Construction Employment Law: What Contractors and Workers Must Know in 2025

The construction industry remains one of the most regulated sectors in North America. As projects grow more complex and the workforce becomes increasingly diversified, both contractors and workers must stay informed about evolving employment laws that govern hiring, workplace safety, wages, and dispute resolution.

In 2025, legislative updates in the United States, alongside regulatory changes in Ontario, Canada, are shaping how construction firms operate — from jobsite compliance to employee rights and subcontractor arrangements. This guide breaks down the essentials every contractor and worker should understand this year.

---

A Guest Post from Our American Contributor.

---

Jump to HTW Law Infographic

Articles You Might Be Interested In:

• A Comprehensive Analysis of the Return to Work Process within Ontario’s WSIB System

• Ultimate Guide for Ontario WSIB Workers' Compensation Claim Denials and WSIAT Appeals

• WSIB, STD, LTD, and Disability Discrimination Claims for Crush Injuries

• Understanding EI Employment Insurance - How It Works and the Eligibility

• Are you A Contractor or An Employee

Why Construction Employment Law Matters in 2025

Construction work involves high-risk environments, layered subcontracting chains, and fluctuating project timelines. These dynamics create unique legal obligations regarding:

• Worker classification (employee vs. independent contractor)

• Wage and overtime requirements

• Safety standards and training

• Hiring and termination procedures

• Union rules and collective bargaining

• Subcontractor liability

• Compliance with local and provincial/state employment laws

Failing to meet these obligations can lead to lawsuits, project delays, labor department investigations, and severe penalties.

1. Construction Employment Law in the United States

A. Worker Classification Rules Tighten

In the U.S., the Department of Labor (DOL) continues to enforce strict rules to prevent misclassification — especially in construction where independent contractors are common. Key 2025 considerations:

• Workers directing their own schedule, tools, or business risk being reclassified as employees.

• General contractors may be held jointly liable for wage violations committed by subcontractors.

• Misclassification penalties can include back wages, benefits, and damages.

  
  

B. Wage & Hour Requirements

Most construction workers in the U.S. are protected under the Fair Labor Standards Act (FLSA), which enforces:

• Minimum wage compliance

• Overtime pay (1.5x hourly wage for 40+ hours/week)

• Mandatory timekeeping

Prevailing wage laws — like the Davis-Bacon Act — require contractors on federal projects to pay workers at rates comparable to local standards. In 2025, enforcement is becoming more rigorous, especially for infrastructure-focused projects.

C. Occupational Safety and Health Administration (OSHA) Safety Regulations

Construction remains one of the most hazardous industries. Updated OSHA rules emphasize:

• Stricter fall protection standards

• Mandatory training documentation

• Required reporting of severe injuries

• Enhanced worker safety rights

General contractors are increasingly held responsible for safety violations across the entire site — even those caused by subcontractors.

D. Immigration Compliance

With labor shortages continuing, construction companies rely heavily on immigrant labor. In 2025:

• The government is increasing I-9 audits for construction firms.

• Penalties for hiring unauthorized workers have increased.

• Contractors must verify employment eligibility across all subcontractor tiers.

  
  

E. NYC-Specific Construction Compliance (With Requested Anchor)

New York City enforces one of the strictest construction regulatory landscapes in the country. Contractors working in nyc renovation projects must navigate enhanced local labor laws including training requirements under Local Law 196, stricter license renewals, and jobsite safety audits.

2. Ontario Construction Employment Law: What’s New in 2025

Ontario’s construction industry is governed by both the Employment Standards Act (ESA) and the Occupational Health and Safety Act (OHSA), with additional coverage under the Construction Act, WSIB, and various union frameworks.

Here’s what contractors and workers in Ontario must know in 2025:

A. Employment Standards Act (ESA) Changes Impacting Construction

1. Hours of Work & Overtime

Ontario’s ESA mandates:

• Maximum 48 hours per week (unless employees sign an agreement + government approval)

• Daily rest periods (11 consecutive hours)

• Overtime pay at 1.5x after 44 hours per week

As of 2025, enforcement of overtime agreements has tightened — documentation is essential.

2. Public Holiday Pay Rules

Public holiday calculations have been clarified for workers whose schedules vary by season — common in construction projects. Contractors must accurately calculate "regular wages" to avoid ESA violations.

3. Temporary Help Agencies (THA) in Construction

New licensing requirements for THAs and recruiters prevent exploitation in construction labor hiring.Contractors using unlicensed THAs may face:

• Fines

• Back-payment responsibilities

• Disqualification from public contracts

Learn More: Non-Compete Agreement No Longer Legal Under Bill 27: Working for Workers Act, 2021

B. Occupational Health and Safety Act (OHSA) Updates

Ontario’s OHSA requires employers to take every reasonable precaution to protect workers. In 2025, key updates include:

1. Enhanced Training Requirements

Workers must complete:

• Working at Heights (WAH) training

• Workplace Hazardous Materials Information System (WHMIS)

• Trade-specific safety programs

Renewal periods are increasingly monitored — expired certifications can halt a project.

