We can all agree that “an honest day’s work deserves an honest day’s pay.”  Unfortunately, millions of workers across the country are victims of wage theft and don’t receive the full benefits of their work.  Moreover, general contractor’s who may be completely unaware that wage theft is happening may be liable for lost wages, damages, and attorney’s fees.  SkillSmart’s InSight technology is designed to both minimize liability for contractors and ensure workers receive the full benefits of their honest day’s work.

Most people are unfamiliar with wage theft, but it is the largest form of theft in the United States totaling more than $15 billion a year.  While it is prevalent in many industries, it is often undiscussed because it disproportionately affects the most marginalized — those in  lower wage, hourly jobs, who are most at risk of losing their job should they speak out against wage theft practices.  It occurs when workers are misclassified as contract workers instead of full-time employees, or at a lower salary level than is appropriate, and the employer withholds some of their pay, taxes, or benefits.

Wage theft can be particularly pervasive in the construction industry where there can be hundreds of subcontractors and workers on a single project.  A number of states and jurisdictions have passed laws to expand the responsibility of addressing wage theft beyond just an employee’s immediate employer to also include the prime contractors for whom the employer is working. These laws create a right of action for the employee against their employer and any contractor for which their employer is working.  In other words, all contractors are now responsible for making sure that every employee, for each of their subcontractors, is paid the correct, timely wage.

We believe technology can be used to help improve the well-being of people and communities, and wage theft is a perfect example of how that can occur.  Our InSight technology captures the wage information for every worker, of every subcontractor, working on a job-site and analyzes the wage data to ensure the workers are being paid the appropriate wages and benefits as well as flagging any discrepancies for the contractor and subcontractor. This provides visibility into the process, identifies any issues, and gives notice about potential wage theft instances to be quickly addressed.  This approach mitigates the liability for the prime and subcontractor – avoiding expensive damages and attorney’s fees, helps ensure subcontractors are appropriately paying their workers, and ultimately helps to achieve “an honest day’s work for an honest day’s pay” strengthening our workers and communities.

As we continue to navigate the effects of the COVID pandemic, businesses have confronted the challenges and opportunities left in the pandemic’s wake.  For example, the Great Resignation has created an opportunity for employees and employers to re-think, re-train, and refine what an evolving workplace looks like and what each stakeholder can get out of it.  We have also used this time to wrestle with our responsibility and step into our opportunity.

At SkillSmart, we first got into the technology business because we believed that technology could help communities thrive by focusing on the workers and businesses in those communities.  We believe that by creating a more connected ecosystem where better data is collected and provided in a faster, more efficient way to stakeholders – that better decisions can be made and outcomes for all stakeholders are improved.  Of course, we realize that technology itself can’t produce those better outcomes. Only when people are committed to those better outcomes and leverage our better technology can those improved outcomes be achieved.

We have turned our focus in the last few years to the construction industry which has typically been predominately white and male.  However, there are assumptions with each construction project that it will necessarily benefit a community – that it will create jobs or provide contracting opportunities to local businesses – but, too often, those components are only afterthoughts and its increasingly difficult to even articulate the benefit to the broader community.  Our goal is to work with owners to specifically track, manage, and demonstrate how their efforts do benefit the community.  Our tools also increase the transparency to increase opportunities for local businesses and residents to help that new project grow.  By increasing the visibility into these efforts, it helps to build trust in our communities because it provides the data that demonstrates our commitment to each other and the interdependence that makes us stronger.

This Labor Day, as we all continue to regain our footing and move forward, we reflect on our workers and how technology can enable them to be more successful to the betterment of our employers and communities, if leadership is committed to those outcomes.  Over the coming weeks and months, we will identify and discuss topics that demonstrate how working together, technology can be used to make people, communities, and businesses stronger.  We hope to enlighten, provoke a little, and provide an opportunity for discourse.

We look forward to engaging with you further.

Wishing you all a restful Labor Day holiday!

Jason and Mike

What you should know when searching for DE&I Tracking and Labor Compliance Software.

