide compared to women. The construction industry also employs a significant percentage of military veterans. This is another demographic with a high rate of suicide compared to other members of society, partly due to substantial trauma endured during their time of service.

medication, alcohol, or drug use to counteract that pain and or depression. Opioid use among construction workers can be prevalent and regular use contributes to an increase in mental health and suicide issues.

* A decreased interest in their job or things that once seemed important to them * Distinct changes in their personality, communication style, or demeanor * Noticeable changes with being aggressive, impulsive, or having an increase in risky behavior/choices * A recent loss of a significant other, family member or a change in a personal relationship has occurred * Have shown a pattern of regular use or increased use of drugs and alcohol * Have shown signs of isolation or withdrawing themselves from outside interests * Made comments about feelings of hopelessness, being a burden

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to others, wanting to die or possibly kill themselves

Resources

Taking Action and Resources to Help

1) National Suicide Prevention Lifeline – Call: 1-800-273-8255 www.suicidepreventionlifeline.org

Safety Perspective

Being aware of the signs associated with mental illness and taking the time to build connections with those who you work closely with will give you the confidence to speak up if you feel concerned about a coworker’s well-being. If someone you know is exhibiting warning signs for suicide, do not be afraid to ask if they are depressed or thinking about suicide. Listen without judging. In some cases, your friend or family member just needs to know that you care and are willing to hear them talk about how they are feeling. Please encourage them to seek professional help. If you can, remove any objects that could be used in a suicide attempt. Encourage them to call – or call together – support services such as the National Suicide Prevention Lifeline: 1-800273-(TALK) (1-800-273-8255). Conversations with a skilled, trained counselor are free, confidential, and available 24 hours a day, seven days a week. If the friend or loved one appears extremely distressed, do not leave the person alone. Try to keep the person as calm as possible and get immediate help.

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2) The Construction Industry Alliance for Suicide Prevention www.preventconstructionsuicide.com 3)Preventing Suicides in Construction – OSHA www.osha.gov/preventingsuicides/ 4) CPWR - The Center for Worker Protection and Training https://www.cpwr. com/research/research-to-practice-r2p/r2p-library/other-resources- for-stakeholders/mental-health-addiction/suicide-prevention-resources/ About the Author... Thomas Madden joined CRP as the Sr. Loss Prevention Manager at the start of 2021. He is primarily responsible for leading the safety, health and risk management strategies for the organization concentrated on servicing the CRP clientele in the NY Metro and New England regions. In this role, Thomas works hand in hand with the senior leadership and safety staff of owners, developers, and contractors to help assess and improve their risk mitigation and safety programs.

Thomas has dedicated his entire career to the construction safety field, most notably as the regional service lead for risk control at one of the nation’s top insurance carriers, where he managed large contractors with significant retention programs.

Thomas also held the Corporate Safety Director position for a $300+ million dollar, top 400 ENR general contractor where he managed all aspects of field safety, claims management and insurance. Thomas currently sits on the national safety committee for the Associated Builders and Contractors (ABC) organization and is an active member in the NYC Chapter of the NYS Association of General Contractors (AGC).

Cover Story

JESCO, Inc: 50 Years of supply and service By: dan kennedy, sr. director

F

rom its founding, the Jersey Equipment Sales Company, commonly known as JESCO, has greatly contributed to, and benefited from its relationships with contractors throughout the Northeast and MidAtlantic regions.

Founded on a philosophy of building communities both in and around each of its branch locations and in the larger construction industry, JESCO focuses on its “bread and butter” lines of business: supply and service. This year JESCO celebrates its 50year anniversary and on behalf of the UTCA membership, we offer our congratulations.

The company was founded in 1972 by Lou Robustelli and his wife Terry, high school sweethearts who set their experience in the construction industry as the building block for success from the start. Lou was raised in a construction family and his familiarity with the equipment they were selling allowed him to immediately relate to their customers and understand their needs, from the type of product to the service and support that would be required after the sale.

A glimpse of the JESCO John Deere Yard line up.

Lou’s father was in construction but unfortunately died young.

