Utility & Transportation Contractor June 2023

From the desk of: glenn ely

In one of my previous messages, I noted how impressed I have been with the terrific and hard-working staff that we have at the UTCA. In this message, I am starting again with that theme but this time, I am focused on our long time inspirational, loyal, and tremendously capable CEO, Bob Briant, Jr.

As you are aware, our association is a member of the American Road and Transportation Builders Association (ARTBA) which focuses on transportation at the national level and pursues issues and legislation important to our industry. In May, ARTBA recognized four industry icons that have contributed dramatically to the transportation realm by their induction into the ARTBA Hall of Fame. Among the prestigious list of inductees was our beloved Bobby Briant, Jr.

In two separate ceremonies in recent weeks, first in DC and then in NJ, Bobby’s family, friends and business associates celebrated his induction. A second local celebration took place on a beautiful evening at the Avon-By-The-Sea Marina, fittingly at the foot of the Robert Briant, Sr. bridge, who himself was inducted into this same Hall of Fame some ten years before his son. After a wonderfully crafted ARTBA produced video, ARTBA General Counsel Rich Juliano spoke in glowing terms about Bobby’s leadership and accomplishments within NJ and nationally within the ARTBA organization.

It was clear during Rich’s presentation and in the heartfelt support shown by all who attended, that this association takes great pride in homegrown Bob Briant, Jr. Congratulations and thanks for your leadership, loyalty, and friendship, Bobby!

Another staff recognition is also warranted here, and that is to extend a thank you to Dan Kennedy for his six years of service to this organization. As our Senior Director of Environmental

and Utility Operations, Dan has played a vital role at UTCA and helped move our organization forward in all things water, wastewater, and utilities. As he moves on at the end of May to become the CEO of another association, we wish him nothing but success in that new role. Stay tuned for information on Dan’s replacement.

Budget season each year in New Jersey government has always been one which has the UTCA very busy, and this year is again proving to be no different. Staff is working hard to pursue the greatest funding possible for infrastructure expenditures in the kinds of work that we all do. This is true across the board in transportation, water/wastewater, and utilities. For instance, in the water and wastewater realm, last year, together with our Labor partners, we were successful in securing $300 million in funding. This year, UTCA is pushing for the allocation of an additional $700 million in funding for water infrastructure projects.

Lastly, two great contributing firms are being recognized in this issue, as Montana Construction’s 30 years in construction are detailed in the cover story, and the Raritan Group’s 80 years in business is similarly recognized in the feature story. Congratulations to these two firms and thanks for your contributions to the industry and this organization!

Enjoy this issue and have a great, safe summer!

Glenn Ely

who is on the hook for early financial education

by: michael h. meyers, partner, mountain hill investments

Unfortunately, many young people aren't getting an education in the fundamentals of dealing with money. According to the Council for Economic Education, in 2022, only 23 states required students to take a class in personal finance to graduate from high school. That means it’s important for parents to step in to educate and prepare their kids to understand money.

At the same time, employers are dealing with financially stressed employees across all income levels. According to Price Waterhouse Cooper’s Annual Employee Financial Wellness Survey, finances are the number one source of stress—more so than work, health and even family issues. I think this is directly related to a lack of early education. We can work with employers through financial wellness and education programs to help their employees, but I think a strong review of our education practices beginning with our kids is imperative as well.

I thought it would be interesting to share some of what I have done for my daughters (I have three - ages 8, 11, and 14) and the advice I’m giving those young people entering the workforce now.

It’s important to start introducing kids to money early and with basic concepts. I remember years ago my business partner explained how he talked with his kids about money at an early age. He said: you can save some, spend some, and give some away. I thought it was brilliant in its simplicity and a perfect approach for young kids. If you ask my daughters what you can do with money, this is precisely what they’ll tell you. Now that we’re entering the teenage years with my oldest, we’ve begun to discuss the topic in greater detail (she’s looking for her first job). Lastly, I’ve had a considerable amount of experience with people in their twenties as they enter the workforce and become introduced to 401(k) plans.

Early Years:

1.Saving – Your kids’ first interactions with money will likely involve spending but the goal for me was to get them to think about saving first. We used separate jars to designate the three things money could be used for and the savings jar always came first. At this age, I think it’s important to keep savings goals very short term, we’re not talking about college or retirement planning here. Saving teaches discipline and delayed gratification, and also financial preparedness. You may even find they don’t want to part with their money once they reach their goal and instead, set another one.

2.Spending - I always found it useful to pay with cash if my daughters were with me in a store. Physically showing them how money works is powerful and using cash made this lesson

simpler. It’s just harder to convey an exchange of value with credit/debit cards, cash apps, and Apple watches. We’re also lucky enough that our daughters’ school still accepts cash for lunch; many don’t. I know it’s easy for parents to load up a card and not worry about having cash all the time but having your child interact with cash on their own is invaluable. It won’t always work perfectly though. My experience is that our oldest has nearly always come home with change, our youngest is about 50/50, and our middle daughter typically runs a debit balance with the school.

3.Giving – One of the benefits of teaching your kids about money is you can share your values with them simultaneously. If you value giving to others, you can instill that value in your children by helping make it a habit for them from an early age. My firm donates to various charities every year and we enlist the help of clients to make decisions as to where those donations go. I think it’s important to do the same with your children. Ask for their input and help them support organizations they can relate with. They're far more likely to want to support a cause that they know about and identify with. It’s not all about money either; they can also use their time to volunteer or donate food and clothes as well.

Teenage Years:

Working at a young age can provide valuable lessons about managing money and further influence the financial choices that kids make as they grow older. My 14-year-old daughter is eager to start working part-time, and if she finds something, she’ll have an opportunity to continue the lessons she’s learned, and we’ll have the opportunity to begin new ones. I think this is an appropriate time to start talking about investing, for example, as opposed to just saving. The difference is understanding how much money should be immediately available to her (savings) at any point vs. what she should consider earmarked for the future (invested). A Roth IRA is a powerful tool you can set up with your child to begin this conversation. These can be set up any time and age your child has earned income during the year. We’ll be opening a custodial Roth IRA when the time comes. In this case, the custodian (parent) maintains control of the Roth IRA including decisions about contributions and investments, however, your child remains the beneficial account owner.

A Roth IRA is a retirement savings tool; I realize this is probably not going to appeal to someone 14 years old, but the lesson is about setting money aside for different purposes and creating habits that will stick as they get older. The habits they create, in my view, are even more important than the investments made in the account at this point. If your kids are interested, have them

discuss the brands they like and use and invest a portion in individual stocks. The rest can be put into something simple like a low-cost exchange traded fund.

Early Working Years:

I’ve been in front of a lot of people in their twenties lately. My firm is part of the onboarding process for our 401(k) clients and so part of the corporate employee education we provide is meeting new hires and educating them on the benefits of the 401(k). We also spend considerable time making sure they have their basis covered before participating in the plan.

1.Budget - If they haven’t already, this is an important time to create a budget. They have a salary now and understanding how much comes in vs. what goes out is imperative. This is especially true now given all the subscription services people are signed up for; everything from entertainment to razor blades. It seems that it’s all delivered monthly and directly debited from somewhere.

2.Debt - Paying off debt should be a priority in your twenties. School loans are a major issue right now, but I’ll focus on credit card debt here. For anyone that has accumulated credit card debt at this age, creating a plan to pay it off aggressively should be paramount. You’ll never out earn the usury interest charges levied by the credit card companies.