Power Construction’s implementation of SkillSmart’s InSight technology on more than two dozen projects has allowed them to track workforce and business data and provides a clear view of how and where Power is able to make the biggest impact in the community.

Power Construction, a Chicago-based general contractor, began using SkillSmart InSight in 2019.

“We loved how SkillSmart works. Their team is flexible and open to new ideas, much more than any other company we had talked to,” said Sean Glowacz, Diversity & Inclusion Manager for Power Construction explained. “They wanted to work with the Power team to make a tool that was useful for more than an individual project. Their goal was to implement it across the entire organization.”

Site tour at the Terminal 5 Expansion and Renovation at O’Hare Airport. Hosted by Power Construction for Revolution Workshop students in Chicago, IL. Power offers site-tours through their partnerships with pre-apprentice organizations. These programs are focused on preparing local, minority, and female candidates for careers in construction trades. Photo Credit: Power Construction

InSight is deployed on more than two dozen Power projects, ranging in size from $2 million to $500 million. The technology allows Power to manage project reporting in a centralized portal, with the ability to:

• Track all contract awards made on Power projects – including sub-tier awards made by prime contractors – and track payments to those contractors
• Track contract awards and payments made to certified contractors (the system can track any certification of interest to our clients)
• Track workforce hours performed on Power projects, including associated demographic and geographic details
• Generate reports summarizing contract and workforce achievements for individual projects and across all active jobs
• Track Power’s community outreach efforts

Power Construction hosts Chicago Women in Trades students at their Shops at Big Deahl project site. This retail and residential development is located in the Goose Island neighborhood in Chicago, IL. Photo Credit: Power Construction

Using InSight, Power can view data in real-time on a day-to-day basis to learn more about workforce on specific project sites. Examples of data collected include subcontractor and vendor location, demographics, and financial resources.

One unexpected observation that InSight has provided Power is the ability to identify sub-tier subcontractors that they had not previously been aware of. With this knowledge, Power has invited some to participate in their subcontractor onboarding program, giving subcontractors the potential opportunity to bid Power as a prime contractor.

Unlike traditional tracking strategies utilizing payroll data and spreadsheets, InSight produces dynamic reporting metrics that inform Power of successes, shortcomings, and most importantly, where they make the biggest economic impact. SkillSmart was also able to integrate with two of Power’s software providers—CMiC and Ceridian—to assist in accurate data transfer without needing to reenter data.

Data generated by InSight provides Power additional valuable information regarding building subcontractor project teams for upcoming projects.

“When subcontractors make a commitment, Power can see there are actions behind it that are quantifiable,” Glowacz said. “Our team knows the kind of contracts they’ve let, the specifics of those contracts and the workforce being brought to the table.” Often, the most powerful partnerships occur between a subcontractor that is not minority certified but brings sub-tier participation with a diversified workforce to the project, giving Power more confidence that the subcontractor understands the purpose behind the DEI efforts.

Evanston Rebuilding Warehouse students joined Power Construction for a site tour of District 1860. Photo Credit: Power Construction

Power Construction plans to implement InSight on more projects throughout 2022, as well as utilize another SkillSmart technology, Seeker, to amplify the hiring efforts of their subcontractor partners.

To learn more about SkillSmart’s InSight technology for the construction industry, please visit: https://www.skillsmart.us/insight-demo/.

What firms and general contractor’s should know before purchasing certified payroll reporting software for your business.

SkillSmart was selected by the new design-build consortium for Maryland’s Purple Line project. This project will require thousands of workers across 100+ subcontractors and their tiers. As part of the project, all companies must comply and demonstrate compliance with the established wage rates for each trade and County. The Purple Line will use SkillSmart’s InSight technology to engage all of the subcontractors and their tiered subs, tracking all required reporting data and enabling real-time reporting.

SkillSmart was enlisted at the start of the Purple Line project in 2019, so the project team could take advantage of the software’s powerful features. These features, outlined below, are the same elements that will be used to track the construction data for this project.

