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Construction team manager explaining ethics in construction management regarding COVID-19

Ethics For Constructors: COVID-19 and Ethics in Construction Management

COVID-19 remains a very real issue two years after the pandemic interrupted our everyday lives and disrupted the construction industry. There is no doubt that the pandemic has had a tremendous negative effect on the industry.

Companies throughout the industry have responded in different ways, such as furloughing employees, offering extended vacations to workers, and taking other personnel-related actions to reduce costs in an attempt to remain operational.

In fact, a study by the Associated General Contractors of America (AGC) discovered the following impact of COVID on the construction industry:

  • 40% of construction firms had to lay off staff due to “project cancellations and shortages of equipment or materials.”
  • 36% had to furlough or terminate job site workers.
  • 18% had to lay off office workers/other support personnel.

Over the past two years, companies have handled changes to construction labor differently. Unfortunately, this has introduced potential ethical issues in regards to how project hours are billed, especially when companies attempt to bill for hours worked when their workers are not actually present at the job site.

We recognize that this is a challenging time for everyone trying to support their people and keep top workers on payroll. However, there are universal truths about ethics in construction management that should dictate how companies handle personnel-related billing issues during the pandemic.

In the latest edition of our Ethics for Constructors series, we will examine this ethical issue in greater detail.

An Example of People Ethics in Construction Management

Ethics in Construction Situation: The company I work for has not avoided being affected by COVID. State work restrictions have resulted in several of my colleagues being furloughed. The company is doing many things to keep money flowing to these people, including billing for them on projects even when they are not present at the job site.

The company is calling it extended vacation or telecommuting. I have been asked to add a couple of these people to a project invoice I am preparing to submit. It does not feel right to me.

Ethics in Construction Answer: The described practice is known as payroll padding. If the costs associated with furloughed colleagues is solely paid by your company, then it is a passable practice.

However, once the project owner pays for those costs, it becomes unethical. In most U.S. states, it becomes a criminal act known as fraud. Do not engage in this practice and let your supervisor know that you are concerned that this action may constitute fraud. 

Find Support for Ethics in Construction Management

If you are responsible for the management of construction projects, then it is critical to continue acting in an ethical manner no matter the circumstances.

A construction manager should have full regard for how to fulfill his or her responsibilities to protect the integrity of the company and support the client through fair treatment. A constructor should also avoid engaging in any deceptive practice that could create legal entanglements.

The ethical issue we have highlighted captures the importance of speaking up when facing an ethical dilemma and maintaining a strict commitment to the construction Code of Ethics expected for construction managers. It can be challenging, especially in this era of disruption, but it should remain the top priority for constructors.

– To learn more about how to support ethics in construction management, we encourage you to become an AIC member. We offer many resources about common ethical issues to support you, your company, and your clients.

– We also encourage you to subscribe to the AIC email newsletter. You’ll start to receive valuable information about construction ethics directly to your inbox. Scroll down to the email sign-up box at the bottom of this page and enter your email address to start receiving helpful information.

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