3. Emergency savings – An emergency fund is a simple savings account earmarked for unexpected expenses like car and home repairs. Having an adequate amount of savings in the bank to cover unforeseen expenses will allow them to avoid racking up credit card debt or taking a loan against a 401(k) or elsewhere. The great thing about savings accounts now is banks are paying interest again. Regardless, this should be money that’s not invested and is easily accessible.

4.Retirement – I mention retirement as a topic that seems foreign to a 14-year-old, and this is still the case in their twenties in my experience. It’s never too soon to save for retirement and as I mentioned the Roth IRA previously for teenagers, the Roth 401(k) is a powerful tool for someone in this age group as well. There are several types of employer sponsored 401(k) plans; some offer profit sharing contributions; some offer matches. Regardless of what the employer does, it’s important for people in this age group to work to get to a personal savings rate of 10%. Going beyond that is fine provided it doesn’t impact your life in a negative way, but 10% should be the goal.

5.Pay Attention – Reaching your goals and checking off the “to do” boxes is important, but it doesn’t mean you take your eyes off the bigger picture. Check your bank accounts online to spot any charges you don’t recognize or services you no longer need. Review your investment account performance and allocations and re-set your goals when you feel comfortable doing so.

My firm works as an advisor and co-fiduciary to corporate 401(k) plans, specializing in the construction industry. We work with UTCA firms to enhance their 401(k) offering by building employee education programs.

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.

enforceable liquidated damages clauses

By: adrienne isacoff, esq., florio, perrucci, steinhardt, cappelli, Tipton & Taylor LLC

Liquidated damages clauses are a staple of public and commercial contracts. It is useful for contractors to understand when such clauses are enforceable, at all stages of contract performance – from bid review to litigating claims.

Liquidated Damages in Bid Specifications

On the State level, New Jersey Department of Transportation, Standard Specifications, Section 108.02, provides a properly worded liquidated damages clause, in which the contractor and the Department recognize that delays to the contract time may result in damages to the Department, for which liquidated damages may be imposed as compensation for actual damages, and not as a penalty. Most county and municipal highway and road construction contracts directly incorporate the Standard Specifications into their contract or otherwise use comparable language to impose liquidated damages for delay beyond substantial completion.

The amount of liquidated damages that may be imposed must be specified in both the bid documents and the contract so that bidders are able to prepare their bids with the risk of delay calculated into their estimate. The Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq., does not directly address the circumstances under which liquidated damages may be enforceable. But New Jersey case law has interpreted the requirement that “[a]ny specifications for the provision or performance of goods or services under this act shall be drafted in a manner to encourage free, open and competitive bidding (N.J.S.A. 40A:11-13) to require specifications that are unmistakably clear, because ambiguous terms “may seriously affect the purpose of competitive bidding.”

Pucillo v. New Milford, 73 N.J. 349, 355 (1977); see, also, Saturn Constr. Co., Inc. v. Bd. of Chosen Freeholders, Middlesex Cty., 181 N.J. Super. 401 (App. Div. 1981).

Liquidated Damages Must Be a Reasonable Forecast of Just Compensation

Courts in both New Jersey and other jurisdictions have consistently held that the amount of daily liquidated damages imposed by a contract must be a reasonable forecast of just compensation for any delay caused by failure to timely complete the project. The rule was stated in the following terms in Westmount Country Club v. Kameny, 82 N.J. Super. 200, (App.Div.1964), as follows:

An agreement made in advance of breach, fixing the damages therefor, is not enforceable as a contract and does not affect the damages recoverable for the breach, unless (a) the amount so fixed is a reasonable forecast of just compensation for the harm that is caused by the breach, and (b) the harm that is caused by the breach is one that is incapable or very difficult of accurate estimate. Upon a consideration of the whole agreement, if it is doubtful whether the provision for payment is intended as a penalty or liquidated damages, it will be construed as a penalty, because the law favors mere indemnity.

In Utica Mutual Insurance Co. v. DiDonato, N.J. Department of the Treasury, 187 N.J. Super. 30 (App. Div. 1982), the court noted that in interpreting and applying a liquidated damage clause, more than a mechanical multiplication of the number of days delay by the perceived contract amount is required. There must be a preliminary inquiry to determine whether the contract clause provides for the imposition of a penalty or the assessment of liquidated damages. The Appellate Division further emphasized that an owner has the burden of proof in establishing that the liquidated damages were reasonable, as well as in proving that any delay by the contractor was not excusable. The Appellate Division remanded the case because, among other things, the trial court did not make specific findings that the liquidated damages were reasonable.

See, also, D.A. Nolt, Inc. v. The Philadelphia Municipal Authority, 463 F.Supp.3d 539 (E.D. Pa. 2020), in which the court denied enforcement of a $10,000/day liquidated damages clause, holding that the provision was not based on a reasonable forecast of probable costs.

There are occasions where a public owner drafts bid documents that are not in accordance with these general principals. If the bid specifications simply provide that “the Contractor shall pay the Owner liquidated damages for the above-stated actual costs incurred,” bidders may be able to successfully challenge those specifications, since they are not being informed of the daily rate in advance of any contract dispute. Such a poorly drafted provision does not conform to the court mandate that the specifications allow bidders to prepare their estimates with a full understanding of the contract terms and risks involved. In addition, a provision written in this fashion fails to meet the requirement that owners make a determination prior to drafting the contract of a reasonable forecast of actual damages for delay.

Liquidated and Actual Damages

Contractors should remain mindful that actual damages for breach of contract other than those caused by delay may be imposed in addition to liquidated damages. However, most jurisdictions hold that an owner may not be entitled to both liquidated damages and actual damages for delay. For example, in U.S. Fidelity & Guar. Co. v. Braspetro Oil, 369 F3rd 34, 73 (2d Cir. 2002) the court held that, “Under no circumstances, however, will liquidated damages be allowed where the contractual language and attendant circumstances show that the contract provides for the full recovery of actual damages, because liquidated and actual

damages are mutually exclusive remedies under New York law. See also Fed. Realty Ltd. P'ship v. Choices Women's Med. Ctr., 289 A.D.2d 439, 441, 735 N.Y.S.2d 159 (2d Dep't 2001).

As explained by the court in Glob. Facility Mgmt. & Constr., Inc. v. Joe & the Juice Miami LLC, 2019 WL 2237976, at *2 (Sup. Ct. Suff. Cty. 2019), where the parties’ agreement contains both liquidated-damage and actual-damage provisions, “[s]uch a scheme cannot be read to reflect a good-faith effort by the parties to liquidate their damages” and, therefore, under New York law, “it is the liquidated-damage provision, and not the actual-damage provision, that is unenforceable”.

BEST PRACTICES

Bidders should carefully review bid specifications to review the wording of any liquidated damages clause. If the provision does not provide for a reasonable daily assessment for delay, and/or if it allows the owner to assess both liquidated damages and actual damages for delay, the bidder may want to challenge the bid specifications pre-bid in accordance with the time requirements set forth by applicable law. If a contractor is assessed liquidated damages for asserted failure to timely perform the project, the contractor should require the owner to prove that there was no excuse for delay and that the amount of liquidated damages assessed was reasonable.

building safeguards against construction fraud

By: salvatore schibell, cpa, cfp, cgma ms taxation, mba

Construction fraud is a persistent problem that all contractors must address. Contractors are hit more frequently and for more money than companies in other industries.

According to a study from Occupational Fraud 2022: A Report to the Nations® published by the Association of Certified Fraud Examiners (ACFE), the median loss due to occupational fraud in the construction industry is $203,000. In comparison, this is a median loss of $117,000 across all other industries. Furthermore, the median duration of construction fraud cases was longer – 18 months compared to 12 months.