Submit and track monthly payroll. Contractors and tiered subcontractors use SkillSmart InSight to enter and gather the data they need to ensure project requirements are met.

• Enter weekly payroll hours
• Track monthly man hours
• Track workplace incidents
• Upload signed payroll forms and daily reports
• Track employees (including demographics, nationally targeted worker status, and social/economic disadvantaged status)
• Generate monthly utilization and EEO reports

Centralized reporting. The team will be able to have this data at their fingertips in one, simplified dashboard.

• Manage subcontractor accounts and permissions
• Call up submitted payroll forms
• Generate and track monthly utilization and EEO reports
• Streamline compliance reporting

This 16-mile, $9.3B, light rail project is estimated to be completed in 2026. To read more about the Purple Line project, click here: https://www.purplelinemd.com/about-the-project/overview

Our team took the opportunity to highlight nearly all of the areas that the construction industry either should be focused on or are already getting a head-start on elevating these areas within their organizations and how SkillSmart’s technology platform, InSight, can help your firm with all of it.

Correctly Submitted WH 347’s – What Data is Needed?

And Here’s How SkillSmart Can Help Your Firm Collect It.

Incorrectly reporting certified payroll leads to serious consequences from the IRS. But many companies completing a WH347 form are misidentifying staff without even knowing it.

Because of confusion identifying W2 employees versus 1099 independent contractors, some companies are mistakenly submitting incorrect information – opening them up to fees and other serious consequences – often because the data with their organization’s system is not being collected or organized correctly.

W2 Employee vs 1099 Contractor

Let’s look at the difference between a W2 employee and a 1099 contractor, as classified by the Internal Revenue Service (IRS).

Most employees in the U.S. work for a single company full or part-time and are what is known as a W2 worker or contracted employee. They get the security of consistent employment (even if it is temporary) and access to the equipment and training necessary to perform the job, but the company gets to dictate almost all the remaining terms of the arrangement, including when, where, and how the work is accomplished. As a result, these employees are given a W2 tax form at the end of each year. The employer has to pay employer taxes and withholds the employee taxes and remits to the government on behalf of the worker. Employees also get certain protections that we’ll discuss in the next section.

If you’ve ever wondered what a 1099 position means, it’s simply the classification of a worker as an independent contractor instead of an employee. An independent contractor operates as an unincorporated, individually owned business, and in many ways, these workers can be viewed as the opposite of a W2 employee. They are responsible for paying their own taxes, both at filing time and quarterly throughout the year, and holding a 1099 position means they aren’t entitled to receive any of the traditional benefits that accompany full-time employment, such as retirement plans and health insurance. There are many different types of independent contractors, but a few examples include independent owner/operators for trucking, drywall finishers, painters, flooring installers and many finish trades where manpower is at a premium.

The classification of workers is one that organizations are legally required to report to the IRS, but one that can trip up companies, based on the data they have gathered for the year.

Reporting Classifications on the WH347

The deductions recorded on the WH347 form include FICA, federal with-holding tax, state with-holding tax, medicare – all of which are not deductions for 1099 contractors.

The payroll form is also required to be signed on the last page stating the organization is correctly reporting their employees and hours paid for the last 12 months. On this final page is the area where organizations can provide an explanation for areas that were checked “other” or not filled in. This is where organizations often clarify that there are “1099 workers” listed on the form.

And this is where SkillSmart can help.

SkillSmart InSight is the ONLY comprehensive construction solution for labor and business compliance tracking. Manage one or many projects through a centralized, secure portal. Track your hours, payroll, contractor wages rates, construction data, MBE participation, supplier tracking and more. InSight is also the only software on the market that offers organizations the ability to track both W2 and 1099 contractor data, collectively or broken out, for name, address, hours worked, gender, and ethnicity.

What does this mean for your Workforce Inclusion Reporting?

