Category: News Line

On Sept. 3, ABC sent a letter to  Rep. James Comer, the ranking member of the U.S. House of Representatives Committee on Oversight and Reform, explaining the negative impacts of the Obama administration’s regulatory expansion on ABC member contractors, as well as the Trump administration’s regulatory relief initiatives, which have helped to remove burdensome barriers to job creation.

“ABC member contractors applaud the Trump administration’s substantial deregulatory efforts, which brought to light cost and burdens these regulations put on contractors,” said ABC in the letter. “During the Obama administration, ABC members suffered from an aggressive and burdensome rulemaking agenda, where regulations were promulgated hastily with limited stakeholder input and questionable legal authority. Many of the Obama-era regulations were litigated, which created significant uncertainty for ABC member contractors and hampered economic growth. To promote economic growth, we must free industry from those regulations that create unnecessary and costly bureaucratic layers.”

ABC’s most pressing concerns are centered around three areas:

1. Government-mandated project labor agreement policies that are inconsistent across federal agencies
2. U.S. Department of Labor policies related to the Davis-Bacon Act that stifle competition and impose enormous burdens on contractor productivity and needlessly increase construction costs
3. DOL policies that serve as barriers to workforce development

ABC described how these issues have a chilling effect on competition and impede job creation and economic recovery:

1. Government-mandated PLAs

• Anti-competitive and costly government-mandated PLAs on federal and federally assisted contracts drive up the cost of taxpayer-funded construction projects by between 12% and 20%.
• Government-mandated PLAs unfairly discourage merit shop contractors, which employ more than 87.4% of the U.S. construction workforce, from bidding on the projects. The negative impact of PLAs disproportionately harms small businesses.
• The needless paperwork, waste and red tape associated with the federal government’s evaluation and procurement of federal contracts potentially subject to government-mandated PLAs is especially frustrating. ABC is aware of just 12 contracts exceeding $25 million (totaling $1.25 billion) that were procured and built in the United States subject to federal government-mandated PLAs and PLA preferences out of 1,681 federal contracts (totaling $98.74 billion) from FY2009 through FY2019 that were subject to the Obama administration’s pro-PLA Executive Order 13502.  
• In contrast, the prevalence of PLA mandates on federally assisted projects procured by certain blue states and localities are wasting billions of federal tax dollars, slowing the velocity of new infrastructure and stifling job creation and opportunity for all industry professionals during America’s economic recovery from the COVID-19 pandemic.

2. DOL’s Davis-Bacon Act policies

• ABC members frequently cite onerous Davis-Bacon Act regulations and compliance costs as reasons why they do not pursue public works projects subject to federal, state or local prevailing wage laws.
• Regulations implementing DOL’s Wage and Hour Division process to survey contractors and determine prevailing wage rates is inherently flawed and fails to produce accurate, prevailing or timely rates.
• In recent years, union wage rates have been found prevailing in a substantial majority of classifications, even though the percent of unionized workers in the U.S. construction industry measured by the Bureau of Labor Statistics has fluctuated between 12.6% and 14.5% during the past decade.
• DOL’s failure to provide detailed information about job duties that correspond to each published wage rate makes it difficult to determine the appropriate wage rate for many construction-related jobs. These wage determinations force federal contractors to use outdated and inefficient union job classifications that ignore the productive multitrade work practices successfully used in the merit shop construction industry.
• The Congressional Budget Office has estimated that the repeal of the Davis-Bacon Act would save $12 billion in federal construction costs between 2019 and 2028. ABC believes the CBO vastly underestimates the true inflated cost of the Davis-Bacon Act because the methodology is extremely conservative. In addition, the CBO does not address the associated increased costs on public works projects procured by state and local governments subject to state and local prevailing wage laws modeled after the federal Davis-Bacon Act. These are large markets and have a significant impact on state and local budgets and the quality of U.S. infrastructure, overall.

