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ABC reported that its Construction Backlog Indicator declined to 7.8 months in July, a decrease of 0.3 months from the June reading, according to an ABC member survey conducted from July 20 to Aug. 5. Backlog is a full month lower than in July 2019.
To learn more visit abc.org/economics
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You are invited to an exclusive South Central region election update on Thursday, Aug. 13, from 3-3:30 p.m. EDT. ABC National staff will be joined by Will McAdams, president of ABC Texas. This is an update you will not want to miss. Register today!
The ABC Election Briefing Series is free of charge and reserved for ABC members only. Sponsorship opportunities are available. Please contact Melanie Pfeiffenberger, ABC National director of political affairs, for more information at pfeiffenberger@abc.org or (202) 595-1813.
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On Aug. 3, an Obama-appointed federal judge in New York nullified key sections of the U.S. Department of Labor’s rules governing paid leave under the Families First Coronavirus Response Act.
Of greatest concern to construction, the decision invalidates previous DOL guidance restricting paid leave during layoffs and furloughs and the DOL rules requiring employer consent to paid intermittent leave and employees to provide documentation before taking leave. (The judge also declared unlawful the broad definition of “health care providers,” who had been exempted from the leave requirements.)
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.
The decision creates many issues for construction industry employers who have been obeying the DOL rules now declared to be unlawful. For more information, listen to this Aug. 4 ABC webinar, New COVID-19 Paid Leave Issues for Employers as the Country Reopens, where ABC General Counsel Maury Baskin from Littler Mendelson P.C. addresses the impact of the court decision. You can read more on this decision in this analysis from Littler.
Employers should continue to monitor Newsline for updates on the case and its impact on the rules governing paid leave.
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On July 29, the National Labor Relations Board issued a proposed rule titled Representation-Case Procedures: Voter List Contact Information; Absentee Ballots for Employees on Military Leave, which proposes two amendments to the representation election regulations under the National Labor Relations Act.
An NLRB news release states the first amendment would amend the agency’s rules and regulations to eliminate the requirement that employers provide available personal email addresses and home and personal cellular telephone numbers of all eligible voters to the regional director and other parties during an election campaign. The second amendment would provide absentee ballots for employees who are on military leave.
According to an analysis from ABC’s general counsel, Littler Mendelson P.C., the first amendment signals the NLRB’s return to requirements established in the Excelsior Underwear,Inc., 156 NLRB 1236 (1966) decision, which required employers to provide the full names, work locations, shifts, job classifications and home addresses of all eligible voters before an approved election agreement or decision and direction of election.
The Littler analysis further states, “The Excelsior requirement to provide names and home addresses of eligible voters stood for nearly 60 years before the 2014 amendments made by the final rule markedly expanded the amount of required personal information, commanding that employers provide all ‘available’ personal email addresses and home and personal cell phone numbers directly to the union, rather than to the Board.” According to the NLRB news release, the Board believes, subject to comments, that elimination of the requirement that employers provide available personal email addresses and home and personal cellular telephone numbers of all eligible voters to the regional director and other parties during an election campaign will advance important employee privacy interests that the current rules do not sufficiently protect.”
Additionally, the analysis states the NLRB believes that the three-month voting period estimated in 1940’s-era Board decisions dealing with military mail balloting is no longer a reliable figure, and the Board also reasons that allowing service members to vote by absentee ballot is in line with changes in the law since 1950.
ABC plans to submit comments on the NLRB proposal before the Sept. 28, 2020, deadline and will provide updates on the rulemaking process through Newsline.
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On July 28, ABC sent a letter to President Trump applauding him for issuing two executive orders, Regulatory Relief to Support Economic Recovery and Accelerating the Nation’s Economic Recovery from the COVID-19 Emergency by Expediting Infrastructure Investments and Other Activities, which will help to remove burdensome barriers to job creation and help the economy continue to rebound from the COVID-19 crisis.
In the letter, ABC identified the following issues for the Trump administration and federal agencies to consider during their review of regulatory obstacles to economic recovery, which are especially important to address as Congress and the administration work towards legislation making a considerable investment in America’s infrastructure:
ABC also provided highlights of how these issues have a chilling effect on competition and impede job creation and economic recovery.
1. Government-mandated project labor agreements:
ABC is aware of only 12 contracts totaling $1.25 billion that were procured and built in the United States subject to federal government-mandated PLAs and PLA preferences (under the Obama administration’s pro-PLA Executive Order 13502) on projects exceeding $25 million, out of a total of 1,681 federal contracts worth $98.74 billion from FY2009 through FY2019. 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:
In recent years, union wage rates have been found prevailing in a substantial majority of classifications, even though the percentage 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.
