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The ABC Southern California chapter hosted their 25th annual craft championships on Saturday Jan. 26, 2019. Along with the craft competition, there were over 500 visitors, 22 vendors, a nine-team chili cook-off, a high school visit with hands-on activities presented by chapter instructors and demonstrations from Job Corps and ABC Southern California.

More than two dozen craft trainees and apprentices competed in residential electrical, industrial electrical and plumbing. Andrew Cruz of Champion Electric won first place in electrical-residential, Carlos Bencomo of Champion Electric won first place in electrical-industrial and Austin Dorati of Empyrean Plumbing won first place in plumbing. They will advance to the National Craft Championships in Long Beach, California, during ABC Convention 2019.

The top three winners in each competition received:

First place: $1,200 in tools, a $750 scholarship to the OSHA Institute and a voucher for a new pair of Iron Age work boots
Second place: More than $1,000 in tools
Third place: More than $800 in tools

All prizes and competitor giveaways were donated by chapter ABC member companies.

From left to right: Andrew Cruz, Carlos Bencomo and Austin Dorati

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On Jan. 31, President Trump signed an executive order, “Strengthening Buy-American Preferences for Infrastructure Projects,” which expands the administration’s preferences for American products in federal procurements and federal financial assistance awards on critical infrastructure projects.  

The order directs the head of each executive department and agency administering a covered program to “encourage recipients of new federal financial assistance awards to use, to the greatest extent practicable, iron and aluminum, as well as steel, cement and other manufactured products produced in the United States, in every contract, subcontract, purchase order or sub award that is chargeable against such federal financial assistance award.” The agencies are required to take action within 90 days and document their efforts in a report to the president within 120 days.

The order expands upon President Trump’s April 2017 executive order, “Buy American and Hire American.” For more information on the Trump administration’s “Buy American” efforts, see the White House’s fact sheet. 

ABC is currently evaluating the executive order and its potential impact on ABC members. If you are a federal contractor and would like to offer feedback, please contact Ben Brubeck, ABC’s vice president of regulatory, labor and state affairs. 

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ABC members are encouraged to review the Occupational Safety and Health Administration’s compliance assistance products that were updated in the first quarter of Fiscal Year 2019, as well as OSHA’s winter weather safety page with information on preventing workplace injury from various weather hazards. 

The updated compliance assistance resources include:

– Frequently asked questions for the operator certification provisions of its cranes and derricks in construction standard;
– An infographic published in English and Spanish by the Center for Construction Research and Training on working safely in trenches; and 
– A hazard alert on ground disturbance in U.S. onshore upstream oil and gas construction and maintenance activities, which highlights best practices for operators, excavators and line locators.

Winter Weather Safety

OSHA has also partnered with the National Oceanic and Atmospheric Administration on a public education effort aimed at improving the way people prepare for and respond to severe weather, according to the OSHA website. The winter weather safety materials provided by OSHA include a multi-page document and pamphlet on snow removal safety and a detailed list of precautions for avoiding various winter weather-related hazards.

ABC members can visit the OSHA website for more information on the compliance assistance materials listed above and the winter weather safety materials.

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On Jan. 28, ABC submitted comments on the National Labor Relations Board’s joint employer proposal, which would establish an updated standard for determining joint-employer liability under the National Labor Relations Act. Additionally, the ABC-led Coalition for a Democratic Workplace submitted comments in support of the NLRB’s proposal.

In 2015, the NLRB uprooted more than 30 years of precedent and issued a decision in Browning-Ferris Industries that greatly expanded joint employer liability under the NLRA.  

Under the NLRB’s 2018 proposal, an employer may be found to be a joint employer only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine.

In its comments, ABC expressed support for the proposed rule and stated its disapproval for portions of a recent D.C. Circuit Court of Appeals’ opinion that partially affirm the previous BFI test under common law principles. As ABC argued in its comments, it is vital to the continued productivity of the construction industry, one of the primary engines of the nation’s economy, that the board clearly delineate and limit the types of control that will henceforth be treated as creating joint-employer status under the NLRA. 

ABC has been a vocal opponent of the expanded definition of joint employer that was created by the board’s 2015 BFI decision, and has supported legal and legislative efforts to restore the standard that was in place for more than 30 years.

ABC will continue to provide updates on the NLRB’s joint-employer standard in Newsline. 

