Murdock Law associate Kate Bodenbach recently was invited to speak about current legal issues affecting the construction industry with members of Milwaukee’s chapter of the National Association of the Remodeling Industry (NARI). In particular, the discussion focused on the effect of Wisconsin’s Safer at Home Order (EO#28) on Wisconsin’s contractors.
Thankfully, the construction industry has been deemed essential in Wisconsin and avoided widespread closures, but for most contractors, it is not business as usual. Below are some of the most pressing questions asked by Wisconsin construction professionals.
How can my contracts respond to unforeseen pandemic type issues causing job delays?
Project delays can be common in the construction industry for many reasons. While COVID-19 may be causing delays for many projects, contractors should use this time to think about how to protect themselves for any type of delay that may arise on a construction job, not simply those that result from a virus. For example, supply chain issues may cause delays even after state shutdowns are lifted.
The challenges presented by COVID-19 reinforces the need for contractors to have contracts on every job that address delays for whatever reason they occur. The following are some clauses that help contractors respond to delays beyond their control:
- Substantial Completion Date: A substantial completion date creates a starting point for parties to work with if delays occur and how to shift the expectations of the parties if delays occur.
- Delay Clause: A delay clause creates the option for contractors to notify a client in writing of a delay that specifies the reason for the delay and a new proposed completion date.
- Time is of the Essence Clause: This clause creates the presumption that the times and dates specified in a contract are important, vital, and mandatory to the contract.
- Change Order Clause: Change orders should always be executed in writing and signed by all parties to the agreement. The Home Improvement Practices Act requires contractors to give timely notice of impending delays to the homeowner.
- Late Payment Clause: Late payment clauses are great tools to establish what happens if payments are late, whether grace periods or penalties exist, they can set dates when contractors may stop work and remove crews from a site for nonpayment, and explain how late payments affect a job’s completion date.
These types of provisions help contractors protect their interest in performing quality work, allocating workers to job sites, and receiving payment.
Is my construction business “Essential”? does it matter what type of company I am or what type of work I do?
Wisconsin’s Safer at Home Order has generally made construction an essential service. The Order also permits critical trades, including, but not limited to, builders, plumbers, electricians, carpenters, laborers, fabricators, HVAC workers, and painters, to continue work.
One type of construction that is potentially non-essential is purely aesthetic or optional remodeling work. The Order’s language states that “optional or aesthetic construction should be avoided.” And any optional or aesthetic work that continues must, to the extent possible, comply with social distancing requirements while carrying out operations. If contractors are concerned whether certain remodeling work is permitted under the Order, it is best to speak to an attorney.
The Order also imposes restrictions on exterior construction. Aesthetic or optional exterior work and landscaping must be performed by one employee or worker per job site at one time. This includes while traveling to a job site, only one person per car or truck is permitted. Aesthetic or optional exterior work requiring more than one person on a job site is prohibited.
What happens if local police stop my workers traveling to a job site or approach teams while on a job site? What should I say?
According to Wisconsin’s Safer at Home Order travel to perform work or supply materials on construction projects is permitted as essential. Therefore, any contractor, subcontractor, laborer, or supplier who must travel to a job site to perform work or supply materials is allowed to do so. Contractors don’t need to take any special steps to lawfully travel between work and their homes.
As a precaution, some construction firms and trade organizations have provided signs to their employee’s that say “Essential” to place in car windows. Some of our clients have had us prepare an “Essential Workforce Letters” to provide their employees, laborers, subcontractors, and suppliers if they are questioned by authorities about being engaged in “essential” work. The advantage of providing a legal opinion letter to employees is it can prevent an off-the-cuff response from causing problems for the contractor.
There is no one size fits all answer to how local authorities are enforcing Wisconsin’s Safer at Home Order. If approached by local law enforcement contractors should be prepared to explain the nature of their work and how it qualifies as essential.
Murdock Law has assisted many of its contractor clients to navigate new legal issues caused by COVID-19. Murdock Law is here to help contractors better understand their essential status and the legal risks involved in continuing, commencing, or delaying work based on Wisconsin’s Safer at Home Order.