Category: News Line

At the ABC national convention, Tim Mongeau, director of workforce development, announced the pilot of the new online Workforce Development Management System. The WDMS is a simple yet comprehensive self-assessment to evaluate an organization’s current workforce development program to identify opportunities for enhancement and validate they’re on the right track.

Submitting the results of the assessment will generate prescriptive results that will assist the organization in taking the right next steps as they grow their workforce development program. The WDMS is modeled after the STEP Safety Management System and uses a similar process for self-assessment, scoring and personalized feedback. The result is a familiar and easy-to-use online tool.

The pilot is open to all ABC member companies and, best of all, there is no fee for the use or submission of the evaluation. If your organization is interested in participating in the pilot, it is recommended that you download the WDMS application and use it as a worksheet to prepare for your final submission. To download the WDMS application or begin a new application, navigate to wdms.abc.org. For more information, please contact Timothy Mongeau at [email protected].

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In accordance with Executive Order 13999, on March 12, the U.S. Department of Labor’s OSHA issued its National Emphasis Program—Coronavirus Disease 2019, which focuses OSHA enforcement efforts on companies that put the largest number of workers at serious risk of contracting COVID-19. In addition, the program prioritizes employers that retaliate against workers for complaints about unsafe or unhealthy conditions, or for exercising other rights protected by federal law.

The DOL press release states, “NEP inspections will enhance the agency’s previous coronavirus enforcement efforts and will include some follow-up inspections of worksites inspected in 2020. The program’s focused strategy ensures abatement and includes monitoring the effectiveness of OSHA’s enforcement and guidance efforts. The program will remain in effect for up to one year from its issuance date, though OSHA has the flexibility to amend or cancel the program as the pandemic subsides.”

The release further states, “OSHA state plans have adopted varying requirements to protect employees from coronavirus and OSHA knows many of them have implemented enforcement programs similar to this NEP. While it does not require it, OSHA strongly encourages the rest to adopt this NEP. State plans must notify federal OSHA of their intention to adopt the NEP within 60 days after its issuance.”

In addition to the NEP, OSHA also updated its Interim Enforcement Response Plan for COVID-19, which provides new instructions and guidance to area offices and compliance safety and health officers for handling COVID-19-related complaints, referrals and severe illness reports.

According to the DOL release, “OSHA will only use remote-only inspections if the agency determines that on-site inspections cannot be performed safely. On March 18, 2021, OSHA will rescind the May 26, 2020, memorandum on this topic and this new guidance will go into and remain in effect until further notice.”

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From March 7-13, ABC celebrated Women in Construction Week to raise awareness of the growing role of women in the construction industry and encourage women to consider a career in construction. ABC demonstrated the success of women in the industry through social media posts, letters to the editor and op-eds published in various media outlets.

On social media, ABC National shared quotes and photos of women in the merit shop community, while chapters shared more than 75 ABC stories using the hashtag #WICWeek2021. ABC also shared stories and highlighted members on its social media platforms. The photos and quotes can be found on ABC’s Flickr page.

Highlights of the media coverage include:

ABC members were also highlighted in stories from Construction Dive and Construction Executive magazine.

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On March 12, ABC joined a coalition of construction, housing and real estate organizations in a letter to Commerce Secretary Gina Raimondo to address price increases of lumber in the United States over the past year. Due to a range of issues, including decreased production, supply chain woes, tariffs and wildfires in the United States, the construction industry has seen significant increases in lumber prices since last spring, threatening jobs and leading to higher project costs. ABC will continue to work with government officials to develop solutions to these significant price increases to protect construction jobs and support critical projects.

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Today, the U.S. Department of Labor Wage and Hour Division announced proposals to rescind the Trump DOL joint employer and independent contractor final rules. The public has until April 12 to comment on both proposals.

ABC issued a statement, saying “It is disappointing that the Biden administration announced proposed rules to rescind both the joint employer and independent contractor final rules. ABC strongly supported both final rules because they promised to promote economic growth in the construction industry by providing greater clarity and removing unnecessary burdens on construction industry employers.”

DOL Independent Contractor Final Rule:

ABC is on record as strongly supporting the Trump DOL’s independent contractor January 2021 final rule, which clarifies the WHD’s interpretation of independent contractor status under the Fair Labor Standards Act and promotes certainty for employers, independent contractors and employees.

However, on March 2, the Biden administration announced a final rule that delays the Trump-era independent contractor final rule’s effective date from March 8 to May 7, 2021. On Feb. 24, ABC submitted comments in opposition to the DOL’s proposal to delay the effective date because the final rule provides urgently needed clarification of the independent contractor standard applicable under the FLSA.