The median is the number in which half the cases are higher, and the other half are lower. However, the numbers are more disturbing when you look at the average cost of fraud. Overall, organizations lose 5% of revenue to fraud annually. The ACFE found that the average cost of fraud is more than $4.7 trillion worldwide. Twenty-one percent of all cases examined by the ACFE had losses of $1 million or more, bringing the overall average loss per case to $1.8 million.

“Occupational fraud is likely the costliest and most common form of financial crime in the world,” stated John Warren, J.D., CFE, vice president and general counsel of ACFE. “This is bigger than healthcare fraud, tax evasion, money laundering, and identity theft.” Fortunately, controls are working to prevent and detect fraud. For example, the median loss for companies with fraud hotlines is $100,000 compared to $200,000 for those without hotlines.

Construction companies must take fraud seriously and allocate the necessary resources to prevent and detect fraudulent activities. The financial impact of fraud can be significant. By implementing strong internal controls, regular risk assessments, and creating a reporting culture, construction companies can protect themselves against fraud and safeguard their finances and reputation.

Types of Fraud

Asset misappropriation is the most common but least costly type of occupational fraud scheme across all industries. Eighty-six percent of fraud cases were due to asset misappropriation resulting in a median loss of $100,000. Financial statement fraud schemes are less common, but the losses are five times higher. While only 9% of cases studied were attributed to financial statement fraud, the median loss was $593,000.

Corruption is prevalent in every global region and industry, especially construction. For example, more than half of all construction cases were due to bribery, kickbacks, conflicts of interest, bid-rigging, and various other forms of corruption.

The large sums of money involved in construction projects, the complex nature of construction contracts, and the significant role played by government officials and regulators contribute to corruption on the job. Therefore, contractors must establish and rigorously enforce strong ethical standards to prevent corruption. This includes having a robust code of conduct that prohibits corrupt practices and ensuring that employees and contractors know these policies and the consequences.

Companies can also conduct due diligence on contractors and suppliers before hiring them, monitor financial transactions for red flags, and have a whistleblower policy to encourage reporting suspected corrupt activities. Corruption can have considerable consequences for construction companies and the broader public. It can result in inflated project costs, substandard quality of work, and undermining public trust in the industry.

Billing fraud is also common in construction. Twenty-four percent of the cases examined involved contractors or suppliers inflating invoices or submitting fraudulent bills for work that was never done. The number of subcontractors and suppliers involved in a project and the complexity of construction contracts make it difficult for companies to monitor and verify invoices, leaving them vulnerable to fraudulent billing schemes.

Contractors must implement adequate controls and processes to prevent and detect billing fraud, such as conducting regular audits of invoices, verifying the legitimacy of suppliers and subcontractors, and having a whistleblower policy.

Another type of scheme commonly found in construction is payroll fraud. Corrupt employees receive payments for hours not worked or work that still needs to be performed. This type of fraud also accounts for 24% of construction fraud cases.

Payroll fraud involves complex schemes and can go undetected for extended periods. Typically, fraudsters:

• Falsify their time records to reflect that they worked more hours than they did.

• Ask a colleague to clock in or out for them, even if they are not at work.

• Create fake (ghost) employees in the payroll system and issue paychecks to them.

• Manipulate an employee’s pay rate.

Although cryptocurrency was used in a mere 8% of the cases ACFE examined, anecdotal evidence suggests an increase in this type of fraud moving forward. The most common ways cryptocurrency was used in fraud schemes were making bribery or kickback payments or converting misappropriated assets to cryptocurrency.

Construction companies can prevent payroll fraud by implementing controls such as verifying employee identities, requiring multiple levels of approval for payroll changes, implementing electronic timekeeping systems, and regularly monitoring and reviewing payroll records.

Fraud Detection & Prevention

Policies and procedures can be implemented to prevent and detect fraud. These include segregating financial duties, conducting background checks on employees, contractors, and vendors; establishing a whistleblower policy; analyzing financial and operational data to identify red flags, and implementing strong internal controls. The most common ways construction companies uncover fraud are through tips, internal audits, management reviews, accidental discoveries, and external audits.

Two simple controls—job rotation/mandatory vacation policies and surprise audits—were associated with at least a 50% reduction in median loss and median duration for fraud schemes. Even so, these controls are not widely used according to ACFE.

Battling Construction Fraud in a Fragile Economy (Grant Thornton. Greg E. Ross, Alex Koltson, and Tim Lynch. March 28, 2023) offers several other recommendations to prevent and detect fraud:

• Incorporate detailed cost estimates throughout the construction lifecycle.

• Use industry benchmarks, price indexes, and other data to estimate actual costs compared to amounts billed.

• Perform risk-based vendor due diligence.

• Identify potential conflicts of interest across seemingly separate entities.

• Assess performance risk if the subcontractor or supplier has a history of liens, safety violations, or litigation.

• Understand the likelihood of regulatory risk due to hiring companies or individuals with a track record of inviting attention from law enforcement.

• Implement enhanced oversight of high-value assets.

• Ensure proper video monitoring and physical access controls (e.g., ID card swipes) at warehouses and storage locations.

• Rotate the individuals involved in the physical supply chain

and logistics process.

• Implement regular inventory cycle counts to quickly identify discrepancies between physical and system records.

• Confirm that allegations are properly investigated, remediated, and communicated throughout the organization.

• Incorporate centralized oversight for labor compliance.

• Institute a centralized or regional function to identify unexpected labor rate and cost anomalies.

• Develop a standardized and automated process to collect, process, analyze, and identify labor cost insights that require investigation.

• Set expectations for a project cost audit.

• Add language on audit rights to construction contracts to deter inappropriate behavior.

Profile of Fraudster

Anyone can commit fraud, from a C-suite executive to a janitor, if there is opportunity and motive. Therefore, contractors should watch what is happening within their organization and its employees.

Although owners and executives committed less than a quarter (23%) of occupational frauds, the losses in these cases were higher – $337,000 per owner, $125,000 per manager, and $50,000 per employee.

Eighty-five percent of fraudsters displayed at least one of these behavioral red flags: living beyond their means (39%), having financial difficulties (25%), having an unusually close association with a vendor or customer (13%), acting irritable (12%), bullying or intimidating others (12%), going through a divorce or family problems (11%), or having a “wheeler/dealer” attitude.

Nearly half of all occupational frauds originated in the operations (15%), accounting (12%), executive/upper management (11%), or sales (11%) departments. Notably, only 6% of perpetrators had a prior fraud conviction.

The cost of fraud is not limited to financial losses alone. Reputational damage, loss of customer trust, legal and regulatory penalties, and other indirect costs can impact the affected organization and its stakeholders in the long term. Therefore, organizations must prioritize fraud prevention and detection efforts as part of their overall risk management strategy. By taking a proactive approach, construction companies can minimize their risk of financial loss and other damages while promoting a culture of transparency and integrity.

About the Author . . Salvatore Schibell, CPA, CFP®, CGMA, MS Taxation, MBA, is the tax partner at Lawson, Rescinio, Schibell & Associates, P.C. He is a profit improvement expert who focuses on helping construction contractors make more money. Sal can be contacted at 732-539-7328 or salschibell@lrscpa.com.

cost escalation, infrastructure funding among issues before legislature

By: ryan sharpe, director of government affairs and communications

It’s hard to believe that it’s been three years since COVID forever changed our world, yet our industry is still feeling its impact, including supply chain issues and cost increases for a variety of materials. UTCA has continued to bring this issue to the attention of our lawmakers who have responded by sponsoring legislation to provide relief to affected contractors.