This forced Lou into the family business as young man where he saw opportunities in equipment sales and service. He was a small upstart and sought out quality, which is why he began selling and servicing primarily John Deere products. He saw John Deere as a company that delivers a high-quality line of products and he believed in their corporate mission, which is still based on primarily sourcing and manufacturing their products domestically.

Lou Robustelli told us, “I still enjoy every time I see a JESCO logo on a piece of world class equipment. Whether on the road or on a jobsite, the fact that JESCO represents multiple global manufacturers but still services the local communities and customers is truly a source of pride for me.“ Through their partnership with John Deere and other manufacturers, JESCO has provided equipment, parts, and service to hundreds of contractors in New Jersey and beyond. They have expanded beyond New Jersey with 13 locations in New York, Massachusetts, Maryland, and Delaware.

In 2005, Lou and Terry’s son, Jonathan Robustelli took the reins at JESCO and he has built on the legacy created by his parents.

Sitting down with Jon at JESCO’s corporate headquarters in South Plainfield, you understand immediately that you are at a family business. While not always easy, Jon and his four siblings have all worked at the company in various roles, starting in the warehouse.

A bird's-eye view of the JESCO yard entrance.

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Their parents always encouraged their children to explore their own paths while also giving them the option to stay and grow with the company. Some chose the family business while others embarked on careers in different fields.

years. Warren is the Ditch Witch Sales Manager for JESCO. “I have been in the construction equipment business for 43 years, and with JESCO for the last 11 -- since JESCO became the Ditch Witch dealer for the Northeast. What strikes me as most important is the company commitment to being the market leader.

Our investment in people, customer support, inventory, facilities, training, and marketing are second to none. When you are “wired” to be the best in your business it is fun to come to work every day knowing you have the resources to succeed.”

Cover Story

Kleemann Mobiscreen MS 15 Z waiting for service.

Cris Robustelli, JESCO’s IT Manager, talked to us about his tenure with the company. “My father started something very special with JESCO. My brother Jon has taken the company to new heights. Growing up in this business and seeing the opportunities that were here I decided to make this my career and 39 years later, I am still here. I have always loved being around the equipment. I have worked in every department in this company to learn this business from the ground up. As my father always told me, “You learn by doing.” As technology grew, and I was good with computers I was put in charge of IT. We now use technology to help Jon reach his goals and better serve our customers.”

Jon is especially proud of the company’s relationships with its employees, many of whom have been with JESCO for decades and some have been with the company for almost 40 years. In addition, the vast majority of the employees from branches they have acquired have stayed with JESCO.

Showcasing a variety of Hamm equipment.

As the company’s CFO since 1980, Greg Blaszka’s tenure with JESCO is noteworthy. “Being with the company for over 40 years, I have witnessed tremendous growth with new products and technology. At the same time, JESCO has still managed to keep the atmosphere of a small family business.”

Steve Rizzi, another JESCO Sales Manager, has enjoyed an especially Warren Hagenbuch is one of the JESCO employees who has re- long career with the company. “Through my 25 years it has been an mained with the company after an acquisition – now for eleven honor to be a part of JESCO’s tremendous growth. When I started, there were 3 branches in one state. Now JESCO has 13 locations in 5 states. I still get excited representing premiere product lines like John Deere, Wirtgen, Hamm, Kleemann, and Ditch Witch and enjoy working with my reps on deals.“ Jon noted that being in the equipment business is very unique since they do not manufacture anything they sell. As Jon puts it “they are in the people business, not the equipment business.”

He believes that one thing that sets them apart and makes them especially valuable to UTCA members is the portfolio of products they offer for the full range of heavy civil construction equipment. While JESCO is known primarily as a John Deere dealer, they have expanded into other industry segments with products from the Wirtgen Group, Ditch Witch, Topcon, Sokkia, Leeboy, Rosco, Indeco, and Hydrema.

JESCO's 50-year commitment to John Deere on display in the front yard.

According to Jon, JESCO feels the need to earn its customers’ business every day, especially in the current market where contractors are facing a variety of challenges, including escalating costs for products and services. Customers, he says, are looking for ways to manage volatility in not just equipment, but fuel and labor costs.