On March 11, the DOL announced it plans to rescind the Trump-era final rule. The public can comment on the proposal until April 12.

Read more about ABC’s position on the Trump DOL independent contractor final rule.

DOL Joint Employer Final Rule:

ABC applauded the Trump administration for issuing the 2020 DOL joint employer final rule, which promised to make the joint employment test more narrow and focused. However, on Sept. 8, a U.S. District Court for the Southern District of New York judge ruled that parts of the DOL’s joint employer final rule are illegal. ABC intervened in the case, in part to defend the construction industry against unwarranted attacks on the industry’s long-established methods of doing business by the state plaintiffs. 

On March 11, the DOL announced it plans to rescind the final rule.  The public can comment on the proposal until April 12.

Read more about ABC’s position on the Trump DOL joint employer final rule.

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On March 10, House Democrats approved the $1.9 trillion spending package under budget reconciliation in a 220-211 vote, handing President Biden his first major legislative win in the new administration. While Democrats have focused on the bill’s relief efforts, including direct payments to individuals, rental assistance, expansion of the child tax credit, extension of unemployment insurance, testing and tracing of COVID-19 infections and funding for the distribution of vaccines throughout the country, Republicans have criticized the bill for its high price tag, lack of targeted response to the immediate needs of Americans and the economy, and the inclusion of hundreds of billions of dollars to support a federal bailout of distressed pension plans and local and state governments.

The package also failed to include limited liability protections for businesses operating during the COVID-19 pandemic. Senate Minority Leader Mitch McConnell called liability protections a red line for Republicans in Congress, and ABC has continued to advocate for liability protections in COVID-19 relief legislation to ensure construction businesses are protected from frivolous, costly lawsuits.

With passage of this bill, the federal government’s COVID-19 response now totals $5.5 trillion. President Biden is set to tout his legislative victory in a prime-time address on March 11 and a national tour along with the first lady, vice president and other White House officials to highlight the bill’s benefits for Americans, hoping to boost its popularity.

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On March 5, ABC and a coalition of 14 industry and employer groups sent a letter to President Biden raising concerns about the expansion of policies encouraging or mandating project labor agreements on federal and federally assisted construction projects.

ABC and the coalition are monitoring Biden administration executive actions, federal agency policies and legislation introduced in the 117^th Congress that might promote government-mandated PLAs and exclude quality contractors and 87% of the construction industry from competing to win contracts to build construction projects funded and authorized in forthcoming spending and infrastructure legislation.

ABC and the coalition also supports the Fair and Open Competition Act (S. 403/H.R. 1284), reintroduced in the 117^th Congress by Sen. Todd Young (R-Ind.) and Rep. Ted Budd (R-N.C.), which would restrict government-mandated PLAs on federal and federally assisted construction projects.

In a Feb. 24 ABC press release, ABC applauded the introduction of the bill that would encourage more qualified construction companies to compete for federal and federally funded construction projects, providing value for hardworking taxpayers while benefiting the construction industry.

After the bill was introduced, an ABC-led coalition of 17 construction industry and business associations sent a letter to Congress in support of the bill, urging them to immediately pass this legislation.

ABC encourages ABC chapters, members and industry stakeholders to participate in a grassroots campaign urging their U.S. House and Senate lawmakers to sign on as a cosponsor of FOCA in the 117^th Congress.

The full text of the letter appears below. 

March 5, 2021

The Honorable Joseph R. Biden Jr.
The White House
1600 Pennsylvania Avenue
Washington, DC  20500

Dear President Biden: 

Our diverse coalition of construction and business associations formally requests a meeting with administration officials in charge of infrastructure policies to discuss an issue of great importance to our collective memberships and America’s economic recovery.

We applaud the Biden administration’s ongoing efforts addressing the state of America’s infrastructure. We are in strong agreement that our roads, bridges, schools and water, energy and transportation systems are in urgent need of public and private investment in order to accelerate America’s strong economic comeback and keep our country competitive in a global economy. 

However, we share concerns about the expansion of existing policies on federal and federally assisted construction projects that needlessly increase costs to taxpayers, unfairly limit competition by some of America’s best contractors and ultimately exclude almost nine out of 10 of the construction industry’s workforce from middle class jobs and benefits resulting from government investment in infrastructure. 

Specifically, we are concerned about the expansion of policies encouraging the use of government-mandated project labor agreements on federal and federally assisted construction projects. 