This article has previously covered the enactment of legislation that created a New Jersey Department of Transportation (DOT) cost escalation reimbursement program as well as a measure that adjusted the dates of that program to cover the time period in which the increases were most severe. That bill making reimbursement available for awarded contracts bid between before December 1, 2021 was signed into law and the DOT re-opened the program a week later.

While we were pleased by these developments, we are concerned that this reimbursement program is limited only to DOT contracts and Small Business Enterprises. As such, we helped develop legislation to create a cost escalation program that is available for additional government projects and is available to all public work contracts.

We are pleased to report that this bill was introduced in March by Senator Vin Gopal (D-Monmouth). UTCA worked closely with the sponsor of the bill, S-377, which allots $25 million to reimburse contractors for material costs that increased by five percent or more on contracts with local, county, state and bistate agencies. The program would be applicable to projects with a value of $25 million or less. We have also received a commitment from a member of the Assembly to sponsor this measure.

Another bill that has been garnering attention is a measure that would allow the use of a larger percentage of Recycled Asphalt or RAP. Under the bill, counties and municipalities receiving state funds for roads would be allowed to use up to 50% of recycled, or reclaimed, asphalt in base and intermediate paving and a maximum of 35% on surface pavement. Currently, the maximum amount of RAP that can be used is 25% for base and intermediate courses and 15% for surface paving.

UTCA is also continuing to advocate for additional funding to be allocated to water and transportation infrastructure projects. We are working with a coalition that is seeking to build on last year’s $300 million appropriation for clean water by aiming to secure $700 million in this fiscal year. Additionally, we are push-

ing for the Senate to take up a bill that would allow New Jersey to apply for $10 million in federal FEMA money that would go to resiliency and hazard mitigation projects. This measure has been approved unanimously by the Assembly and awaits a Senate vote.

In addition, we are expecting the introduction of a measure that establishes work zone speed cameras on the state’s roadways. Legislation being drafted would direct fines from violations to the State Police to increase their presence on job sites. Unfortunately, the need for this type of program was recently underscored by a tragic accident in Maryland which took the lives of six highway workers.

Another issue affecting the industry is the release of rules that would implement the components of New Jersey’s so-called “Environmental Justice” law which aims to limit the construction and expansion of pollution generating facilities in “overburdened communities”. UTCA’s engagement with lawmakers on the bill resulted in changes to the legislation that will help ensure vital projects are not unilaterally blocked. We are also preparing comments to seek changes in the proposed rules to mitigate their impact on the industry.

Another significant piece of legislation that was recently enacted will overhaul the state’s campaign finance laws. This new law will impact on political contributions made by our members as well as contributions to and from Constructors for Good Government which is the Political Action Committee (PAC) that supports candidates and issues affecting the UTCA.

For the past few years, so called Super PACs, which often have minimal reporting requirements and often don’t reveal their donors, have proliferated in New Jersey. In order to combat the growing influence of these groups, the Legislature sought to increases transparency and level the playing field for standard candidate accounts which must disclose significantly more information.

The result was a new that law increases most contribution limits, eliminates “local pay-to-play” restrictions, lowers the reportable contribution amount from $300 to $200, and increases disclosure requirements for Super PACs. Members should consult their attorney or UTCA staff for guidance on the new law to ensure their contributions are compliant.

The Legislature has returned from it’s annual “budget break” and is now formulating the state budget based on the spending plan Gov. Murphy proposed in February. After six weeks of hearings, lawmakers will potentially add or subtract from the proposed $53 billion state spending plan that must be passed by July 1. UTCA has been engaging with lawmakers and working with our partners to advocate for the inclusion of critical investment in infrastructure.

The passage of the budget this month is typically the last time the Legislature will meet until after this fall’s elections, in which the Senate and Assembly are both on the ballot. And with 16 members not seeking re-election, the makeup of this body will look very different in January of next year. This will likely impact on what bills are considered and passed in the “lame-duck” period after the election and before the new lawmakers assume office.

As always, there have been recent developments in the political front that could also impact the industry. President Biden

has announced he will seek re-election which affects others who were said to have been considering a presidential run, including Governor Murphy and Senator Cory Booker. On the Republican side, former President Donald Trump has announced his candidacy and former New Jersey Governor Chris Christie is also considering a second run for President.

And here in New Jersey, where the election cycle never ends, Jersey City Mayor Steve Fulop has officially announced his campaign to replace the term-limited Phil Murphy while other potential candidates, including former Senate President Steve Sweeney and 2021 Republican candidate, Jack Ciattarelli, are also rumored to be planning runs for Governor.

As always UTCA will be monitoring all of these issues closely and engaging with policymakers to ensure the interests of the infrastructure industry are represented.

the uncertain future of noncompete agreements

By: jonathan landesman, esq. and aislinn srocynski, esq.

New Jersey contractors planning a large reduction in force (“RIF”) have long been required to implement that RIF in compliance with both the federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq. (“Federal WARN Act”) and the Millville Dallas Airmotive Plan Job Loss Notification Act, N.J.S.A. § 34:21-1, et seq. (“NJ WARN Act”). With recent amendments to the NJ WARN Act having taken effect as of April 10, 2023, contractors should be mindful of the new differences in scope and obligations as set forth in the Federal WARN Act and the newly amended NJ WARN Act. Importantly, union contractors are unlikely to be subject to the requirements of either the Federal WARN Act or the NJ WARN Act in connection with the layoff of union laborers upon the conclusion of a particular construction project.

Covered Employers. The Federal WARN Act applies to “business enterprises” that have 100 or more employees, across all the business’ locations. A “business enterprise” may include “independent contractors and subsidiaries which are wholly or partially owned by a parent company.” Under the Federal WARN Act, a business may meet the 100-employee threshold by having either 100 full-time employees or 100 or more employees, including part-time employees, who in the aggregate work at least 4,000 hours per week excluding overtime.

Under the NJ WARN Act, as amended, an employer is subject to the law’s requirements if it has at least 100 employees, irrespective of whether those employees are full-time or part-time and without regard to hours worked.

Triggering the Notice and Other Requirements. The Federal WARN Act is triggered in the event of a plant closure or mass layoff. Under that law, a plant closing occurs where an employment site (or one or more operating units within an employment site) will be shut down, resulting in an “employment loss”1 for 50 or more full-time employees during a 30-day period. A mass layoff, under the federal statute, is a reduction in workforce that is not the result of a plant closure, that results in an employment loss at a single site within a 30-day period of: (a) 50 or more full-time employees, provided that the affected employees constitute at least 33% of the active full-time workforce at the site; or (b) 500 or more full-time employees. Where the number of employment losses within a 30-day period falls below the above minimums, but the total number of employment losses in a rolling 90-day period reaches the threshold level, the Federal WARN Act will apply unless the employer demonstrates that the em-

ployment losses during that 90-day period result from separate and distinct actions and causes.2

The NJ WARN Act differs significantly from the Federal WARN Act with respect to triggering events. As amended, the NJ WARN Act is triggered upon a layoff of at least 50 employees at, or “reporting to” an “establishment.” Both full-time and parttime employees are counted towards the 50-employee threshold, and there is no consideration of what percentage the affected employees constitute of the overall workforce. Further, with the statute’s broad definition to “establishment,”3 layoffs at all the employer’s locations within the State will be counted towards the 50-employee threshold.