For the administrators collecting the data, needed to submit a WH 347 so your organization can be paid, eliminating duplicate data entry and ensuring the right data is aggregated is invaluable. Utilizing InSight, organizations have one entry point for both W2 data, collected through payroll, and 1099 data, submitted by subcontractors. By having two collection areas within the system, InSight can automatically generate the WH 347 for your team, as well as the 1099 report to accompany that, in turn giving the government entities all the information they need, in a legal and precise format.

With this accurate and aggregated data, your firm can confidently sign and submit the required forms for payment without the consequence of your business being prosecuted for falsification of documents or wrongful reporting.

The data collected goes beyond the benefits of the correct submission of WH347 forms. InSight provides organizations the ability to create custom reports for review, analysis, and QA/QC for your team. Our team works hand in hand with your in-house experts to identify which reports will be helpful and when. For some, monthly or quarterly reports on hours worked and project status, for others, weekly reporting on payroll to proactively identify non-compliance on wage rates.

SkillSmart can help you achieve all of this.

For more information on SkillSmart or to set up a demo with our team, click here.

The $1.2T infrastructure bill marks one of the most significant investments in the country’s infrastructure since Congress responded to the Great Recession.

The bill, signed into law on Monday, November 15, will send billions of dollars to states and local jurisdictions, over the next five years. More than $110 billion will be directed to replace and repair roads, bridges, and highways, and $66 billion to boost rail, making it the most substantial such investment in the country’s passenger and commercial network since the creation of Amtrak. In addition, lawmakers provided $55 billion to improve the nation’s water supply and replace lead pipes, $60 billion to modernize the power grid and expand broadband and other public works projects.

This means the biggest impacts of this bill will be felt by those in the construction industry and the communities where the resources will be spent.  Some reports are estimating that this could create 1 million jobs over the course of five years.

Clearly, this is an incredible opportunity for those contractors who typically bid on projects with public-funding, and given the scale, this represents a new market for those firms who haven’t.  So, what does that mean for the industry’s that will be charged with putting this money to work?

Here’s What We Know

The ability to demonstrate the economic impact of this funding and the specific individual projects is going to be paramount for both the funders and the contractors.  There is a continuation of the existing disadvantaged business enterprise (DBE) program to address race and gender discrimination in surface transportation related business.  Funded projects must have at least  10 percent of the work provided to small business concerns owned and controlled by socially and economically disadvantaged individuals.  Additionally, there are requirements to ensure prompt payments to DBE contractors.  Finally, projects receiving any funds must ensure they are paying prevailing wages to those workers on the project.

To ensure that the funds are both building the infrastructure, as well as having the desired economic impact across the country, it will be important for projects to capture information about business participation, labor demographics, and prevailing wages in order to demonstrate these positive benefits.

Three Things to Consider (and how SkillSmart can Help)

You can’t manage what you can’t measure. The key to ensuring full access to the benefits of this bill is data tracking and reporting. This shouldn’t sound new, as it is a refrain that projects owners, both public and private, have been saying for some time, but the demands of the Infrastructure Bill are absolutely amplifying the importance of data collection, monitoring, and reporting to ensure equitable and inclusive projects.

This is an opportunity that shouldn’t be missed. Here are three things to consider before this funding starts flowing into your project pursuit pipeline:

1. The requirements outlined in the law can be straightforward and inexpensive to track so don’t let it keep your company from bidding on this new work.
2. It’s a simple and straightforward process to track, manage and report on the key elements contained within the law and meet any reporting requirements that may arise.
3. The ability to proactively demonstrate the economic benefits of a project can provide you a competitive advantage when bidding on new work.

SkillSmart will be digging into this bill over the next few months, providing a deeper dive into:

• Specific construction sectors where funding is being allocated.
• Where our team is currently supporting contractors and owners on projects like the ones anticipated within the infrastructure bill.
• How technology will play a key role in executing these projects into the future.

If you are interested in discussing any of the information above or how SkillSmart can support your team with tracking, managing, and reporting your project data, please contact Joshua Lowery (jlowery@skillsmart.us).