3. DOL’s workforce development policies

• To successfully expand apprenticeship opportunities and close the skills gap, all U.S. workers should have the opportunity to participate in DOL’s new industry-recognized apprenticeship program, particularly as federal registered apprenticeship programs supply only a small fraction of the construction industry’s workforce.
• While considering new industry programs in 2019, it appears DOL did not take into consideration that the overwhelming majority of America’s 8.17 million U.S. construction industry professionals never participated in any federal registered apprenticeship programs but are instead developed through industry-recognized and market-driven apprenticeships sponsored by companies large and small.
• Graduates of federal registered apprenticeship programs supply just 3.2% of the estimated 550,000 additional construction workers needed to meet industry demands in 2020 alone, according to ABC’s estimates prior to the economic downturn caused by the COVID-19 pandemic. At current levels of graduation, it would take more than 30 years for the federal registered apprenticeship program to meet industry demands for just this year.

Additionally, ABC identified the following anti-growth, Obama-era regulations that the Trump administration eliminated, reversed and/or modified. The Trump administration’s actions promote free enterprise, reduce regulatory burdens and costs and positively impact employers and workers in the industry.

• Rescinded the FAR Fair Pay and Safe Workplaces (Blacklisting) final rule
• Rescinded the DOL Persuader final rule
• Eliminated the OSHA Volks final rule

• Modified the DOL Overtime final rule
• Modified the OSHA Tracking of Workplace Injuries and Illnesses final rule
• Modified the OSHA Respirable Crystalline Silica final rule
• Modified the 2014 NLRB Ambush Elections final rule
• Reversed the 2015 NLRB Decision in Browning-Ferris Industries
• Repealed and replaced the 2015 WOTUS final rule

Lastly, ABC pointed out that ABC members continue to see meaningful regulatory relief from the Trump administration. In his first term so far, President Trump has eliminated $50.9 billion in overall regulatory costs across the government. ABC continues to strongly support comprehensive regulatory reform, which should include across-the-board requirements for agencies to evaluate the risks, weigh the costs and assess the benefits of regulations. This will better allocate limited resources and target efforts toward achieving the collective environmental, health and safety goals for the construction industry.

Read the full letter here.  

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On Sept. 8, a U.S. District Court for the Southern District of New York judge ruled that parts of the U.S. Department of Labor’s joint employer final rule, which was issued on Jan. 16, 2020, are illegal. Associated Builders and Contractors had applauded the 2020 joint employer final rule, which promised to make the joint employment test more narrow and focused when it went into effect on March 16. 

“The Trump administration’s joint employer regulation promised to bring additional clarity to a confusing area of the law, help alleviate unnecessary barriers to and burdens on contractor and subcontractor relationships throughout the construction industry, reduce needless litigation and encourage innovation in the economy,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “We are disappointed that the Obama-appointed judge misapplied precedent in failing to defer to the DOL’s guidance and refusing to uphold the new rule in its entirety. We believe the judge got it wrong on both procedural and substantive grounds, strongly suggesting the need for an appeal.”

The court struck down the rule as it applies to “vertical” employment, which occurs when an employee works for one company but may be economically dependent on or controlled by another company. The decision does not affect “horizontal” employment, which occurs when the employee has employment relationships with two or more employers and the employers are sufficiently associated.

“Unfortunately, vertical joint employment, which occurs when an employee works for one company but may be economically dependent on or controlled by another company (staffing, contracting, franchising, etc.) is the type of relationship that caused so much confusion under the previous rule,” said Brubeck.

In February, 18 blue states sued DOL in federal court to strike down its final rule updating and clarifying its interpretation of joint employment, officially titled Joint Employer Status Under the Fair Labor Standards Act. A business coalition that includes 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. ABC’s general counsel, Littler Mendelson P.C., handled the intervention filings.

Read ABC’s comments in support of DOL’s 2020 joint employer proposed rule.

