The federal government plans to use a small army of newly trained agents to audit 6,000 companies in a nationwide crackdown on misclassification of independent contractors by employers. Construction firms could be hit hard by the enforcement actions and regulatory changes contemplated by federal and state governments desperate for funds to close budget deficits. The Obama administration has tasked the Dept. of Labor and the Internal Revenue Service with increasing enforcement this year and is calling for additional resources in the 2011 federal budget. Last year, the Dept. of Labor added 250 new investigators hired within its Wage & Hour
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.