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Cover Story

JESCO has embraced UTCA as one of its primary ways to engage with clients and says their membership has made a real difference in their business, praising the UTCA’s efforts to support associate members and the commitment of contractors to make connections with fellow Association members. Jon also points out that the trade show at the annual UTCA Convention is the one that they will not miss.

John Deere equipment in one of JESCO's busy shops.

Jon said JESCO is well-prepared to continue meeting clients’ needs as the construction industry evolves to meet changing market forces and technological advances. He cites electric and autonomous vehicles as technologies that will have a tremendous impact on their clients and the future of the industry.

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Throughout this year JESCO is celebrating its customers, employees and its history and expressing its gratitude to the industry partners and employees who helped them achieve incredible success over the past five decades. UTCA congratulates the entire team at JESCO on their 50-year anniversary. We are grateful to have you as a member and look forward to hearing about your continued growth.

Feature Story

commitment to customer service drives amazing growth of signs & safety devices By: ryan sharpe, Director of Government affairs & Communications

I

f you have ever watched the NBC show Shark Tank you will have likely seen a number of husband-and-wife teams that strike out on their own with a new product or service.

This often propels them to unparalleled success. A similar story played out right here in New Jersey where husband-and-wife team Andrew and Heather Altobelli turned a small line striping company into a two headed juggernaut which now includes Signs and Safety Devices, a company that plays a vital role in the road and utility construction field in and around the tri-state area.

After working in the industry for several years and looking to start his own business, Andrew Altobelli founded Straight Edge Striping in 2000. With only one truck and Andrew manning the company’s lone striping machine, he and Heather built the business into a multi-million-dollar operation that spawned Signs and Safety Devices which would become an industry leader in the sales and maintenance of traffic safety products.

Signs and Safety Devices was established in 2007, with Heather Altobelli as its owner. The company was initially established to support Straight Edge Striping by providing various road safety products, such as signs, traffic cones and drums. However, she soon expanded her focus and offered these products to other companies in the infrastructure sector. With an in-house sign fabrication facility, they are able to produce regulatory, warning and custom-made signs within 24-48 hours and have them installed by one of their multiple installation teams. In addition, they have expanded their already extensive inventory of traffic related products to help meet the last minute and time sensitive needs of their customers.

Heather Altobelli, owner of Signs & Safety Devices

over, Signs and Safety Devices has grown from a company with three employees working out of a rented building to a company with more than 65 employees operating out of their recently built state-of-the-art 25,000 square foot facility in Middlesex Borough.

In the 15 years since their founding, Signs and Safety Devices has worked with some of the biggest contractors in the utility and construction industry, including J. Fletcher Creamer, Crisdel, Della Pello, Henkels & McCoy and Penn Bower, as well as organizations like NJ American Water and Middlesex Water Company. They have also been named the exclusive safety company for Elizabethtown Gas. Through their partnerships in the industry, they have played a critical role in several significant projects, including work on the George Washington Bridge, the New Jersey Turnpike, Garden State Parkway, the Atlantic City Expressway, and the Port Authority of NY & NJ.

Signs and Safety Devices expanded again in 2013 with the establishment of their traffic control division. This enabled them to become a one-stop shop for traffic control products and equipment, sign installation, and detour and lane closure packages.

Between the two divisions, this WBE and SBE certified business has more than 45 TCC field operators, and a fleet of 50 crash trucks in addition to multiple pickups and rack trucks. More-

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Signs and Safety Devices new 25,000 square foot State-of-the-Art Facility in Middlesex, New Jersey.

Signs and Safety Devices is set apart in the industry by another factor, explaining that a good work environment is the key to success. The construction industry is a challenging industry to work in being that it is high pressured and competitive. Signs and Safety Devices policy is that they offer a place for employees

to grow within the company, offering a competitive salary and an excellent benefits package. They believe that a well compensated work force will lead to a superior performance in the field.

Lane closure by Signs and Safety Devices on the George Washington Bridge.

