The construction industry is changing fast, thanks to advanced technologies, labor challenges, and the push for more speed and efficiency. But with these changes come new challenges, especially when it comes to doing the right thing every time.

In our modern industry, construction managers aren’t just managing budgets and timelines; they’re dealing with complex ethical dilemmas in construction that can affect worker safety, project quality, and public trust.

From artificial intelligence (AI) to safety measures to labor practices, these ethical issues are playing out right now on projects across the country. Let’s take a closer look at why managers must be aware of today’s challenges and be prepared to address them.

Also, discover how our organization, the American Institute of Constructors (AIC), can help you tackle ethical challenges throughout your construction career.

Ethical Dilemmas in Construction Facing Today’s Managers

As the industry pushes to accomplish more with less to increase profitability, managers must be prepared to assess ethical dilemmas and make informed decisions to avoid real-world consequences.

Consider three categories of issues currently shaping construction projects nationwide.

1. AI in Construction: Balancing Innovation with Accountability

Artificial intelligence is transforming construction workflows – from estimating and scheduling to safety monitoring and design automation. But with its rise comes a serious ethical challenge: how to use AI responsibly in an industry built on human expertise and physical risk. Questions about liability, bias in data, and over-reliance on automation are becoming harder to ignore.

Why It Matters Now

According to a report from the construction law firm, Smith Currie Oles LLP, AI tools introduce hidden operational and legal risks that many teams aren’t fully prepared to manage.

For example, if an AI-driven system makes a mistake in a design spec or safety forecast, who is liable – the software provider or the contractor? Additionally, as firms adopt AI to reduce labor costs, there’s a growing concern that essential field experience and skilled roles are being devalued or displaced.

How Construction Managers Should Respond

Managers must approach AI adoption with both strategic intent and ethical oversight. This effort should include taking these proactive steps:

• Audit AI tools for bias and accuracy.
• Define clear accountability in contracts and workflows.
• Ensure AI supports – not replaces – sound human judgment.
• Provide upskilling opportunities so your crew can grow alongside technology.

AI can be a powerful ally as an advanced technological tool in construction, but it shouldn’t be used to make decisions in a vacuum. Construction leaders need to establish guardrails for how AI is used and remain accountable for the outcomes.

2. Safety Issues: The Risk of Cutting Corners

With shrinking margins and tighter deadlines, it’s tempting to overlook safety steps, fast-track inspections, or accept lower-grade materials to keep a project moving. But these shortcuts go beyond compromising quality, as unethical decisions can put lives at risk.

Why It Matters Now

A recent Safety Inc. report highlights a disturbing trend: the normalization of unsafe practices in environments where pressure to perform overrides adherence to protocol.

Inadequate training, inconsistent PPE usage, and missed inspections are no longer isolated issues. They’re becoming systemic within the industry. The result is OSHA continues to focus on the high rate of injuries and fatalities in our industry, underscoring the real consequences of ethical lapses.

How Construction Managers Should Respond

Construction managers play a central role in strengthening a safety-first culture. Managers can promote safety ethics in the following ways:

• Refuse to trade safety for speed – even under deadline pressure.
• Empower crews to speak up about hazards without fear of retaliation.
• Ensure all subcontractors and temp workers receive proper training.
• Document and enforce inspection procedures rigorously.

Ethical leadership starts on the job site. Managers must lead by example, maintain compliance, and make it clear that safety isn’t negotiable when it comes to protecting the well-being of constructors responsible for challenging work in difficult environments.

3. Worker Classification: Navigating 1099 vs. W-2

Construction relies heavily on independent contractors, but misclassifying workers as 1099s when they function as employees is both illegal and unethical. It shifts risk onto the worker, strips away benefits, and creates an uneven playing field in the industry.

Why It Matters Now

A Century Foundation report estimates that up to 2.1 million construction workers in the U.S. are misclassified or paid off the books. This tactic is tempting because it can reduce labor costs by up to 30%. However, this approach often violates labor laws and leads to wage theft, lack of insurance coverage, and increased worker vulnerability.

Companies that engage in misclassification may face lawsuits, penalties, and damage to their brand image. In the long run, companies that take the appropriate steps to classify their workers properly and provide fair compensation will have a more sustainable and responsible business model.

How Construction Managers Should Respond

Managers must ensure that labor classifications are regularly reviewed and based on actual working relationships, not convenient arrangements. Some key steps to avoid unethical or illegal activity include the following:

• Consult HR and legal advisors to stay aligned with labor laws
• Audit subcontractor agreements for compliance
• Prioritize fair treatment over short-term savings
• Build long-term loyalty by offering secure, legally compliant work arrangements

Construction leaders who take the high road on classification will avoid penalties, earn trust, reduce turnover, and build more stable project teams.

How AIC Supports Construction Ethics at the Ground Level

Today, we highlighted three ethical challenges in construction, but there are countless more that you may face in your role. In fact, each year, our organization hosts a collegiate ethics competition that focuses on a real-world ethical situation.

We invite colleges and universities from across the country to participate in the AIC Collegiate Ethics Competition. Each school assembles a team of construction management students who are given a prompt based on an ethical dilemma. The students present oral and written arguments addressing the prompt and are evaluated based on the quality of their responses.

The competition is judged by construction professionals and AIC Board members who provide feedback on the responses. We then determine which schools offered the best responses and select individual winners.

The competition helps participating schools stand out from their peers and provides students with an exceptional experience at the outset of their careers. We encourage your school or university to get involved in the next competition!

Reminder: Construction Ethics Starts with Leadership

Ethical dilemmas in construction are everywhere. They’re showing up in technology adoption, safety issues, and daily job site operations. As a construction manager, your decisions set the tone. Whether it’s how you implement new technology, enforce safety standards, or pay workers, the choices you make directly affect your team, your clients, and your reputation.

The best way to navigate these challenges is to be informed, intentional, and values-driven. A good starting point is reviewing and adopting the AIC Code of Ethics, which outlines clear standards for integrity, accountability, and professionalism in construction management.

We recommend using our Code as your foundation for decision-making. Let this be a reminder that doing the right thing is always the right move, even when it’s not the easiest.

– To learn more about the latest ethical challenges and other important topics facing managers, follow AIC on LinkedIn. We regularly share articles on timely and relevant topics to help constructors grow their knowledge and capabilities. Join us on LinkedIn to grow in your role.