2. Constructor vs. Employer Responsibilities

Ontario distinguishes between:

• Constructor (typically the general contractor)

• Employer (companies employing workers or subcontractors)

Constructors must coordinate overall jobsite safety, while employers must protect their own workers .Failure in either role can lead to criminal liability under the Criminal Code (Bill C-45).

Learn More: Are you A Contractor or An Employee

3. Workplace Violence & Harassment Policies

Ontario requires written policies, training, and reporting procedures — including for off-site or temporary construction environments.

Learn More: Preventing workplace violence and workplace harassment

C. WSIB Rules for Construction in 2025

The Workplace Safety and Insurance Board (WSIB) enforces mandatory coverage for most construction workers and contractors.

Updates include:

• More digital audits

• Stricter subcontractor clearance certificate checks

• Penalties for operating without valid coverage

Prime contractors face liability for unpaid premiums by subcontractors.

In 2025, key WSIB and safety rules for the construction industry in Ontario include a new mandatory Automated External Defibrillator (AED) requirement on large job sites, a related WSIB reimbursement program for AED purchases, and updated premium rates and maximum insurable earnings.

Learn More: Ontario Protecting Workers on Construction Sites - News Release (May 2025), A Comprehensive Analysis of the Return to Work Process within Ontario’s WSIB System

D. Construction Act: Payment & Holdback Rules

Ontario’s Construction Act mandates:

• Prompt Payment timelines (28 days after receiving a proper invoice)

• Mandatory holdbacks (10% for lien protection)

• Adjudication for resolving disputes quickly

In 2025, digital adjudication platforms speed up rulings, reducing project delays.

3. Key Differences Between U.S. and Ontario Construction Employment Law

Topic	United States	Ontario, Canada
Worker Classification	DOL tests + state rules	ESA definitions + WSIB coverage
Overtime	After 40 hrs/week	After 44 hrs/week
Safety Regulations	OSHA	OHSA (stricter constructor/employer split)
Immigration Compliance	Heavy I-9 focus	Permits + federal immigration rules; no I-9
Union Framework	State-by-state	Strong union presence; bargaining centralized
Wage Rates	FLSA + prevailing wage laws	ESA + sector-specific collective agreements

4. Practical Tips for Contractors in 2025

• Use written contracts with ALL subcontractors.

• Maintain updated safety certifications for every worker on site.

• Confirm WSIB clearance (Ontario) or workers’ comp (U.S.) before work starts.

• Track hours digitally to prevent disputes.

• Keep employment and classification documents ready for audits.

• Train supervisors on harassment, discrimination, and workplace conduct laws.

  
  

5. What Workers Should Know in 2025

• You have the right to safe working conditions.

• You must be paid correctly for overtime and public holidays.

• Misclassification affects your benefits, pay, and safety rights.

• You can refuse unsafe work (both U.S. & Ontario).

• You can file complaints confidentially with Labor Boards.

Employment Construction Law 101 in a Nutshell

Conclusion

Whether operating in the United States or Ontario, construction employment laws in 2025 demand a higher level of compliance, transparency, and documentation than ever before. Contractors must navigate strict safety standards, worker classification rules, and wage regulations, while workers must understand their rights and responsibilities on the jobsite.

Staying informed is not only essential for legal compliance — it protects the workforce, strengthens project outcomes, and builds a more ethical and sustainable construction industry.

Relevant Blog Posts:

• Wrongful Dismissal Ultimate Guide

• Constructive Dismissal Ultimate Guide

• Severance Pay Ultimate Guide

• Workplace Harassment Ultimate Guide

• Learn More About Workplace Harassment and Discrimination

• Learn More About Employment Contracts

• Creating a Safe and Comfortable Workplace: A Legal and Practical Guide

If you’ve been a victim of workplace harassment and discrimination, don't wait or there might be serious health implications to your mental and physical health.

You may want to consult with an experienced employment law firm, such as HTW Law, to learn about your employment law rights and your legal options.

With the right legal support, employees can navigate the challenges of unfair practices and work towards a more equitable and respectful work environment. 

You don't have to fight the battle alone. Speaking with an employment lawyer who is familiar with the laws and regulations regarding workplace harassment and disability discrimination, and constructive dismissal will go a long way. If you are in doubt, it's essential that you reach out for help as soon as possible right away.

Click here to contact HTW Law - Employment Lawyer for assistance and legal consultation.

---

Author Bio:

Trudy Seeger is a seasoned freelance content writer with extensive experience in crafting insightful articles for prominent legal blogs and websites. He specializes in creating content that simplifies complex legal topics, ranging from personal injury and employment law to contract disputes and intellectual property. With a keen focus on how legal developments impact businesses and individuals, Trudy has a proven track record of delivering well-researched, engaging, and informative legal content.