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Builder ruled responsible for safety violations as controlling employer

A construction company was a controlling employer of a construction worksite found to have safety violations, an administrative law judge held in a final decision of the Occupational Safety and Health Review Commission decision released Thursday.

In Secretary of Labor v. Fama Construction LLC, the judge held that Fama is an employer and required to pay nearly $200,000 in penalties for U.S. Occupational Safety and Health Administration violations.

Norcross, Georgia-based Fama Construction received several citations after a Dec. 9, 2016, OSHA inspection of two of the company’s residential construction sites in Lawrenceville, Georgia. OSHA had conducted at least four inspections prior that resulted in citations for safety violations, including a settlement in June of 2016, when the company agreed to settle an OSHA citation by hiring a third-party safety contractor to conduct monthly safety audits, according to court documents. Fama was cited for violating the same three construction standards — violation of eye and face protection, duty to have fall protection and ladder issues — in each of two houses under construction but with different penalties and characterizations. The inspector claimed that he observed workers on the roof who were not tethered to fall protection, workers using nail guns with sunglasses on rather than safety eyewear, and ladders pitched against the sides of the houses without properly extended siderails.

Fama contested the citations and proposed penalties, arguing that it could not be held responsible for the conditions at the worksite under the multiemployer doctrine, contending that it only secures roofing contracts and that the workers were employed by subcontractors who directed the work and had the responsibility for complying with OSHA standards.

The judge, however, concluded that Fama was the employer of the work crews, or “in the alternative … a controlling employer of the work crews.”

Fama works primarily with four building companies and provides those companies with a total price for house, paying work crews a set amount based on the price Fama charges for a particular house, and typically uses the same work crews, according to court documents. The company does not pay for workers’ health insurance, offer vacation days or contribute to retirement accounts, but at least one employee testified that on out-of-state jobs, the company paid for gasoline, hotel accommodations and paid half of workers’ meals, and paid medical bills and additional compensation for a crew member’s work-related injury, the court documents stated.

The company stated that it does provide mandatory safety training every four or five months for work crews, and said that when crew members are caught violating safety standards that they are required to watch a safety video. Fama also said it has a progressive disciplinary system in place whereby crew members can be fined for violating safety procedures and have a fine deducted from their paycheck, but the company said it has not actually fined anyone, according to court documents.

In its determination of whether Fama was an employer, the commission judge noted that although the crew determined when to arrive at the worksite and how long to work and treated the workers as independent contractors, Fama paid for and provided materials for the job, including a dump truck when needed, as well as safety equipment. Workers also testified they sometimes purchased equipment on Fama’s credit, which the commission said was “more indicative of an employer-employee relationship than a contractor-subcontractor relationship.”

The commission judge also found that the crew members who were cited for OSHA violations had been completing jobs for Fama in excess of 10 years, and that Fama had in the past directed a crew to stop working on one project and go to another location, which the commission said indicated Fama had the right to assign additional projects to crews.

Finally, the judge held that the method of payment — issuing paychecks for each roofing crew member at the end of each week — was indicative of an employer-employee relationship.

As a result, the commission judge held that Fama was a controlling employer with regard to the cited worksites under the multiemployer worksite doctrine. The court found that Fama was on notice to “meet the standard of reasonable care” after its inspection and agreement to hire a third-party safety consultant.

Based on the work crews’ extensive history of noncompliance with the same standards, the judge affirmed each citation, assessing $3,984 for the serious violation, $55,770 for each repeat violation and $55,700 for each willful violation.

Fama did not immediately respond to a request for comment.