Union contractors frequently hire union laborers to perform work on a particular project and later lay off those workers en masse at the conclusion of that project. Federal regulations provide that notice under the Federal WARN Act is not required if the “layoff is the result of the completion of a particular project . . . and the affected employees were hired with the understanding that their employment was limited to the duration of the . . . project,” so long as the employees were “clearly” informed “at the time of hire that their employment is temporary.”

While New Jersey does not have a comparable administrative regulation to 20 C.F.R. 639.5, quoted above, the definition of “establishment” in N.J.S.A. § 34:21-1 specifically excludes “a temporary construction site.” Though the term “temporary construction site” is not otherwise defined in the statute, legislative materials, or case law, the plain language of the statute combined with the requirement that an “establishment” be operated by the employer for at least three years, supports the conclusion that a layoff of union workers at the conclusion of a construction project will not subject the contractor to the NJ WARN Act’s requirements.

Employer Requirements. The Federal WARN Act requires that, at least 60 days before a plant closing or mass layoff, an employer provide written notice of the impending RIF to, most notably: (a) affected non-union employees; (b) representatives of affected union employees; (c) the designated state official in the jurisdiction; and (d) the chief elected local government official where the employment site is located. The Federal WARN Act does not mandate payment of severance or other financial benefits to affected employees.

The newly amended NJ WARN Act imposes substantially more burdensome requirements on employers. Under this statute, employers must provide written notice of an impending RIF to affected employees (along with union representatives and certain government officials) 90 days in advance thereof; a full month earlier than what is required under federal law and what was required prior to the amendment. Further, prior to the recent amendment, employers were required to provide affected employees with severance pay only as a penalty in the event of a failure to provide timely notice. Now, the amended NJ WARN Act compels employers to pay severance to all affected employees, at the rate of one week’s salary for each year that the employee was employed. 4

Penalties. Employers who fail to fulfill their obligations under the Federal WARN Act may be liable for penalties including up to 60 days’ back pay plus benefits for affected employees and $500 per day civil penalty to the local government where the RIF occurred. Under the NJ WARN Act, should an employer fail to timely provide the requisite 90-day written notice to an affected employee, the employer must also pay an additional four weeks’ severance to that employee (in addition to the statutorily mandated severance pay discussed above).

With the recent amendments to the NJ WARN Act expanding the number of employers subject to compliance therewith and imposing more burdensome obligations upon those employers, contractors contemplating a RIF should be sure to pay close attention to what is now required under both the Federal WARN Act and the NJ WARN Act.

1 An “employment loss” under the Federal WARN Act includes an employment termination (other than retirement, voluntary departure, or discharge for cause), a layoff of at least 6 months, or a reduction in an employee’s hours of over 50% in each month of a 6-month period.

2 Contractors should note that there are several categories of workers who do not count towards the minimum thresholds under the Federal WARN Act, including part-time employees, workers who retired, resigned, or were terminated for cause, and certain workers who were offered a transfer to another location.

3 An “establishment” is defined as “a place of employment which has been operated by an employer for a period longer than three years” and “may be a single location or a group of locations, including any facilities located in this State.”

4 Notably, the amended NJ WARN Act’s expanded definition of “employer” – in the context of the statute’s mandatory severance payment obligation – includes any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee, and includes any person who, directly or indirectly, owns and operates the nominal employer, or owns a corporate subsidiary that, directly or indirectly, owns and operates the nominal employer or makes the decision responsible for the employment action that gives rise to a mass layoff subject to notification.” This broadened definition may be argued to impose personal liability (with respect to any failure to pay required severance) under the NJ WARN Act upon non-ownership managers and corporate officers involved in a RIF.

with siblings at the helm, montana celebrates 30 years of success

By: ryan sharpe, director of government affairs and communications

When you enter Montana Construction you immediately encounter the elevator that takes you to the administrative offices on the second floor of their Lodi headquarters. While this may seem mundane, to Dominic Santaite Sr., the patriarch of the family that runs Montana Construction, having an elevator was the ultimate symbol of success for the company he and his children built.

Building on the pillars instilled by their father, a longtime construction executive, his three children have built Montana Construction into a powerhouse in the construction industry that, to date, has completed thousands of projects in New York, New Jersey and Pennsylvania and shows no signs of slowing down.

The Santaite siblings, Vincent and Dominic Jr. and Lisa Ballerini are understandably proud of the accomplishments of the organization that they originally ran out of the family home in Bogota with one computer and three pieces of equipment.

Vincent, who serves as Vice-President, founded the company in 1993 and was soon joined at the company by his sister, Lisa

who is the company’s president. A few years later, their brother Dominic joined the team and is now the Chief Operating Officer. Throughout the years, other siblings, uncles, cousins and in-laws have also come to work at Montana, making their story a true family affair.

And that family atmosphere is a source of great pride among the three siblings and something that extends beyond their blood relatives. They say their 200 employees are like family to them, noting that in addition to their annual Christmas Gala, they hold regular dinners with specific units to reinforce the familial bonds of the team and they buy lunch for the staff daily.

Of course, the lunches and the family atmosphere are not the only things that allow Montana to maintain the vast majority of its employees. In addition to the family atmosphere, their staff is well-compensated and enjoy generous benefits. Several employees have been with Montana since its founding 30 years ago and they experience very little turnover, especially among their office staff. They are now seeing the adult children of their longtime employees working at the company.

Having multiple family members on the team contributes to the company success because, as Vincent notes, they “have skin in the game.”

“Having friends and family working together is a win-win; you trust they will do the right thing and you get to reward them for it,” said Lisa. “It feels good, besides we were young, so we worked hard and played hard."

In the field, they also retain the majority of their workforce of 22 crews, which are comprised of members of Laborers #472 and

Montana Construction Lodi Office and Yard

Dominic Santaite, Sr., Vincent Santaite, Lisa Ballerini and Dominic Santaite, Jr.

Operating Engineers from Local #825. Their positive relationship with their labor partners and the fact that their staff is typically working year-round helps keep turnover to a minimum. And Vincent points out that many of the field staff who leave seek to come back to the company.

While Montana is wildly successful, the road to success was not always smooth. In fact, Montana wouldn’t even exist if Vincent didn’t decide to quit college and convince his father to get back into the construction business. The three siblings say they learned how to operate a construction company from their father who had previously run his own construction company.

Initially, Montana was performing small public projects like repairing catch basins, installing sewer laterals and manholes, and providing emergency service. With limited bonding capacity, they were unable to pursue larger projects and Lisa notes that she quickly learned the financial side of the business, including bonding and cash flow. In fact, in the early stages, Lisa notes that initially none of the siblings collected a salary because any income was going to pay the mortgage.

As a company headed by teens and early twenty-somethings they were often not taken seriously, and when they attended pre-construction meetings, they were sometimes asked where the company owner was. Lisa notes Montana is a Woman-Owned Business (WBE) and that, as a woman in a male-dominated field, she too, has sometimes been underestimated. However, she is quick to point out that the acceptance of women in the industry has improved dramatically over the years and notes the great relationships she has with many of her colleagues.

Despite the obstacles they faced early on, the Santaite siblings persevered and soon began expanding their operations, investing in new equipment and bidding on larger projects. In fact, they credit much of their success to lessons learned from their early challenges. This process, they say, helped them to stand out as a company that excels in communicating with

owners, engineers and residents. They also point to their experience working in the field for giving them unique insight into managing their teams.