The Congressional Budget Office 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 cost of the Davis-Bacon Act, and this data only addresses construction costs on federal projects. It does not address federally assisted projects subject to the Davis-Bacon Act or other public works projects subject to state and local prevailing wage laws impacting state and local budgets.
3. DOL’s workforce development policies:
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.
Read the full letter here.
ABC applauds the Trump administration’s efforts to address federal polices and regulations harming America’s job creation and economic growth and looks forward to working with officials on these important issues.
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On July 27, ABC submitted comments to the U.S. Department of the Treasury and U.S. Small Business Administration on an interim final rule changing key provisions of the SBA’s Paycheck Protection Program and its loan forgiveness and loan review procedures.
While ABC expressed support for several changes to the PPP, such as decreasing the portion of a PPP loan that must be spent on payroll costs from 75% to 60% and increasing the timeline to spend PPP funds from eight weeks to 24 weeks, ABC also urged the agencies to take the following actions in order to further assist small businesses:
ABC has followed the implementation and additional revisions to the PPP and submitted comments on a previous rulemaking related to the program.
ABC will continue to provide updates on the PPP and other SBA resources through Newsline and at abc.org/coronavirus.
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On July 27, the Senate GOP finally released the HEALS Act, its $1 trillion coronavirus relief plan. This package is seen as a starting point for Republicans, teeing up what could be weeks of tough bipartisan negotiations with Democrats to provide much-needed relief in response to the COVID-19 health and economic crisis. ABC will continue to provide updates on these negotiations as they move forward.
Of note, the package would:
Under the CARES Act, employers are eligible for the ERTC if their operations were fully or partially suspended due to a COVID-19-related shutdown order or if gross receipts declined by more than 50% when compared to the same quarter in the prior year. The HEALS Act lowers the amount of the reduction in gross receipts required to qualify as an eligible employer from a 50% decline to a 25% decline compared to the same calendar quarter in the previous year. The CARES Act limited the amount of qualified wages taken into account per employee to $10,000 for the year, and the HEALS Act increases the limitation on qualified wages taken into account per employee to $10,000 per quarter (limited to $30,000 for the calendar year).
The bill also enhances coordination between the credit and the Paycheck Protection Program by allowing employers to be eligible for both programs, but with limitations to prevent overlapping benefits.
In order to qualify, entities must have made reasonable efforts to comply with applicable public health guidelines and must not engage in willful misconduct or grossly negligent behavior.
These protections would apply to personal injury lawsuits stemming from actual exposure to coronavirus as well as feared or potential exposure. Nuisance claims will also be covered.
Covers coronavirus-related exposure injuries that take place between Dec. 1, 2019 and Oct. 1, 2024.
Notably, the bill does not fix the Paycheck Protection Program tax deductibility issue. ABC has pushed for this change repeatedly since the IRS’s guidance excluded the ability of small businesses to deduct eligible expenses paid with a forgiven PPP loan from their taxes. “Without this relief, millions of small businesses will face significant tax liabilities,” ABC and other business organizations said in a letter to Congressional leaders earlier this month. Treasury Secretary Steven Mnuchin has consistently objected to a fix for this critical issue, defending the IRS guidance and stating that tax deductibility of PPP loans would be “double dipping” into the program. The fix authored by Sen. John Cornyn (R-Texas) was excluded from the final package due to objections from the White House and Treasury.
Continuing the Paycheck Protection Program, the proposal provides $190 billion of committed and appropriated funds to support PPP and PPP Second Draw Loans. It also defines eligibility for PPP Second Draw loans as meeting the SBA’s revenue size standard, employing 300 or fewer employees and demonstrating at least a 50% reduction in gross revenues. Critics have said the restriction would leave too many struggling yet viable employers on the sidelines while putting too much emphasis on businesses on the brink of failure. You can read a section-by-section summary of the provisions here.
The proposal also includes a second $1,200 direct payment to Americans. Under the plan, people earning up to $75,000 can receive the full amount. Dependents, regardless of age, also qualify for $500, expanding the range of people that qualify for cash compared to the initial wave of stimulus checks that left out many adult dependents and college students. The payments phase out for single-filers earning above $99,000 and joint-filers with no children earning more than $198,000. The plan also calls for the reduction in increased federal unemployment benefits from $600 to $200 per week for a 60-day period, or until states are able to provide a 70% wage replacement. More information on these provisions and other critical tax provisions in the bill can be found here.