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On Aug. 31, the U.S. Department of Labor’s Occupational Safety and Health Administration issued a final rule amending its standards for occupational exposure to beryllium and beryllium compounds in the construction and shipyard sectors. ABC and other construction organizations previously filed a settlement with the agency to effectively narrow the scope of the Obama administration’s beryllium final rule, which would have applied a comprehensive, burdensome set of requirements related to beryllium on all construction employers.

As part of the settlement, filed in the Eighth Circuit Court of Appeals on Aug. 25, OSHA agreed to issue an FAQ that makes clear that for normal construction operations, exposures to common construction materials will typically not be covered by the rule. The FAQ states, “exposure to rock, soil, concrete and brick at the typical construction site will not result in beryllium exposure above the action level under foreseeable conditions.” and thus, will  not be covered by the rule. This outcome addresses the concerns of ABC, the National Association of Home Builders and the Mason Contractors Association of America and provides certainty for contractors in how they approach and prioritize their safety and health programs.

According to a DOL news release, the final rule, officially titled Occupational Exposure to Beryllium and Beryllium Compounds in Construction and Shipyard Sectors, amends the standard’s sections on methods of compliance, respiratory protection, personal protective clothing and equipment, medical surveillance, recordkeeping and more. Additionally, the language included in OSHA’s FAQ is part of the new final rule’s preamble.

The final standards will affect roughly 12,000 workers employed in nearly 2,800 establishments in the construction and shipyard industries and are estimated to yield $2.5 million in total annualized cost savings to employers.

The final rule will go into effect on Sept. 30, 2020. Additional  information on the rulemaking can be found on the DOL website.

As part of the Construction Industry Safety Coalition, ABC has been heavily involved in OSHA’s rulemaking efforts over the last several years in attempt to limit the application of the original rule within the construction industry. Specifically, on Nov. 7, 2019, CISC submitted comments to OSHA on a beryllium proposed rule that maintained the lower eight-hour permissible exposure limit and short-term (15-minute) exposure limit and made minor changes to the ancillary provisions of the beryllium standard that are tailored for the construction industry. Additionally, members of CISC participated in the informal public hearing on the rule held by the agency in 2019.

Several members of the CISC, which include ABC, NAHB and MCAA, also filed suit against OSHA in the D.C. Circuit Court of Appeals to challenge the original Obama administration’s rule and an interim Trump administration rule.

Read more about ABC’s actions in the beryllium regulatory process in Newsline.

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The ABC PAC is kicking off the Fall Meet & Greet Series with Sen. Todd Young (R-Ind.) on Tuesday, Sept. 15, from 4:15-4:45 p.m. ET.  This event is free of charge for all ABC members who have a completed a prior authorization for this calendar year.

Federal law requires members to sign a prior authorization form in order for the executive or administrative personnel of the member corporation to be solicited by ABC PAC. ABC members can complete the required prior authorization form through the online Prior Authorization Portal. Note, each company can only sign a prior approval form for one trade association this year. Please email ABC PAC with any questions.

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ABC’s Chief Economist Anirban Basu reports on the national nonresidential construction spending which fell 1.2% in July, according to an ABC analysis of data published by the U.S. Census Bureau.

To learn more visit abc.org/economics.

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On Aug. 31, the U.S. Department of Labor’s Wage and Hour Division published a notice in the Federal Register to announce that the minimum wage for federal contractors will increase from $10.80 per hour to $10.95 per hour beginning Jan. 1, 2021.

The increase is a result of the DOL’s 2014 final rule, which implemented Executive Order 13658 on Establishing a Minimum Wage for Contractors and raised the hourly minimum wage paid by contractors to workers on covered federal contracts to $10.10 with annual increases thereafter. This was determined by the secretary of labor in accordance with the methodology set forth in the order.

More information on EO 13658 and the annual wage increase can be found on the DOL website.

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On Thursday, Sept. 10, ABC will continue its Election Briefing Series with an exclusive Mid-America and Midwest region election update. It will be followed by two national updates from the National Republican Congressional Committee on Thursday, Sept. 24 and the National Republican Senatorial Committee on Thursday, Oct. 22.

