PA Mechanics' Lien Law Changes Now In Effect

Construction Law Client Alert

Joshua R. Lorenz
jrl@muslaw.com
412.456.2836

Amendments to Pennsylvania's Mechanics' Lien Law that took effect on Dec. 31, 2016 have new implications for owners, contractors and subcontractors. The requirements are a result of Act 142, which was passed in 2014 to establish a procedure for construction personnel to follow and a statewide web database (the Pennsylvania State Construction Notices Directory) where notices under the Mechanics' Lien Law can be filed.

No owner is obligated to register a project on the Directory. Only certain owners have the right to use it, because these amendments apply only to residential and commercial construction, repair or improvement projects totaling $1.5 million or more.

Owners of an eligible property do have an incentive to register projects. Contractors on registered projects now have additional duties, and subcontractors must take certain actions beyond what they currently do to preserve their lien rights or they forfeit their right to file liens for the services or materials they provide.

REQUIRED NOTICES

• Notice of Commencement: Required to be filed and posted by the project owner or its agent prior to the beginning of work or the furnishing of materials for the project. The owner and contractor must make "reasonable efforts" to ensure a copy of the Notice of Commencement is included in contract documents provided to subcontractors awarded work on the project. 
• Notice of Furnishing: Required to be filed by subcontractors to preserve their lien rights. A Notice of Furnishing must be filed with the Directory within 45 days after first working at or providing materials to the job site. A subcontractor failing to timely file a Notice of Furnishing waives its right to file a lien claim except in the event the subcontractor can prove its failure to file resulted from the owner or general contractor pressuring the subcontractor NOT to file, which can lead to civil or criminal action against the owner or general contractor.

The legislation includes two other types of notices (Notice of NonPayment and Notice of Completion) that can be registered in the Directory, but neither is required, nor has any substantial legal effect.

All affected parties should have their contract documents reviewed to ensure they are in compliance with the new amendments. Notably, the new amendments require specific notice language to be included in all contracts used on projects registered with the Directory. As outlined above, failure to comply could have significant consequences and create exposure to unanticipated liabilities.

For more information about the new Pennsylvania Mechanics' Lien Law changes for 2017, or any other Construction Law matter, please contact Joshua Lorenz.

This material is for informational purposes only.  It is not and should not be solely relied on as legal advice in dealing with any specific situation.

Yearly Employment Law Check-Up

Elaina Smiley
412.456.2821
es@muslaw.com

Top Four Items to Review Now

The New Year is a good time for employers to review and update their employment practices. Proper policies and practices will reduce the risks of costly employment claims. Here are some items to review:

1. Review Job Duties for Salaried-Exempt Employees.

Although implementation of the revised Fair Labor Standards Act ("FLSA") regulations increasing the salary levels for exempt employees has been halted (for now), it is still a good idea to review the actual job duties performed by those classified as exempt from the payment of overtime. The FLSA contains a two-part test for an employee to be considered exempt, and employees must meet both tests: 1) payment of a fixed salary and 2) meeting the duties of one of the Department of Labor exemption categories. Misclassifying an employee as exempt when the employee should be paid overtime can be very costly. In cases involving FLSA violations, employees can get up to 3 years of back wages (overtime that was not paid) plus double damages and attorneys' fees.

2. Review Pay Practices for Hourly Employees.

Employers need to ensure that hourly employees are paid for all work time, which can include travel time, training, and short breaks. Furthermore, employers should be cautious when paying hourly employees bonuses. Certain bonus payments that are classified as non-discretionary must be considered in calculating an employee's overtime rate, and additional overtime payments need to be made for the period for which the bonus was applicable. "Comp time" is not permitted in lieu of paying hourly employees overtime for hours worked in excess of 40 per work week.

3. Review Policies and Procedures on Discrimination, Harassment, and Retaliation.

Every employer should publish and distribute policies forbidding all forms of harassment, discrimination, and retaliation against employees who report these issues. Harassment and discrimination should be barred not only based on sex, but other protected characteristics such as race, religion, age (40 and older), disability, sexual orientation, pregnancy, and national origin. The EEOC recently issued enforcement guidance that expands protection for employees against retaliation; therefore, policies should be reviewed for compliance.

4. Review Management Training on Handling Employee Reports and Requests.

When an employee makes a report or complaint of unlawful harassment to a manager, knowledge of the harassment is imputed to the employer even if the manager to whom the report was made fails to report it further or to take appropriate action. An employer will not be able to successfully defend harassment claims if the employer does not take prompt and effective remedial action in response to such reports. Also, managers need to properly handle employee accommodation requests under the Americans with Disabilities Act and employee leave requests under the Family and Medical Leave Act.

Should you need assistance conducting an audit of your human resources policies, please contact Elaina Smiley at 412.456.2821 or es@muslaw.com.

This material is for informational purposes only.  It is not and should not be solely relied on as legal advice in dealing with any specific situation.

New I-9 Forms Must Be Used Starting 1/22/2017

IMMIGRATION LAW REMINDER

On August 25, 2016 the Office of Management and Budget approved a revised Form I-9, Employment Eligibility Verification. It is expected that the United States Citizenship and Immigration Services (USCIS) will publish a revised form by November 22, 2016.  Many of the proposed changes to Form I-9 were designed to reduce technical errors and help employers electronically complete the form after they have downloaded it from uscis.gov. Employers may continue using the current version of Form I-9 with a revision date of 03/08/2013 until January 21, 2017. After January 21, 2017, all previous versions of Form I-9 will be invalid.

All employers have an obligation to verify the identity and employment eligibility of all newly-hired employees through the completion of the Employment Eligibility and Verification Form I-9.  The Form I-9 contains the signature of the employer and the employee, and it records the relevant data from the documents that the employer inspected to confirm the employee’s authorization to work in the United States.  It is important that the employer clearly identify the reviewed documents and their identification numbers. It is not necessary to retain copies of these documents.  Employers are required to maintain for inspection the original Form I-9 for all current employees.  In the case of former employees, retention of Form I-9 is required for a period of at least three years from the date of hire or for one year after the employment relationship terminates, whichever is longer.

The U.S. Department of Labor and the Department of Homeland Security through its U.S. Immigration and Customs Enforcement Bureau (ICE) are the government agencies with authority to audit I-9 compliance.  ICE is committed to increased work-site enforcement, particularly in cases of low skill and high turnover industries. Employers should regularly audit their I-9 procedures, compliance, and recordkeeping, as well as establish a protocol at the “front desk” to identity persons responsible to deal with government inquiry; Employers should also be sure that all policies and protocols relating to recordkeeping and government compliance are current and understood by key employees.

For more information about the new I-9 forms, or any other Immigration Law matter, please contact Elaina Smiley, Joel Pfeffer or Gary Sanderson.