A PLA is a jobsite-specific collective bargaining agreement unique to the construction industry that typically requires companies to agree to recognize unions as the representatives of their employees on that job, use the union hiring hall to obtain most or all construction labor, exclusively hire apprentices from union programs, follow union work rules, and pay into union benefit and multi-employer pension plans that nonunion employees will be unlikely to access. This forces employers to pay “double benefits” into their existing plans and union plans and places such firms at a significant competitive disadvantage. In addition, PLAs typically force construction workers to pay union dues and/or join a union if they want to work on a PLA project and receive benefits earned while working on the job.

When mandated by government agencies and lawmakers, PLAs can supersede and interfere with existing collective bargaining agreements contractors have already negotiated with various unions. In addition, PLA mandates unfairly discourage competition from quality nonunion contractors and their employees, who comprise 87.3% of the private U.S. construction industry workforce, according to the most recent U.S. Bureau of Labor Statistics data. 

The federal government’s existing PLA policy, Executive Order 13502, signed Feb. 6, 2009, encourages federal agencies, on a case-by-case basis, to require PLAs on federal construction projects exceeding $25 million in total value and permits states and localities to mandate PLAs on federally assisted projects in order to “promote the economy and efficiency in federal procurement.” 

However, subsequent government-mandated PLAs on federal and federally assisted projects have resulted in reduced competition, increased costs, delays, poor local hiring outcomes and litigation. In addition, multiple studies of hundreds of taxpayer-funded school construction projects found that PLA mandates increase the cost of construction by 12% to 20% compared to similar non-PLA projects.  Simply put, hardworking taxpayers are getting less and paying more when PLAs are encouraged or mandated by government on federal and federally assisted construction projects.

Government-mandated PLAs are especially problematic considering two key data points; 1) industry reports estimate the U.S. infrastructure spending deficit will total $2.6 trillion by 2029 and more than $5.6 trillion by 2039;  and 2), the U.S. construction industry faces a 9.6% unemployment rate  due to the recession caused by COVID-19. 

For these reasons, we are especially troubled to see the U.S. Department of Transportation Build America Bureau’s Feb. 17, 2021, announcement that the FY 2021 Infrastructure for Rebuilding America (INFRA) discretionary grant program  is encouraging grant applicants to mandate PLAs.  

We hope that this change is not a signal of a broader Biden administration policy shift to expand the use of controversial and exclusionary government-mandated PLAs on taxpayer-funded construction projects.

We look forward to meeting with your team to discuss inclusive policy solutions that expand the benefits of rebuilding America’s infrastructure to the entire construction industry. Ensuring fair and open competition on taxpayer-funded construction projects will ultimately result in savings to taxpayers, more opportunities for all qualified small businesses, minorities and women in the construction industry, and the construction of more quality infrastructure projects so America can Build Back Better and faster.

Sincerely,

American Fire Sprinkler Association
American Pipeline Contractors Association
Associated Builders and Contractors
Business Coalition for Fair Competition
Construction Industry Round Table
Electronic Security Association
Independent Electrical Contractors
National Black Chamber of Commerce
National Federation of Independent Business
National Ready Mixed Concrete Association
National Roofing Contractors Association
National Utility Contractors Association
Power and Communication Contractors Association
Small Business and Entrepreneurship Council
 

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ABC has added Central Florida Chapter member Roy Burkett of S. I. Goldman Company Inc. to the Beam Club Presidential Level.

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.

To reach the Presidential Level of the Beam Club, ABC members must recruit between 25 and 49 new members.

For more information on the Beam Club, contact Leiloni Hayward at [email protected].

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According to findings of an ABC membership survey published on March 3, 2021, ABC members overwhelmingly support repeal or reform of the federal Davis-Bacon Act and related state and local prevailing wage laws that increase costs and reduce competition from qualified contractors on taxpayer-funded construction projects. The Davis-Bacon Act is a 1931 law that requires contractors and subcontractors that perform work on federally funded or assisted construction contracts in excess of $2,000 to pay a government-determined prevailing wage and benefit rate on an hourly basis to on-site workers.

The survey found:

• 87.9% of participants do not support prevailing wage laws and the Davis-Bacon Act in its current form.
• 83.1% of participants support full repeal of prevailing wage laws.
• 82.1% of participants support reforms to prevailing wage laws.