The GOP package also provides additional flexibility for the $150 billion in state funds provided under the CARES Act and extends the time frame under which that money can be used. The bill includes $16 billion in new money for expanding state testing capacity—on top of $9 billion that hasn’t been spent yet, $26 billion for the development and distribution of vaccines, $105 billion to help schools reopen, $20 billion to assist farmers and ranchers and close to $30 billion to “bolster the U.S. defense industrial base.” You can view more information on the emergency funding here.
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As many as 31 states and the District of Columbia now mandate the use of facial coverings in public in some form as new infections have surged across the United States in recent weeks. Some states, such as North Carolina and New Jersey, specifically mention the construction industry in their executive orders and require compliance with the order both by workers and jobsite visitors. Additionally, a number of cities in states without a statewide mask mandate have issued their own requirements for individuals to wear facial coverings in public. In some places, such as Texas, counties with minimal cases are exempt from the order.
This comprehensive list outlines facial covering mandates from state to state, including the various requirements for residents, businesses and employees of those businesses. While nearly every state, with the exception of Iowa and South Dakota, require certain businesses to comply with mask orders, the recent trend has been to expand these requirements to all citizens out in public, with the exception of some activities such as vigorous exercise.
In terms of federal guidance, OSHA has these existing guidelines for the construction industry, which includes guidance around facial coverings and all OSHA requirements regarding respiratory protection and other PPE. ABC contractors and member companies may also consult their local ABC chapter for assistance with state and local facial covering requirements.
For the latest guidance and updates on the coronavirus, visit abc.org/coronavirus.
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On July 15, Virginia became the first state in the nation to enact an Emergency Temporary Standard to address the COVID-19 pandemic. The ETS will go into effect at the end of July.
All employers in Virginia will have to comply with a variety of requirements, and employers with higher exposure risk scenarios will be faced with additional mandates. To help prepare employers for compliance, ABC general counsel Littler Mendelson P.C. published an article detailing certain mandatory requirements in the ETS that all employers in Virginia are required to follow, including:
The Littler article also states that Virginia employers should consult with their attorneys to determine how the ETS applies to them, what requirements they must meet and how to implement these requirements. Read the full article here.
In the construction sector, even without a COVID-19 outbreak, safety and health is always our No. 1 priority. As representatives of residential, nonresidential and industrial construction contractors across the country, we remain committed to collaborating with state and local health officials, as well as across market sectors, to diligently identify and implement new health and safety protocols on our jobsites to protect construction employees amid the COVID-19 outbreak.
On June 22, ABC, as a member of the Construction Industry Safety Coalition, submitted comments to the Virginia Department of Labor and Industry’s on the Emergency Temporary Standard/Emergency Regulation, Infectious Disease Prevention. In the comments, CISC stated it had concerns with the standard as it includes a wide range of mandates that would be broadly applicable to all industries. Specifically, the CISC comments stated:
“The CISC does not believe that evidence supports application of such a wide range of requirements to the construction industry, which has already taken strides to address COVID-19. The standard also does not account for the unique nature of construction work and, as a result, we believe will not be effective in construction in minimizing the risk of COVID-19. The recommended standard also does not take into account the changing public health recommendations of the Centers for Disease Control and Prevention and other public health agencies, essentially setting requirements ‘in stone’ and not allowing for flexibility of compliance. Finally, the extensive requirements go well beyond the mandate for the rule established by Gov. Ralph Northam and would include provisions that are not at all necessary to address the virus. The CISC requests that the DOLI rethink its approach to the recommended standard to ensure that employers and employees are protected and that the rule can be effectively implemented.”
Read CISC’s full comments here.
Additionally, on May 18, 2020, the AFL-CIO petitioned the U.S. Court of Appeals for the D.C. Circuit asking the court to order OSHA to issue an emergency temporary standard applicable to COVID-19. ABC filed an amicus brief opposing the petition and was gratified when the appeals court rejected the union’s petition on June 11, 2020. The AFL-CIO has petitioned for rehearing by the full appeals court, so the matter remains pending. Read ABC’s statement here.
ABC will continue to update members on Virginia’s ETS as well as several other states considering similar measures in Newsline.
This article is intended for informational purposes only and does not constitute legal advice or opinion.
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