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On Jan. 25, OSHA issued the Tracking of Workplace Injuries and Illnesses final rule, which eliminates the requirement for establishments with 250 or more employees to electronically submit information from OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and OSHA Form 301 (Injury and Illness Incident Report) to OSHA annually. According to the press release, “the final rule does not alter an employer’s duty to maintain OSHA Forms 300 and 301 on site, and OSHA will continue to obtain these forms as needed through inspections and enforcement actions.” 

Under the final rule, covered establishments are only required to electronically submit information from OSHA Form 300A (Summary of Work-Related Injuries and Illnesses) to OSHA. Information on how to electronically submit the OSHA Form 300A can be found on OSHA’s Injury Tracking Application website. 

The final rule also requires covered employers to submit their Employer Identification Number electronically along with their OSHA Form 300A submission. According to the final rule, the EIN will be required for covered establishments submitting their 300A data from 2019, but not for covered establishments submitting their 300A data from 2018, which is due by March 2, 2019. 

Although the Trump administration rulemaking did not focus on employee drug testing and incident-based incentive programs included in the Obama-era 2016 rule, the final rule did mention an Oct. 11, 2018 OSHA memo that explained its position on workplace incentive programs and post-incident drug testing. The rule states:

That memorandum—which referred to the 2016 final rule and its preamble—reiterated the rule’s limited scope and expressed how it “does not prohibit workplace safety incentive programs or post-incident drug testing.” To the extent the 2016 preamble suggested otherwise, it has been superseded. While not the focus of this particular rulemaking, that memorandum accurately reflects OSHA’s position and addresses the commenters’ concerns.

More information on the 2019 final rule is available on here. 

This article is intended for informational purposes only and does not constitute legal advice or opinion.

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ABC members overwhelming reported that government-mandated project labor agreements harm their businesses, hiring and workforce development practices and ability to complete work safely, on time and on budget, according to the results of a December 2018 membership survey published today.

Ninety-eight percent of survey respondents said they were less likely to bid on a taxpayer-funded construction contract if the bid specifications required the winning firm to sign a PLA with labor unions, and 97 percent of survey respondents said a construction contract that required a PLA would be more expensive compared to a contract procured via free and open competition.

A clear majority of the more than 500 survey respondents affirmed that government-mandated PLAs are  anti-competitive and discourage quality contractors and the 87.2 percent of U.S. construction workers who choose to not join a union from bidding and working on projects in their own communities, paid for by their own tax dollars. In fact, 97 percent of survey respondents said a PLA would result in worse local hiring outcomes for a project. In addition, almost 90 percent of respondents agreed that a PLA would decrease the hiring of women, veteran and disadvantaged business enterprises and construction workers, which have traditionally been unaffiliated with labor unions. 

Currently, 24 states have adopted legislation or executive orders to ensure fair and open competition on state and local taxpayer-funded construction projects by restricting government-mandated PLAs and PLA preferences. 

In February 2009, President Obama signed Executive Order 13502, which encourages federal agencies to mandate PLAs on large-scale federal construction projects exceeding $25 million in total value on a case-by-case basis, and permits states and localities to mandate PLAs on federally assisted projects. ABC has continually advocated to rescind the Obama-era policy and supports measures ensuring fair and open competition on federal and federally assisted construction projects that help taxpayers get the best possible product at the best possible price.  

“It would be a real win-win for taxpayers and the U.S. economy if Congress and the Trump administration would create an inclusive policy so all Americans and all qualified companies can fairly compete to rebuild America’s infrastructure,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “This common-sense reform would create a level playing field in the procurement of government construction contracts, increase competition, curb construction costs, help small businesses grow and improve America’s infrastructure.”

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Merit shop contractors are typically wary of competing for taxpayer-funded construction contracts subject to a government-mandated project labor agreement for a number of reasons, among them concerns about the viability of multiemployer pension plans as a way to help employees achieve their retirement goals—and exposing their business to potentially catastrophic MEPP liability. New information from the U.S. Department of Labor bears out those concerns. 

In 2018, 25 out of 60 MEPPs sending Critical and Declining Status Notices to plan participants were in the construction industry, according to a list posted by DOL’s Employee Benefits Security Administration. In addition, 71 out of 122 MEPPs sending Critical Status Notices and 49 out of 71 plans sending Endangered Status Notices were in the construction industry.