Despite their tremendous growth, Signs and Safety Devices shows no signs of slowing down. In fact, as part of their full-service capabilities they also offer equipment rentals, including message and arrow boards and attenuators. In addition to working with Laborers Local Union 472 in Northern and Central Jersey, this year they are looking to continue their growth by expanding their footprint in South Jersey with the help of Laborers Local Union 172.

Art and Graphics Department of Signs and Safety Devices.

Feature Story

Asked how they explain their success, the folks at Signs and Safety Devices point to a company that prioritizes superior customer service. “Service and Quality” are the two words that define their culture and, as they proudly note, they never say no to a client. Directly linked to service and quality is growth, but not in the way you would normally expect. The common belief is that growth and purchasing new equipment are both linked to profits and the bottom line. At Signs and Safety Devices they believe growth enables them to service their clients, to be able to handle whatever situation arises. Purchasing equipment only when it’s needed inevitably puts you behind the curve. You are then playing catch up and running the risk of dropping the ball on your client’s project. The bottom line is they believe in a proactive approach to customer service as opposed to a reactive one.

Celebrating their 15 Year Anniversary, they have reasserted their commitment to meeting their clients’ needs by offering quality products and unrivaled customer service which has been the key to the remarkable success of Signs and Safety Devices. Congratulations on an amazing first 15 years and we look forward to what the next 15 years will bring for Signs and Safety Devices.

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the nj department of labor points the spotlight on prevailing wage compliance and worker safety issues during the summer of 2022 By: othiamba n. lovelace, esq., tobia & lovelace, esqs.

New Jersey Prevailing Wage Act Issues

If you’re performing construction, demolition, repair, or painting work on a project under a contract that is paid for with public funds or taking place on public land, you are most likely performing “public work”, as defined by the Prevailing Wage Act. That means local officials will be checking your records to ensure that you (and your subcontractors) are making the correct wage determinations for your employees and paying the correct prevailing wage for the work being performed. The appropriate prevailing wage for the work you are performing may vary based on the particular county where the work is being performed. That

is why your contract compliance team should routinely review the NJDOL’s prevailing wage rate determinations when they are published. If you are not sure how to properly classify the type of work your employee is doing, you can call the NJDOL directly for guidance.

Contractors that fail to properly file their certified payrolls can be fined or even barred from working on public projects in the future. The June 15, 2022, press release was a clear reminder from the NJDOL to local officials that contractors on the debarment list cannot perform public work in New Jersey and that local officials should check the NJDOL’s online debarment list before awarding contracts. Contractors should always check the NJDOL’s debarment list before awarding any subcontracts on a public project. Your subcontractor may not be aware of its obligations under the Prevailing Wage Act, but you may be held liable for violations that occur as a result of your subcontractor. Pick your subcontractors wisely because their problems may quickly become your problems if you are not careful.

The NJDOL is also looking to see if contractors performing public work in New Jersey are participating in a United States Department of Labor registered apprenticeship program. According to the NJDOL, it has placed a greater focus on developing apprenticeship programs in New Jersey because it wants to ensure that contractors receiving public funds are contributing to training and growing New Jersey’s crucial construction industry workforce. As a result, if you are not currently participating in an apprenticeship program, you should take immediate steps to enroll in one if you want to continue performing public work in New Jersey.

Labor Relations

On June 15, 2022, the New Jersey Department of Labor (“NJDOL”) issued a letter to all local governments and school officials demanding that they take immediate action to reduce violations of the New Jersey Prevailing Wage Act that have increased across the State of New Jersey. According to the NJDOL, the increasing number of violations it has experienced over the past few years has negatively impacted the timeliness and cost of public works projects in New Jersey. As a result, the NJDOL is asking local officials to step up their efforts to ensure that contractors performing “public work” comply with the requirements of the Prevailing Wage Act and the Public Works Contractor Registration Act (“Contractor Registration Act”).

Now is the time to make sure you are filling out your certified payrolls properly and filing them on a weekly basis. Even if the contractor you are working for fails to ask for your certified payrolls, it is your responsibility to get them completed and filed in a timely manner. Remember that all the hours your employees work on the project should be captured in your certified payrolls.

The NJDOL will be looking to see if your actual payroll matches the certified payrolls you submit during your project.