"By doing jobs no one else wanted at times, we earned our reputation of integrity and hard work,” said Dominic. “It's nice to hear ‘that's a Montana job’ from competitors and engineers."

While they are capable of performing different types of construction projects, Montana is focused on the water and sewer work which they do extremely effectively and for which there is a growing demand.

They point to a handful of projects as examples of the varied types of work they have performed for different owners. For instance, Montana installed a flood control barrier in Green Brook for the U.S. Army Corps of Engineers. In Overpeck Park in Leonia, they installed approximately 10,000 feet of 72-inch and 66-inch sewer lines and also worked on the remediation of the Overpeck Park Landfill.

Montana Construction Team Members

Installation of a 48" water main transmission line valve

Armando Veguez, Executive Director, Mike Mauro, Director of Project Management and Scott Houlihan, Director of Construction at the Annual AWWA Convention where Montana Construction proudly sponsors and exhibits each year.

Most recently, Montana replaced over 5,000 lead service lines in Newark—all within 9 months. Due to the aggressive schedule, they were replacing 40 lead service lines a day and were forced to hire 70 new employees in a month.

As for the future, Montana does not expect to substantially change its scope of work and plans to continue working with its many existing clients who often reach out to them. The relationships with current and existing clients are what will continue to fuel the company’s growth. In fact, this belief is prominently displayed on their website in large letters that says, “We Build Relationships.”

“We have never been about chasing volume for profit,” says Vincent. “We are going to sustain what we are doing and focus on what we are great at.”

While they now do some private work and have opened a new office in Red Bank, Montana will continue to do what made them so successful over the past three decades. A key to that success is the superior--and around-the-clock—service they offer their cli-

ents. Indeed, Vincent and Dominic have both interrupted dates with their current wives to take calls about emergency work.

They also plan to continue taking an active role in the UTCA where Lisa serves on the Board of Directors. She says this role has helped her gain perspective and learn from other contractors. In addition, she values learning about issues facing the industry, noting UTCA keeps them “in the know.”

When asked about challenges they face, they cite New Jersey’s often onerous regulations, material cost escalation and supply chain issues, as well as the difficulties attracting skilled labor. They would like to see the industry address the labor shortage by encouraging young people to consider a career in the construction industry as an alternative to college.

As for their futures, the three siblings are still young enough that they are not planning to hand over the reins at Montana anytime soon. They all have children and agree that while the business is demanding, they are committed to spending more time with their families. Lisa and her brothers are busy with their children’s various sports, Dominic is aiming to squeeze in some more golf, while Vincent plays in a competitive pool league.

It isn’t often that you hear of a business that has survived and flourished for 30 years. It’s even more unusual to hear about a successful company that is wildly successful while being run by three siblings. But in talking to Lisa, Vincent and Dominic, it becomes clear very quickly why they have been so successful. Their commitment to family--including their work family--runs incredibly deep and that is such an integral part of Montana’s success.

And while they are proud of what they built from practically nothing, it is also clear that they are driven to continue the work that has propelled them to unparalleled success over these past three decades. If the past 30 years are any indication, the future is bright for Montana Construction. We congratulate them on achieving this milestone and we look forward to watching Montana flourish for many years to come.

"Having family & friends working together is a win-win"

- Lisa Ballerini

Vincent Santaite with Roger Setya, Chief Engineer at Montana Construction

Montana Construction Crews

survey says? bipartisan majorities support water infrastructure investments

By: dan kennedy, senior director

In 2022 we reported to you progress on specific action items contained in UTCA’s Water Infrastructure Investment Strategy. UTCA has been relentless on water infrastructure. Our policy focus is necessarily concentrated on the funding but also goes past that basic component of our advocacy. UTCA has embraced supporting corresponding actions related to investment for all water systems in the State of NJ including filling the existing funding gaps with more funding at every level, complemented by capital planning; capacity building in water systems; reduction in project review times; and critical project prioritization.

In summary, while we are nowhere near “mission accomplished” we are making measurable progress not just for contractors but for the State of New Jersey. On behalf of our member firms, UTCA strives to create a positive impact on New Jersey citizens, the health of the environment and our shared economic prosperity by leveraging its respected expertise and relationships to promote a sustainable infrastructure sector. These investments in water infrastructure are not just good for contractors. They are indisputably positive for residents and businesses and are widely supported by voters.

But I am paid to say that, aren’t I? As an employee of a trade association with a clear mission to promote construction opportunities, readers could rightly see this as just an optimistic narrative from a trade association staffer. So let me back this up with something more tangible.

2023 Value of Water Index- National Survey Results

Our partners at the US Water Alliance recently conducted their annual survey to see where national opinions are towards infrastructure after Year 1 of the Bipartisan Infrastructure Law funding increases. The bipartisan polling team of Fairbank, Maslin, Maullin, Metz & Associates (D) and New Bridge Strategy (R) recently completed a national voter survey to assess views of key water quality and water supply issues and their support for significant investments in water infrastructure. The data show that voters continue to prioritize having a safe, reliable supply of clean water and strongly support major investments in water infrastructure improvements. Key specific findings of the survey include:

• Ensuring a reliable supply of water ranks among voters' top federal priorities. Eighty-five percent said that "ensuring a reliable supply of water" is an “extremely” or “very important” pri-

ority, on par with strengthening the economy (85%) and reducing inflation (84%). Addressing drinking water contamination (82%) and reducing pollution in rivers, lakes, and oceans (73%) also rank among the top priorities.

• Voters are divided about the condition of national water infrastructure but continue to offer positive evaluations of local water infrastructure. Voter ratings of the condition of water infrastructure have remained consistent in recent years. Two in four (40%) rate the nation’s water infrastructure as being in “excellent” or “good” condition, while 71% offer the same rating of their local water infrastructure.

• More than two-thirds (68%) say they would view an elected official who supported new investments in water infrastructure more favorably. One-third indicated that they would view an elected official who supported these types of investments much more favorably and 35% said they would view them somewhat more favorably. This perception cuts across partisan lines, with most Democrats, Independents, and Republicans all indicating that they would take a more favorable view of an elected official who backed investment in water infrastructure.

• Majorities are willing to pay more on their water bills to reduce pollution, increase safety, and prevent shutoffs for non-payment. As shown in the figure below, majorities of American voters are willing to pay increased rates for a variety of water infrastructure needs.

The following is an infographic that summarizes some additional interesting voter sentiment:

Taken together, the results show that voters nationally continue to strongly value and support investments in water infrastructure. They rank water issues among their top priorities for the federal government, and although many are unfamiliar with the Bipartisan Infrastructure Law, they offer broad and strong approval for it when provided with a description.

Clean Water, Healthy Families, Good Jobs Campaign Survey Results

Using similar polling techniques, NJ-based polling was conducted by Publitics / InfluenceIQ in March 2023 to assess opinions on water infrastructure funding and awareness of water issues in the Garden State. New Jersey voters recognize that access to clean water is essential.

Key findings were focused on Governor Murphy’s announcement that he would support investing more federal dollars from New Jersey’s remaining share of American Rescue Plan funding in upgrading water infrastructure. This has been a key focus of UTCA’s advocacy over the past year. The Survey showed that 86% of New Jersey voters approve of the Governor’s budget announcement that he

plans to work with the Legislature through the FY ’24 budget process to invest more in water infrastructure. The Governor’s action draws support from a majority of Democrats (95%), Republicans (78%) and unaffiliated voters (82%). As a funding priority, few issues garner as much support across party lines as water and we are using this information accordingly.