“The information on the DOL website demonstrates how some, but not all, construction industry MEPPs that mainly benefit union construction workers and are funded by union-signatory contractors remain in poor financial shape,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Beneficiaries should be cautious about retirement promises made by some MEPPs, and contractors may be unaware of MEPP liabilities that could cripple a business financially.”  

Under ERISA Code Section 305, Critical and Declining MEPPs are projected to be insolvent generally within the next 20 years, putting participants, including retirees, at risk of reduced benefits. In addition, MEPPs in Critical Status have a funded percentage under 65 percent, and MEPPs in Endangered Status have a funded percentage between 65 and 80 percent.

Federal law requires trustees of MEPPs determined to be in Endangered Status, Critical Status, and Critical and Declining Status, to provide notice of this status to participants, beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation and DOL no later than 120 days after the close of the plan year. Additional troubled MEPPs from plan year 2018 are expected to send notices to parties through May 2019.

In 2017, 44 out of 80 MEPPs sending Critical and Declining Status Notices, 87 out of 127 MEPPs sending Critical Status Notices and 71 out of 85 MEPPs sending Endangered Status Notices were in the construction industry, according to DOL information.

If MEPPs become insolvent, they are taken over by the Pension Benefit Guaranty Corporation—an independent agency of the federal government that monitors and privately insures pension benefits in private sector defined-benefit plans such as multiemployer pension plans—and qualified individual beneficiaries may receive up to $12,870 per year in defined benefits in certain circumstances. However, because of a number of factors, including exposure to struggling MEPPs, the PBGC is projected to become insolvent around 2025, after which it will not be able to pay guaranteed benefits for insolvent MEPPs.

According to data from the PBGC, the construction industry is a major contributor to current MEPP underfunding and future PBGC MEPP insurance program funding shortfalls:

• According to the PBGC’s 2015 Pension Insurance Data Tables, which contains the most recent PBGC data on industry MEPPs, construction industry MEPPs are responsible for about $240 billion (or 48.4 percent) of all PBGC-insured MEPP underfunding, which totals $496 billion. (See Table M-14: Funding of PBGC-Insured Plans by Industry [2014] Multiemployer Program).

• The amount of the construction industry’s MEPP underfunding continues to get worse. In comparison, similar 2009 PBGC data found the construction industry was responsible for about $87.8 billion (or 45 percent) of PBGC-insured MEPP underfunding (see Table M-14: Funding of PBGC-Insured Plans by Industry [2007] Multiemployer Program). Table M-14 of the 2010 PBGC report indicates the construction industry’s portion of all PBGC-insured MEPP underfunding grew to $167 billion (or 47 percent) in 2009.

• Seven hundred and fifty-nine (53 percent) of the 1,425 MEPPs insured by the PBGC are in the construction industry. (See Table M-8: PBGC-Insured Plans and Participants by Industry [2014] Multiemployer Program).

• The construction industry has a total of $473 billion (49.1 percent) worth of the PBGC’s total liabilities. (See Table M-14: Funding of PBGC-Insured Plans by Industry [2014] Multiemployer Program).

• The largest number of employees from any industry, almost 3.9 million (37.5 percent) of the 10 million PBGC-insured MEPP participants (workers and retirees), is from the construction industry. (See Table M-8: PBGC-Insured Plans and Participants by Industry [2014] Multiemployer Program).

MEPPs and the Construction Industry

All MEPPs are defined by the Taft-Hartley Act of 1947. Typically, construction industry contractors that have signed a collective bargaining agreement with a building trades union(s) pay into a MEPP fund that is managed jointly by trustees from the specific trade union and select representatives from employers signatory to that union. MEPPs provide defined retirement benefits to participating workers who have met vesting schedules and other requirements during their career. 

In general, unionized construction trade contractors typically use a defined benefit MEPP retirement model, while nonunion contractors typically provide defined contribution plans such as a portable 401(k) retirement plan.

“Nonunion contractors are extremely cautious about contributing to MEPPs because it can expose their business to future unknown pension liabilities, and many MEPPs are unlikely to help construction workers achieve their retirement goals,” said Brubeck. “They know the MEPP model is flawed and the risks to companies and beneficiaries are just too great to participate.”