According to a June 21, 2022, press release issued by the NJDOL, New Jersey Lt. Governor Sheila Oliver supports the increased enforcement efforts because “building a stronger and fairer New Jersey means ensuring that every hardworking individual in New Jersey receives the wages they should be earning in accordance with the law.” The Lt. Governor added that “wage theft and unfair competition will not be tolerated in New Jersey.”

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New Jersey Labor Commissioner Robert Asaro-Angelo also supports the current enforcement efforts because he believes that “we have a responsibility to safeguard our workers and protect employers paying fair compensation and developing our workforce from being undercut by unfair competition.” New Jersey’s Labor Commissioner also reminded contractors and local officials that “public contracting is a privilege, not a right, and it comes with certain responsibilities.”

Summer Safety Concerns

Labor Relations

The NJDOL also reminded contractors on July 5, 2022, that they should be mindful of the health of their employees while performing work during the hot summer months. Specifically, the NJDOL reminded contractors that they should become familiar with the symptoms of heat related illnesses. The United States Department of Labor Occupational Safety and Health Administration (“OSHA”) has provided some helpful guidance that employers can consult if they are not familiar with the symptoms of heat related illnesses.

For example, symptoms of a heat stroke can include: 1) confusion; 2) slurred speech; 3) unconsciousness; 4) seizures; 5) heavy sweating or hot, dry skin; 6) very high body temperature; and 7) rapid heart rate. If you see one of your employees exhibiting any of these symptoms, do not try to diagnose which illness your employee is suffering from in the heat of the moment. Unless you are a doctor, you should not spend any time trying to guess whether the employee suffered a heat stroke or heat exhaustion or heat cramps. Remember that time is of the essence and your employee’s life could be in jeopardy. Call a trained medical professional or 911 immediately.

When a heat related emergency occurs, OSHA recommends that employers take reasonable steps to help impacted employees until trained medical professionals arrive. Employers can help by taking the affected worker to a cooler area, like a shaded or air-conditioned area. If possible, OSHA strongly suggests that employers immerse the affected worker in cold water or an ice bath to help reduce the worker’s body temperature.

All employers have an obligation to ensure the ready availability of medical personnel for advice and consultation on matters of health within a factory or plant. On construction jobs where there is no infirmary, clinic, or hospital in near proximity, there must be a person adequately trained to render first aid. Employers also have an obligation to ensure that adequate first aid supplies are readily available.

If you have any questions about the topics raised herein or about any other labor relations matter, please do not hesitate to contact the attorneys at Tobia & Lovelace Esqs., LLC at 973-746-6000 for further information.

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real progress: UTCA's Water Infrastucture investment program By: dan kennedy, senior director

I

n 2019, the UTCA Board of Directors adopted a water infrastructure investment strategy in a purpose-driven effort to increase focus on the “U” in the UTCA. That phrase, borrowed from our late friend Joe Walsh, never leaves my mind as we collectively leverage the expertise and relationships of UTCA to promote all infrastructure sectors.

Contractors have had a front row view of the deteriorated condition of NJ’s water infrastructure assets. I believe that we are starting to see real progress made towards overcoming the trend of inaction. There have been meaningful actions at various levels of government that are chipping away at the long-standing issues with our water infrastructure.

Water systems that were successfully operating are continuing to accelerate their progress. Water systems that were treading water are doing more and finally addressing systemic issues. While there are those water systems that are still just managing to avoid disaster, there are more regulations and support in place to push them to act. And yes, there are some bad actors out there that have no business operating a public water system and those are facing intense scrutiny because the public tolerance for public health risks has clearly decreased. While we are still dealing with the repercussions of decades of inaction, I am happy to report that real progress has been made with more progress on the horizon: Filling Funding Gaps / Capital Planning • UTCA and a wide coalition of partners (namely ELEC and LECET) achieved the inclusion of $300 M for water infrastructure in the recently signed state budget. This increased funding goes on top of the additional $60 M annual line item UTCA achieved in the past two budgets. Increasing the state budget for

• As Chair of the Clean Water Construction Coalition, UTCA was able to successfully advocate for the passage of the BIL. NJ’s Water Bank programs will receive $168 M annually starting this year, escalating slightly higher over the next five years. New Jersey only received $84 million in recent years from the EPA. • UTCA lead legislation enabled NJ to participate in a new EPA loan program and recently closed on a $221 M loan to the New Jersey Infrastructure Bank (I-Bank). This preferred financing for the State will free up at least another $100 M for projects.