Moving Forward

UTCA will continue to work closely with partners (some new / some old) to increase the awareness of residents and businesses that rely heavily on water infrastructure every day. We remain of the belief that investment in water infrastructure at the local, state, and federal level will foster healthier communities and a stronger economy, ensure new job growth and increase our economic competitiveness as a state.

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 voters now expect real progress and that is exactly what construction projects offer.

The raritan group: what we've learned from 80 years of business

by: william richardson, senior

In 1943, when my father, Harry A. Richardson, Sr., started the company that would become the Raritan Group, his only intention was to supply plumbers with toilets, sinks, and the like, but it was a fortuitous moment to get into this business. The United States was fighting World War II, and America was coming into its own as a manufacturing and industrial superpower—with New Jersey as a major hub.

Over the course of eighty years, we’ve had our ups and downs, and we’ve learned a few important lessons that I hope are relevant beyond our sector and the state of New Jersey.

People are your greatest asset. Four generations of Richardsons make us a quintessential family company. My three sons jointly run the company today, and their level of cooperation sets a company-wide example. From the Richardsons in the front office, to the sales and technical teams, to the office staff, everyone here is fully committed to excellence and ethics. Without them we’d have nothing, and we stand by them when health or personal crises arise. The loyalty is mutual, and we grow more effective together, decade after decade. (And while they’re not technically “people,” the dogs here at Raritan play an essential role in our company culture and connect us all on a deeper level.)

Ride out economic trends. The history of Raritan is a history of American industrialization. In the 1950s and 1960s, as New Jersey became a world capital of industry, chemicals, medicines, and metalworking, Raritan took part in the dynamic growth. During my tenure, we added more industrial capacity. Ensuing decades saw ebbs and flows in the sector, accompanied by uncertain times for the company, but we always prevailed. Raritan was well positioned for the resurgence of American industry in recent decades as well as the infrastructure investments of the past five years, including water treatment and lead pipe replacement.

Watch for shifts in technology. Raritan operates in a fiercely competitive market, and we can’t afford to be complacent when it comes to materials and methods. New developments are always on the horizon, and we have a strong track record of seizing on promising technologies. We were one of the first companies to use plastic piping, one of the first to use ball and butterfly valves. Raritan was at the forefront of valve automation. We opened our own in-house valve automation shop over 40 years ago selling and servicing, electric, pneumatic, and hydraulic actuators for both quarter-turn and muti-turn valves. This stance demands imagination, investment, and a

tolerance for risk. Because growth and change have been constants in our history, we are ready for anything. The next eighty years are sure to hold just as many if not more surprises as the last eighty. Raritan will be ready.

Pay attention to customers' needs. Simply put, Raritan wouldn’t exist without our customers. When they’re successful, when they look good, they become repeat customers. Forming lasting partnerships with them has always mattered more than isolated transactions. For public works and private jobs alike, we prioritize getting to know the people behind the projects. What are their hopes? What keeps them up at night? Besides delivering excellent service—which is a given—how can we earn their enduring trust and add value as partners? Sometimes, trust is built up through casual conversations about dogs, kids, or college football (Go Irish!). Honoring our customers means that every transaction is fair and moral. That’s been the case for eighty years.

Hard work. My father grew up with the Depression and taught his children that while God will always provide, you have got to work for it. Raritan has always been known for the long hours we put in. We load and strap our trucks before dawn, even when it’s freezing outside. Our locations in Edison and Gloucester stay open when the customers need us—weekend and holidays included—and we carry products and sizes that others don’t.

I’m proud to say that Raritan is a New Jersey company, with about 70% of our business coming from the Garden State. It’s a thriving, diverse, dynamic place to live and work, with natural beauty to match its industrial might, and we are committed to supporting local causes that make the community even stronger—and ready for the next eighty years.

Bill Richardson, Senior works every day with his sidekick, Henry.

Raritan's retail location in Red Bank, NJ - Circa early 1960's.

men's health month

By: brian fish, account manager- employee benefits, ioa

June is National Men’s Health Month and no, going to a doctor is not a sign of weakness and it is ok to ask for help if you are hurt or struggling. “It’s not that bad” or “what are they going to tell me that I don’t already know” seem to be common responses when asking about someone’s health. My personal excuse was always, “how is talking to a stranger going to help?”. This is a call to stop pretending and encourage the men in your lives to make the call or set the appointment.

My understanding of what it is to be a man came from watching my father and grandfathers. Just like the wonderful world of media tells us, if you fall down and get hurt, get back up, rub some dirt on it and keep it moving. Hit a finger by swinging a hammer, scream silently and mumble profanities under your breath, but do not let the crew know because you will never hear the end of it.

For most men, masculinity is a trait passed down and ingrained in our DNA over centuries, it is the underlying reason that the majority do not express needs for outside help. It was my impression that you can be hurt mentally or physically; just keep your mother and sisters in the dark; because you need to be strong for them always. We must be the protectors, hunters, builders, and suppliers for our families. There is no room for unwelcome strangers, no time for unnecessary appointments or wasting money when we can just work through the discomfort or lingering pains.

It is time to break the cycle that men should not ask for helpyour masculinity does not impress anyone if the body and mind cannot perform the tasks at hand.

Below are a few bullet points from BetterUp.com to help get you started. Although geared towards mental health, the concept can

also be used for physical health.

Take steps to foster psychological safety

Psychologically safe team members feel comfortable sharing ideas, expressing concerns, and asking questions without fear of negative repercussions. Take steps to foster psychological safety among team members, so they’re more receptive to discussing workplace well-being.

• Practice active listening. Be fully present when someone speaks, use nonverbal cues to indicate that you’re listening, reflect on what you’ve heard, and summarize it.

• Ask open-ended questions. Prompt discussions among team members by posing questions that require thoughtful answers and can lead to more questions.

• Recognize participation. When an employee shows vulnerability by asking a question or sharing an idea, express gratitude, empathy, and appreciation for their insight.

• Acknowledge issues and their impact. When problems or concerns arise, validate them and discuss possible impacts, as well as solutions.

These small actions will go a long way toward making people feel heard and valued, and they’ll encourage more employees to participate in workplace well-being discussions. Be prepared to follow-up on obstacles they identify. Follow-through is an important part of authenticity that will reinforce the psychological safety and positive feeling of being cared about that you hope to create.

Talk about how you prioritize your own well-being

Some employees may be especially resistant to discussing well-being because of the stigma around mental health. But studies show that workers want managers to talk about mental health even though 60% of employees say they haven’t spoken to anyone at their job about it before.

Encourage employees to open up by discussing your own struggles with mental well-being and the steps you take to address them and build mental fitness. This vulnerability goes a long way in helping your team feel more psychologically safe and comfortable discussing workplace well-being. It’ll also encourage them to follow in your footsteps and focus on their own personal well-being.

Discuss the resources available to employees

Companies may offer a variety of well-being tools, but that doesn’t necessarily mean that workers are aware of them or understand how to access them. In fact, nearly 46% of employees say their companies haven’t shared what mental health resources are available.

Review your company’s offerings with employees — including health and mental health benefits, access to sleep experts and nutritionists, coaching opportunities, financial counseling, and education and training. Workers who say their company has shared these resources are 61% more likely to believe that their company prioritizes their well-being.

Regularly speak with team members one-on-one

Demonstrate that employee well-being is a priority by providing opportunities for workers to share their ideas, questions, and concerns with you privately.