During the recession, some contractors participating in MEPPs went out of business. Contractors failing to pay their share of liability to a MEPP creates additional liability for a MEPP’s remaining employer participants, which can cause insurmountable financial burdens on contributing employers and/or eventually force the PBGC to take over the plan and cut benefits.

In addition, lawmakers have pushed construction industry contractors and workers into MEPPs via so-called responsible contractor laws and government-mandated PLAs on taxpayer-funded construction projects that can expose contractors to MEPP liability and harm retirement prospects for its workforce. 

An October 2009 report by St. Louis University accounting professor Dr. John R. McGowan, “The Discriminatory Impact of Union Fringe Benefit Requirements on Nonunion Workers Under Government-Mandated Project Labor Agreements,” found nonunion workers’ take-home pay is reduced by at least 20 percent when their employers enter into PLA arrangements containing a MEPP requirement.

In addition, nonunion construction workers subject to a PLAs’ MEPP participation language may lose all contributions made to a MEPP during the life of a project unless they join a union, pay union dues and meet the plan’s vesting requirements.

“Lawmakers should not be forcing construction workers and businesses into a broken and flawed MEPP scheme at the urging of their political benefactors,” said Brubeck. “If lawmakers were aware of the health of troubled union-affiliated MEPPs, they might be less likely to require government-mandated PLAs and so-called responsible contracting policies on taxpayer-funded construction projects.” 

Congressional Outlook for MEPPs and the PBGC

At the end of 2018, members of a special Congressional Joint Select Committee on Solvency of Multiemployer Pension Plans failed to deliver a package of reforms to help struggling plans and shore up the PBGC and its MEPP program vulnerabilities. 

In the 116th Congress, lawmakers will again offer legislation to address the financial crisis facing some MEPPs and the PBGC.

ABC will continue to monitor all legislative proposals concerning the PBGC and MEPPs and will continue to oppose government-mandated PLAs and other laws mandating contractor and employee participation in MEPPs.

Construction industry stakeholders interested in reviewing construction industry MEPPs in critical and declining, critical and endangered status from 2008 to Jan. 22, 2018, can search this spreadsheet or visit the DOL website on MEPPs.

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ABC has added six members to the Beam Club Presidential level for recruiting between 25 and 49 new members:

• Empire State Chapter member Anthony T. Rinaldi of Anthony T. Rinaldi LLC
• Wisconsin Chapter member Stan Johnson of A.C.E. Building Service Inc.
• Pelican Chapter member Glen Redd of Triad Electric & Controls Inc. 
• Wisconsin Chapter member Dan Bertler of Supreme Structures Inc. 
• Wisconsin Chapter member Steve Klessig of Keller Inc.
• Keystone Chapter member Cliff M. Wilson of Benchmark Construction Co. Inc.

The Beam Club was established in 1966 to recognize ABC’s top membership recruiters for their commitment to growing the association. By recruiting five new members, ABC members are automatically enrolled in the Beam Club by their chapter. Members receive one point for each new member recruited. Beam Club activity is ongoing from year to year, with members’ point totals continually accruing and advancing members to the next Beam Club award level.

For more information, contact Leiloni Hayward at hayward@abc.org.

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On Jan. 23, pursuant to the Federal Civil Penalties Inflation Adjustment Act, the U.S. Department of Labor published a final rule to adjust for inflation the civil monetary penalties assessed or enforced by the Department, including the Occupational Safety and Health Administration, for 2019. This final rule is effective on Jan. 23, 2019. As provided by the Inflation Adjustment Act, the increased penalty levels apply to any penalties assessed after the effective date of this rule.

States that operate their own Occupational Safety and Health Plans are required to adopt maximum penalty levels that are at least as effective as federal OSHA’s.

Below are the maximum penalty amounts adjusted for inflation as of Jan. 23, 2019, according to OSHA’s website.

For more information, visit OSHA’s website.

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Pursuant to the Federal Civil Penalties Inflation Adjustment Act, the U.S. Department of Labor published a final rule to adjust for inflation the civil monetary penalties assessed or enforced by the Department, including the Occupational Safety and Health Administration, for 2019. This final rule is effective on Jan. 23, 2019. As provided by the Inflation Adjustment Act, the increased penalty levels apply to any penalties assessed after the effective date of this rule.

According to OSHA’s website, below are the maximum penalty amounts adjusted for inflation as of Jan. 23, 2019.

For more information, visit OSHA’s website.

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