• UTCA drafted bills and saw them introduced in both houses, (S-1229 / A-682) that directs DEP to work with the DCA, BPU and the I-Bank to develop State water infrastructure investment plan. These bills are now moving. We believe the goal in any State plan should be set to at least double the annual rate of investment in water infrastructure assets, from an estimated $1 billion to a rate of at least $2 billion per year for the next 20 years.

Capacity Building in Water Systems • UTCA assisted sponsors in drafting legislation (S-647) that became law to amend the Water Quality Accountability Act. The amendments expanded the scope of the original act in several ways, most notably to clearly enable DEP to enforce the provisions of the original act and to ensure that they incorporate operational changes to remain in compliance. UTCA is actively participating as a stakeholder in the DEP rule-making process under the provisions of this new law.

The Pipeline

In February 2019, I noted in this column that unlike many other problems facing New Jersey, we know how to fix the (mostly) underground and often ignored water infrastructure assets. Replacement and upgrades of these assets (aka construction), after utility-driven asset management plans are in place, is the primary way out of this mess. While policy focus on funding is inevitable and necessary, the four goals set in our strategy go past just the elephant in the room ($$$). Our program includes corresponding actions related to investment for all water systems in the State of NJ. These four goals start with the obvious filing funding gaps / capital planning and expand to capacity building in water systems; reduction in project review times and costs and project prioritization.

water infrastructure by $360 M compliments new federal Bipartisan Infrastructure Law (BIL) funding for water infrastructure.

• UTCA assisted sponsors in drafting legislation (S-3398) that became law to require utilities and other water providers to identify all lead lines in their systems and replace them within the next 10 years.

• We are working with partners to eliminate the misdirection of ratepayer funds related to the local government oversight of uniformed officers on all construction projects, including water jobs.

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Reduction in Project Review Times & Costs • UTCA is working with partners to see that DEP rules (NJAC 7:22) which detail the environmental review process for all state funded projects, are streamlined and modernized.

• UTCA has worked with partners to draft legislation to standardize specifications for bidding construction projects for all local government units under the Local Public Contracts Law. That legislation is pending introduction.

• UTCA is a stakeholder in relevant DEP rulemaking to ensure that all new or amended rules consider the impact to the viability of water infrastructure capital projects.

• The NJ I-Bank recently certified a pool of qualified engineers to complement internal capacity of the DEP. It is unlikely that the DEP can meet the challenge of greatly accelerating the pace of approvals for water infrastructure projects without outside assistance. UTCA is advocating that the DEP utilize these available resources.

Project Prioritization

The Pipeline

• NJ is due to issue final permits to all municipalities/utilities with combined sewer systems by the end of this year. UTCA has committed a lot of time to ensure that the Long-Term Control Plans result in the timely elimination of combined sewer outfalls statewide mostly through capital project implementation. Increased funding will create opportunities and the imperative to see that these projects move forward swiftly.

• Day to day, we focus on accelerating the work around state priorities. We have seen an increase in lead service line projects, projects required to meet new drinking water standards for PFNA, PFOA, PFAS and 1,2,3-TCP contamination, and some critical projects to shore up drinking water supplies.

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Since 2019, we have worked closely with partners (some new / some old) to increase the awareness of residents and businesses that rely heavily on water infrastructure every day. Up to recent years, the mounting needs of our drinking water, wastewater, and stormwater systems have largely been an underground secret. We still need more people to care about water infrastructure.

“Plans” often sit on the shelf after the press release is written. These types of documents are a dime a dozen and without implementation, will have absolutely no impact. We understood this when we put our plan together, which is why we recommended actions that were challenging but possible and within reach. We are not at “mission accomplished” by any stretch so we continue to push. We still strongly believe that the construction industry, residents, and businesses of the State will benefit from our advocacy.