“The survey results reaffirm that the 90-year-old Davis-Bacon Act, an archaic and costly policy that is far past its expiration date and similar state and local laws in 27 states, must undergo commonsense regulatory reforms or be fully repealed,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This system of federal, state and local governments setting ‘prevailing wages’ is outdated, needlessly raises construction project costs, stifles contractor productivity and discourages competition from small businesses interested in pursuing federal and federally assisted construction projects.”

Prevailing Wage Regulations Increase Costs and Reduce Opportunity

Approximately 94% of the 350 survey participants believe that government prevailing wage laws make projects more expensive. Meanwhile, 67.6% said the laws result in less competition from subcontractors and 75% said it would make contractors less likely to bid on public works projects in their own communities, paid for by their own tax dollars.

“As the construction industry is suffering from a 9.4% unemployment rate due to the recession caused by the COVID-19 pandemic, and America’s crumbling infrastructure faces an estimated $2.6 trillion investment gap by 2029, lawmakers considering a multitrillion dollar infrastructure spending bill need to do everything possible to maximize taxpayer investments in infrastructure while helping all construction workers and small businesses find quality jobs to rebuild their communities,” said Brubeck.

“The Congressional Budget Office estimates that repealing the Davis-Bacon Act would save the federal government $17.1 billion between 2021 and 2030, but research suggests repealing the Act would actually save taxpayers more than $11.56 billion a year,” said Brubeck.

According to economic models, every $1 billion in extra overall construction spending generates an average of at least 6,500 construction jobs and every $1 billion in extra construction spending on infrastructure generates an average of at least 3,300 construction jobs.

In 2017, a study by the Heritage Foundation estimated 30,000 more real construction jobs would be created on an annual basis if the U.S. Department of Labor enacted commonsense regulatory reforms repeatedly suggested by the Government Accountability Office and the DOL Office of Inspector General, as they would help calculate an accurate prevailing wage in a timely manner.

Survey participants also highlighted how prevailing wage laws harm small and minority-owned businesses, result in more expensive and/or less affordable housing and school construction and make it harder to finance green energy projects and support energy-saving home weatherization.

“Survey participants noted that prevailing wage laws will hit small businesses particularly hard and decrease the hiring of small businesses,” said Brubeck. “This is because it would force them to hire or assign additional personnel to comply with prevailing wage red tape.”

Survey Results Undermine Prevailing Wage Advocate Arguments

The majority of survey participants said prevailing wage laws either harm or have little positive impact on workforce development, attracting a skilled workforce, enhancing project safety, ensuring a quality project delivered on time and on budget and the hiring of local, minority, women, veteran and disadvantaged businesses:

• 60.7% said it makes no difference, while 36.5% said it will harm their company’s investment in workforce development strategies.
• 77.8% said it will not have an impact on their ability to attract skilled workers, while 8% said it would result in attracting less-skilled workers.
• 94.9% said it will make not make a difference in a company’s safety performance on a project, while 2% said it would make a project less safe.
• 92% said it will not make a difference in a project’s construction quality, while 5.1% said it would decrease quality.
• 61.9% said it will make no difference to project’s on-time and on-budget delivery, while 35.5% said it would decrease on-time and on-budget delivery.
• Approximately 65% said it will make no difference in local hiring outcomes, while 27.7% said it would result in worse local hiring outcomes.
• 76.7% said it will make no difference in the hiring of minority, women, veteran and disadvantaged business enterprises, while 18.8% said it would decrease hiring of disadvantaged businesses.
• 77.5% said it makes no difference in the hiring of hiring of minority, women, veteran and ex-offender construction workers, while 19.7% said it would decrease hiring of these disadvantaged workforce populations.

“The survey results undermine arguments prevailing wage advocates cite as a reason to require anti-competitive and costly prevailing wages on taxpayer-funded construction projects,” said Brubeck. “Open-ended responses to survey questions make it clear that prevailing wage laws provide little value and often undermine contractor efforts to upskill and retain a diverse workforce. The truth is, the alleged benefits of prevailing wage laws can be achieved through specific procurement language and strong prequalification standards independent of prevailing wage regulations.”

“Our employees are our company’s greatest asset, and we must continue to upskill them to stay safe and productive in order to deliver to customers a high-quality project on time and on budget,” said one survey participant. “We invest in workforce development through our company training programs as well as participate in government-registered apprenticeship programs in certain trades. We make these investments regardless of whether we are performing prevailing wage work or private work. It makes no difference to our value proposition.” 

