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Is Your Construction Company Ready for the New Infrastructure Act?

Posted by Dawn White on Dec 20, 2021 9:36:27 AM
Dawn White
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Woman working at a shipping port | Infrastructure Act and construction companies

Biden’s new Infrastructure Investment and Jobs Act is good news for construction companies. The influx of $1.1 trillion is expected to create millions of jobs for years to come. But the new opportunities can bring new frustrations if you aren’t prepared for the HR and payroll impacts that are coming your way.

What’s in the Infrastructure Investment and Jobs Act?

Basically, the Infrastructure Act provides about $1.1 trillion in federal funding to physical infrastructure projects across the country. It will include everything from roads and bridges to high-speed internet, power, water, and sewer systems.

Here’s a breakdown of the spending:

  • $110 billion will go into roads, bridges, and other major projects
  • $66 billion goes to freight and passenger rail
  • $39 billion for public transit systems
  • $65 billion will go toward expanding broadband
  • $55 billion goes into improving water systems and replacing lead pipes

Funding will go out over a five-year period, but don’t expect most projects to start for many months, or longer.

There’s also a second bill, nicknamed the Human Infrastructure Bill, which will invest in social services to people. That bill hasn’t been voted on yet, and none of the money in the Infrastructure Investment and Jobs Act will go towards the Human Infrastructure Bill. Their funds are completely separate.

Related reading: New Federal Construction Projects Could Mean New Payroll Complexities

HR Needs to Lead the Discussion

Your construction company has all kinds of great opportunities now that the Infrastructure Bill has passed. Along with new job opportunities, you’ll have new payroll and Human Resources issues to be aware of. Don’t wait to address those, just as you wouldn’t wait to make a plan to take advantage of new opportunities.

Your HR leader will need to be tightly aligned with management’s goals. Get invited to the table from the start, because any new business pursuits will have significant HR ripple effects throughout your company.

You’ll need to think about recruiting and talent, new unions and new union regulations, governmental policies and government reporting requirements — to name just a few areas. Human Resources will be the hub of all that information, and it’ll be on HR’s shoulders to ensure your leaders are prepared for all of the impacts and implications.

Don’t wait for upper management to come to you for answers — they may never know they need your expertise. Instead, take a leadership role in your company by approaching your executives first.

Use Technology to Scale Your Business

The right technology can help you prepare for the complexities your company will face as you take on more government contracts. As more demands are placed on payroll and HR, you’ll need to have tools in place that can automate complicated calculations, integrate business rules and union regulations, and generate government reports in seconds.

The right technology allows you to scale your business without pulling you away from your more valuable contributions to the company.

Pro-Cut had a small number of government projects that meant adhering to prevailing wage laws and providing Certified Payroll Reports. For a while, they were able to manage their few projects in a set of spreadsheets and a three-ring binder.

But Pro-Cut took on more government projects, and soon it had a major impact on their business. They could no longer keep up with their manual processes.

IDI’s Contractor Central took on the workload so Pro-Cut could continue growing and payroll could spend time on more important tasks. Contractor Central sits between time and payroll with logic to determine the appropriate prevailing wage and corresponding fringe rate based on requirements of each government project.

Contractor Central ensures:

  • Employees are getting the correct rates of pay for government and nongovernment projects
  • Overtime rates are compliant with FLSA rules
  • The daily detail needed to be in compliance with their contracts

When Pro-Cut won a new government project, they entered the terms of the contract into Contractor Central once — and then left it for the duration of the project as Contractor Central managed future rate changes.

“We LOVE Contractor Central because we don’t have to do anything. It's simple and all under one ‘roof,’ said Pro-Cut Executive Secretary Kim McLain. “With all the rules and everything, it was perfect timing that we got in with IDI when we did!”

Related reading: Keys to Avoiding a Painful HCM Integration in Your Construction Company

Act Now

The Infrastructure Act’s funds won’t be disbursed for months, but now is the time to start taking action. Don’t wait to get started on your preparations — have your alignment conversations now. Will you go after those jobs? If so, HR and payroll will need to be ready to advocate for yourselves, because upper management may not realize the load that additional projects will place on your shoulders.

Be prepared to discuss issues that may not be obvious to your executives:

  • How will you fill the talent gap when you’re taking on more projects than ever?
  • How will new projects impact payroll and union calculations?
  • What new legal issues will you need to deal with?
  • What kinds of labor negotiations and union requirements will you encounter?
  • How will new government projects affect employees, culture, and safety?
  • Do new benefits need to be introduced?

Very quickly after those project decisions have been made, bring in your trusted HCM partner and IDI. Implementations can take weeks or even months, so you’ll want to make sure you’re set up in advance and have a working product in plenty of time to take on those new government jobs. Being able to show you are ready to scale by having the right technology in place can also help you win bids.

Construction is a complex industry, and not every payroll company understands a contractor's needs. IDI has been deep in the industry for over three decades, and we can anticipate potential problems before they occur. We’ve been there and we've earned a reputation among contractors as a trusted guide.

Count on us to help you prepare for your Infrastructure Act projects in 2022.

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Topics: Construction Industry Solutions