When talking to elected and appointed officials in the past few years, funding is the primary driver in the discussion. That said, we have avoided the trap of being either dissuaded by or led by the cumulative price tag of the work as we have been encouraging all to view every effort to “narrow the funding gap” as progress. No longer are we looking for the silver-bullet funding answer.

As we increase capital investment, we cannot forget that without a structured process to ensure accountability and fairness, new money will do little to address the root causes of these challenges.

We also cannot let the exact investments for each system be dictated from a central office in Trenton as the nuances of each system are understood best by those responsible systems locally.

We have built and will keep an open dialogue between all partners, especially our friends in the building trades, to see that progress does not stall. UTCA has done its part to drive the conversation past the point of talking about the problem. We now must accelerate the construction work with available funding and focus. If we don’t, the momentum will be lost because residents now expect real progress and that is what construction projects offer.

By: mitchell w. taraschi & nicholas j. guarino, connell foley llp

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ithin the last year, the Appellate Division of the New Jersey court system has handed down two decisions that have bolstered the power of New Jersey’s Prompt Payment Act (the “PPA”). As such, it is critical that owners, contractors and subcontractors are keenly aware of both the powers granted under the PPA and the potential pitfalls.

The PPA is broken down into a number of subsections, the most pertinent of which are discussed briefly below: Subsection (a) Subsection (a) pertains specifically to work performed by a prime contractor on behalf of an owner (including public entity owners). Under this subsection, if an owner receives an invoice from a contractor for work performed pursuant to a contract, that entire invoice amount is considered accepted and certified by the owner unless the owner, in writing, refutes the specific amounts in dispute that are being withheld and the reasons for withholding those amounts. Further, this writing must be made within 20 days of receipt of the invoice. Both the writing and 20-day deadline are critical. Any amounts not disputed in writing will be deemed accepted and certified and all accepted and certified amounts must be paid within 30 days of acceptance and certification, otherwise the owner is in violation of the PPA.

Subsection (b) Subsection (b) pertains specifically to work performed by subcontractors or subsubcontractors on behalf of a prime contractor. This subsection is even more strict than subsection (a): if a subcontractor/subsubcontractor has performed pursuant to

NEWS

one missed step or deadline under the ppa and it will cost you a contract with a prime contractor or subcontractor, and the prime contractor or subcontractor approves the work, and the parties have not otherwise agreed in writing, the party receiving an invoice must pay within 10 calendar days of receipt. If not, the prime contractor or subcontractor is in violation of the PPA. Subsections (c) and (f) Subsection (c) requires that, if payment under subsections (a) or (b) is not made within the time limits set forth therein, the delinquent party “shall be liable for the amount of money owed under the contract” plus prime rate interest plus one percent (1%). In addition, and here is where the PPA gets its teeth, Subsection (f) also requires an award of reasonable attorney’s fees and costs on top of the total amount and interest.

Two recent Appellate Division decisions have reinforced the strict requirements of the PPA and the court’s unwavering support for the intent of the statute. First, in 2021, a court ruled that the PPA requires an award of attorneys’ fees for violation of the PPA even when the amount of attorneys’ fees is disproportionately high compared to the amount of the invoice awarded. In this case, the plaintiff was seeking to recover $30,500 in unpaid invoices, as well as $104,670.51 in attorneys’ fees and costs expended to recover the $30,500. The court approved the entire amount, awarding plaintiff $135,170.51. The court held that the PPA is a “fee-shifting” statute designed to “ensure that contractors and subcontractors receive full payment for their work promptly on completion.” The court noted the attorney fee provision is predominantly a “deterrent aspect of the legislation,” intended to deter dilatory payments by owners, prime contractors and subcontractors, and to ensure prompt payment to contractors and subcontractors. Without an award of attorneys’ fees, those contractors and subcontractors who were stiffed small amounts of money would not try and recover those amounts, as it would not be worth the legal expense. This would incentivize non-payment and would fly directly in the face of the clear intent of the PPA. Subsequently, in May of 2022, the Appellate Division doubled down on the PPA in another decision where it held that even where there is clearly a dispute over the amounts owed, violation of the PPA entitles the party seeking payment to the full amount sought, interest and attorneys’ fees and costs. In this case, the plaintiff, an electrical subcontractor, performed various services for the defendant, a general contractor, and submitted its invoices. However, the general contractor failed to object to amounts