Talking about workplace well-being helps the entire company

These conversations not only help workers thrive, but they also create a culture of well-being, help the organization perform better as a whole, and positively impact the bottom line. Employees who understand that well-being underpins peak performance and believe their manager is invested in their mental fitness are more likely to take steps to improve their own well-being. This makes them happier, more creative, less prone to burnout, and more engaged at work, according to BetterUp research.

Additionally, improving workplace well-being for your team makes you look good, too. BetterUp research has found that mentally fit managers lead teams that are 31% more productive and have direct reports who are nearly 80% less likely to leave voluntarily.

Show your team that you are in their corner when it comes to their mental and physical health, and do not forget about yourself. Open up and start the conversation. Better communication leads to better ideas and clearer paths, team mentality, and safer work and more production.

four policy changes to help save lives in highway work zones

By: artba chair, paula hammond, senior vice president WSP USA

Reprinted with permission from ARTBA

Six roadway workers were killed on March 23 when a driver traveling at high speed collided with another car on Interstate 695 near Baltimore, Maryland.

The force of the crash sent the vehicle barreling into a highway construction zone, causing it to flip. A video from a nearby Maryland Department of Transportation camera makes it clear no one in the pathway of that car had any chance to survive. The loss for the families is devastating and something that everyone in the transportation community also feels.

The names of the fallen should be remembered: Rolando Ruiz (46); brothers Carlos Orlando Villatoro Escobar (43) and Jose Armando Escobar (52); Mahlon Simmons III (52) and his son, Mahlon Simmons II (31); and Sybil Lee DiMaggio (46).

As one victim’s widow told reporters, “Innocent people pay later for [motorists] mistakes.”

The five men and one woman were parents, brothers and a sister, uncles and an aunt, and in some cases, the sole provider for their family.

According to National Work Zone Safety Information Clearinghouse (workzonesafety.org) data, 857 people were killed in work zones in 2020—the most recent year for which data is available— because of mistakes by others.

One hundred percent of these incidents are preventable.

The 2021 Infrastructure Investment and Jobs Act (IIJA) law is delivering significant new federal resources to states for long overdue improvements to America’s transportation network. This means a proliferation in the number of construction zones, which in turn, means a much greater risk exposure for both highway workers and drivers.

This serious public health and safety issue takes on new urgency with another busy spring construction season getting underway.

While there is no replacement for alert and responsible driving, there are at least four policy-related actions state transportation agencies, elected officials, and the Federal Highway Administration (FWHA) could be initiating now to improve conditions for roadway construction workers:

• Classifying Workers as Vulnerable Road Users: The IIJA requires FHWA to assist states in developing goals and programs aimed at protecting “vulnerable road users” or “VRUs,” such as pedestrians. Roadway workers are the epitome of “vulnerable” and federal and state agencies should work jointly to prioritize their safety to the same degree as other system users. This recognition is important as all states are required to complete an initial VRU Safety Assessment by November 15, 2023, and include it as part of their Strategic Highway Safety Plan.

• Automated Speed Enforcement: When drivers know they will be ticketed for speeding, they will slow down. Illinois, Maryland, Pennsylvania, Michigan, Washington State and New York have automated speed enforcement laws in place, and Indiana and Kentucky are working on approval. A study in Maryland showed an 80 percent reduction in speeding violations after automated speed enforcement began. Such laws should become more widespread. The IIJA allows states to use part of their federal funding to pay for such enforcement.

• Positive Protective Measures: States can require increased use of barriers and other positive protection/separation between motorists and workers. In addition to traditional concrete barriers, steel, movable, and mobile barriers, greater use of truck-mounted attenuators (crash cushions) and portable rumble strips are all deployable options.

• Work Zone Safety Contingency Funds: The IIJA allows state agencies to create contingency funds for additional protective measures for safety needs that are greater than anticipated when the contract was awarded. Creation of such funds would allow states and contractors to quickly add new measures to hazardous work sites, bypassing potential concerns raised when additional costs are added to a project.

By making such policy enhancements, transportation officials and policymakers at all levels can help reduce the number of work zone crashes to make certain that such a tragic loss of life like in Baltimore never happens again.

About the Author . . . Paula Hammond is a senior vice president with WSP USA and 2023 chair of the American Road & Transportation Builders Association (ARTBA).

can my subcontractor ruin my insurance?

By: adam puharic, puharic & associates, INc.

Congratulations! Your business is growing. You have projects lined up and opportunities for future growth. You need to engage subcontractors to take a portion of your work, and this will enable you to realize your financial dreams.

However, the hiring of subcontractors can also be the source of additional risk and liability. Without taking the necessary precautions, the error of a subcontractor could lead to a denied insurance claim, a ruined customer relationship, and worse – potential personal liability.

First, a disclaimer: This article is for informational purposes only and that readers should contact their insurance provider for assistance in their specific cases.

In the simplest terms possible: Subcontractors work for you, you work for your customers, and you are responsible for both your work and the work of your subs. However, your insurance does NOT automatically include subcontractors. So, a loss or a claim could trigger an insurance carrier denial, or worse, a dispute between the subcontractor’s policy and your own. The customer is left with a loss, and no money to make themselves whole.

There are tried and true ways that any company who uses subcontractors can simplify the lines of authority, clarify whose policy is responsible for the claim, ensure that your insurance responds for those items as you expect it to, and improve your overall risk management. I refer to these items as the Four Golden Rules of subcontractor insurance. If you practice these Four Golden Rules, you will have less uncovered insurance exposures, and more protection as you grow your business. The consequences of not following these steps could undo all of your business growth planning.

Simply stated, all subcontractors must:

1. Carry insurance with the same or better limits than you do.

2. Show you, on an annual basis, a certificate of insurance with valid coverage.

3. Name you as Additional Insured with regards to General Liability.

4. Hold you harmless and waive subrogation on future claims.

Now let’s break down each item:

Without exception, your subcontractors should carry valid General Liability, Workers Compensation for their employees, Professional Liability if their exposure or licensing demands it, and Umbrella if you carry it as well. There could be an entire article written on whether a subcontractor needs Workers Compensation, but for the purpose of this article, if you carry it, so should they.

They should not only carry this insurance, they should also present a valid, current certificate of liability insurance. Your agent should be able to help you decipher it. Additionally, the sub should carry the same or better insurance limits as you carry. Never accept a subcontractor who won’t protect you with the same limits you offer to your customers.

The subcontractors need to name you as an Additional Insured with respect to General Liability. Make no exceptions on this item. The Additional Insured status will allow the insurance policy of the subcontractor to respond to claims you are drawn into on jobs where the subcontractor is involved. You need this to happen so that both policies are not drawn into the claim. For the sub, the cost of working for you is that they agree to use their insurance instead of yours.

Finally, a hold harmless agreement and waiver of subrogation are needed to further simplify and clarify the lines of responsibility. While beyond the scope of this article, for simplicity sake, a hold harmless agreement will define who pays when it is the subcontractor’s fault, when it is a combination of your and the subcontractor’s fault, and when it is only your fault. I am not an attorney, but as a simple rule of thumb, consider the following:

1. Your subcontractor’s insurance should pay when they do something wrong, commonly referred to as their negligence.

2. Your subcontractor’s insurance should pay when you both are involved in something wrong, or shared negligence.

3. Your insurance should pay when it is your sole negligence. A waiver of subrogation promises that if the subcontractor’s insurance pays a claim, they will not seek reimbursement from you.

By practicing the Four Golden Rules of subcontractor’s insurance, you can better protect your own businesses, simplify the chain of responsibility, and bring your business dreams to life with the proper risk management.