Registration is now open for all of these upcoming events, so make sure to register today.

These updates are a part of the ABC Election Update Series, which is powered by the Free Enterprise Alliance. It is reserved for ABC members and registration is free of charge thanks to our generous sponsors.

Please contact Melanie Pfeiffenberger, ABC National director of political affairs, for more information at pfeiffenberger@abc.org.

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On Tuesday, Sept. 1, President Trump’s memorandum deferring payroll tax obligations went into effect.

According to ABC’s general counsel, Littler Mendelson P.C., this memorandum allows for the deferral of the employee portion of federal payroll taxes — 6.2% for social security and 1.45% for Medicare — from Sept. 1, 2020, until Dec. 31, 2020, for workers earning less than $4,000 on a biweekly basis or $104,000 annually. Under the guidance issued, an employer may elect to defer the payment of the employee portion of these taxes on “applicable wages” until next year, when they would be owed in installments between Jan. 1, 2021, and April 30, 2021, unless Congress acts to waive the repayment requirement. Tax experts have said the guidance leaves a number of key questions unanswered, such as what happens if an employee leaves a company before April 30, and how the guidance applies to seasonal workers and employees with irregular hours.

With the repayment requirement in place and the order voluntary, it seems that many employers will likely decline to implement a deferral for employees and continue to withhold the payroll taxes required by law.

For more information about this memorandum, you can read this guidance from the U.S. Treasury Department or this guidance from Littler.

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On Thursday, Aug. 27, the U.S. Department of Labor’s Wage and Hour Division published new frequently asked questions for workers and employers regarding qualifications for paid leave eligibility under the Families First Coronavirus Response Act, specifically adding new guidance detailing paid leave options related to schools reopening.

The FAQs address whether employees qualify for paid leave when:

For a detailed analysis of the new FFCRA FAQs, read New FFCRA FAQs Address Return-to-School Leave Issues, published by ABC general counsel Littler Mendelson, P.C. Additional FFCRA FAQs are available here.

FFCRA requires private-sector employers with fewer than 500 employees and certain public employers to provide covered employees emergency paid sick leave and expanded family and medical leave. The FFCRA’s paid leave provisions went into effect on April 1, 2020, and apply to leave taken between April 1, 2020, and Dec. 31, 2020.

This latest FAQ adds to the multiple tools the DOL has already made available to advise on paid leave eligibility. The department has also released an online tool to determine eligibility, videos explaining paid leave eligibility and an infographic showing how much time an individual can take off work under different circumstances.

DOL’s WHD has continued to update its website to provide the latest news on benefits under FFCRA and can be accessed here.

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David Allen Co. of Raleigh, North Carolina, a member of ABC’s Carolinas and Central Florida chapters, has been awarded Accredited Quality Contractor status by ABC.

The AQC program recognizes and honors construction firms that document their commitment to excellence in five key areas of corporate responsibility: quality, safety, craft and management education, talent management and diversity and community relations.  A company that meets the criteria set forth in the program and has earned STEP Gold, Platinum or Diamond status in ABC’s safety management system is formally designated an Accredited Quality Contractor.    

Companies that achieve the AQC credential receive:

• Wide recognition within the industry and business community and with the public
• Authorization to use AQC language in bid documents
• Permission to use the AQC logo on letterhead, business cards and jobsite signs
• Access to AQC marketing materials such as hard hat stickers, membership plaques, etc.
• Recognition in FindContractors.com, ABC’s search tool to identify fellow ABC members by company name, chapter, CSI and NAICS codes and other designations
• Points on ABC National Excellence in Construction® award submissions
• Mention in the December issue of ABC’s magazine, Construction Executive
• Eligibility for ABC’s Top Performers lists

For more information, visit abc.org/aqc or contact aqc@abc.org. Applications will be accepted through October 30, 2020.

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