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in dispute in writing within 20 days of receipt of the invoice. The defendant maintained it objected to the bills, arguing that: the parties had agreed to a dollar amount cap for the work on one project; it was never given an invoice until a year and a half later; and the plaintiff improperly raised its labor rate from a previous job. However, the court disagreed with the general contractor and awarded the electrical subcontractor the full amounts sought, plus interest, attorneys’ fees and costs. The court made clear that disputes over the amounts owed are irrelevant once the PPA has been violated. Where an owner or prime contractor fails to pay amounts owed, and fails to dispute any amounts withheld, in writing within the applicable time limit, the party is liable under the act regardless of whether the amount is in dispute. Effectively, if a defendant is found to have violated the PPA, the plaintiff is entitled to the full amount sought, plus attorneys’ fees, costs and interest, without exception.

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These decisions are a clear statement from the Appellate Division that the terms of the PPA are to be upheld strictly to ensure payments are made in a timely fashion and to deter bad actors. As such, owners, contractors, subcontractors and subsubcontractors need to be acutely aware of the requirements of the PPA. For those seeking payment for services, it is critical to know your rights under the PPA, when a violation has occurred and to what damages you are entitled if payment is not received in a timely fashion. For those hiring contractors and subcontractors, it is critical to understand the time limits and proper methodology for disputing invoices to ensure you are not on the hook for attorneys’ fees and costs in addition to the invoice you may or may not have had to pay.

About the authors. . . Mitchell Taraschi is a partner at Connell Foley LLP, where he serves as co-chair of the firm’s Construction Law Group. Nicholas J. Guarino is a litigation associate with the firm.

By: maggie fitzgerald, SHRM-CP, REBC, Chhc, rhu Sr. account executive - employee benefits, ioa

E

ffective July 1, 2022, a new requirement referred to as the Transparency in Coverage Rule will become enforceable.

This rule requires that certain health plans and insurers disclose information relating to the cost of care.

2) Internet Based Price Comparison Tool (2023)

1) Fully-Insured Groups: Employers sponsoring fully-insured medical plan options can rely on the insurance carrier to satisfy this requirement. However, fully-insured employers should reach out to their group health plan carriers to ensure they are preparing to comply with the public disclosure requirements by the July 1st deadline.

3) Internet Based Price Comparison Tool (2024)

2) Self-Insured Groups: Employers sponsoring self-insured medical plan options must contact their TPAs to confirm compliance with the TiC requirements. Self-insured groups should be aware of the website where the public disclosures will be posted, and should be prepared to disclose the website upon inquiry.

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health plan transparency a) This would allow an individual to receive an estimate of their cost sharing for a particular service from a particular provider for 500 items and services

a) This would allow an individual to receive an estimate of their cost sharing for a particular service from a particular provider for all items and services.

As rules, regulations, and requirements may be subject to change, we encourage all Employers and Plan Sponsors to continually seek guidance to ensure they remain in compliance.

The intent of this rule, in laymen’s terms, is to provide health care consumers (you and me) with enough information to make informed decisions concerning the cost associated with seeking services. This means we would be able to reasonably predict the financial impact for services like going to the doctor, landing in the hospital, and having medical procedures performed.

Many of us have experienced sticker shock after a medical service is rendered and we receive an Explanation of Benefits from our insurance company or a bill from the service provider. In many cases, we had no idea what the service was going to cost until long after it was done.

The path to making this pricing information available to the public will be have a multi-faceted approach with some provisions being phased in during 2023 and 2024. Ultimately, certain plan issuers will need to provide the following components to adhere to these new requirements.

1) Machine Readable Files that contain the cost for the following items be made available on publicly available websites (2022) a) In Network Rates for all covered items and services for Network Providers b) The allowed amounts and billed charges from Out of Network Providers

Utility & Transportation Contractor | august | 2022 97