ABC Membership Not Unanimous on Prevailing Wage Repeal/Reform

Of note, the survey confirmed there are ABC member contractors who support prevailing wage laws for a variety of reasons, despite the fact that they believe it increases taxpayer costs and reduces competition from contractors. In open-ended responses, some contractors characterized prevailing wage laws as helpful to their business because: 1) They allow companies to pay employees an above-market premium that is passed on to taxpayers; 2) They discourage competition from firms that haven’t mastered compliance strategies with the red tape associated with prevailing wage regulations; and 3) They prevent union lobbyists from mandating union-only project labor agreements that lock out the more than 87% of the construction industry that chooses not to belong to a union.”

“Although more expensive, we can compete on a level playing field with unionized contractors on prevailing wage projects, which is not the case with government-mandated project labor agreements, where we cannot compete at all,” said a participant.  “One key benefit of prevailing wage laws is that when construction unions lobby for government-mandated PLAs, opponents can point to the fact that workers are already paid union rates; therefore, union-only PLA monopolies are not needed to protect workers and are bad policy. Unfortunately, lawmakers usually do not get the distinction and care more about the politics than policy.”

Some participants supported a government-determined wage floor, but felt that that the current rates are excessive, are not prevailing and are not accurate, while others wanted regulatory clarity.

“Rates in my rural marketplace are identical to rates charged in expensive cities in my state. These rates are not prevailing and do not meet local standards and violate the intent of the Davis-Bacon Act,” said one participant.

“The rates are excessive and are not even close to prevailing rates in our market. The fringe benefits on some union prevailing wage rates are in excess of 60% of the wage rate to make up for chronic pension underfunding by the union,” said another participant.

“We need more clarity on union work rules related to U.S. DOL wage decisions. Cloak-and-dagger policies and enforcement are why businesses distrust government and increase risk costs in bids,” said a participant.

“The union lobby wants to make prevailing wage compliance as complicated as possible so they can use it as a weapon to target competitors and get them debarred if they accidentally are out of compliance,” said a participant. “There needs to be a good-faith exception to differentiate between bad actors and good actors making honest mistakes.”

State Prevailing Wage Laws

A total of 27 states have enacted prevailing laws applying to most or some of their taxpayer-funded construction projects procured by state and local governments, depending on the threshold and applicability of their respective law. Of the 27 prevailing wage states, six states set rates identical to the Davis-Bacon Act, seven states explicitly set rates at the union collective bargaining agreement rate, nine states set rates through a survey process and the remaining states set rates through other methodologies.

Since 2015, Michigan (2018), Arkansas (2017), Kentucky (2017), Wisconsin (2017), West Virginia (2015) and Indiana (2015) have repealed their prevailing wage laws.

Following West Virginia’s repeal, a 2018 study conducted by the University of Kentucky Center for Business and Economic Research found that total costs for public school construction in West Virginia declined by more than 7%. Additionally, the CBER found no evidence that repealing this mandate had any impacts on safety or quality of construction.

Similar research measuring the impact of prevailing wage repeal is underway in multiple states.

Additional ABC Resources on Prevailing Wage Policies

ABC supports the full repeal of the Davis-Bacon Act, as well as any state and local prevailing wage laws that mandate wage and benefit rates. In the absence of full repeal of the Davis-Bacon Act and state prevailing wage laws, ABC also continues to support legislative and regulatory reform efforts designed to mitigate its negative effects and failure to reflect the current market rate. ABC opposes expansion of Davis-Bacon and state and local prevailing wage laws into areas of public and private projects in which it has not been previously mandated.

Learn more about the Davis-Bacon Act at abc.org/DavisBacon and abc.org/Education-Training.

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The Unionstats.com website was recently updated with the latest state-specific union membership data based on the January release of the U.S. Bureau of Statistics’ 2020 nationwide data on unionization rates. These data, which can be found in Table II of the website, are compiled from the monthly household Current Population Survey using BLS methods. The site provides private construction percentages broken down by state, as well as numbers for certain metropolitan areas. Historical unionization data dating back to 1983 can also be accessed on the website.

Nationally, the percentage of workers in the construction industry who chose to join a union in 2020 stood at 12.7%. Some highlights from the Unionstats.com. data show:

• 29 states and Washington, D.C., have construction unionization rates lower than the national average.
• At least 7 out of 10 workers in every state opted not to join a construction trades union in 2020. 
• The nonunion construction workforce remained steady or increased in a majority of the states.

Additional information on the national unionization rates across all industries can be found on the BLS website, including the news release and full report. Please contact Nick Steingart, ABC National’s manager of state and local affairs, with questions regarding issues related to union membership nationally, for your region or state.

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