On March 8, the U.S. District Court for the Eastern District of Texas vacated the National Labor Relations Board’s 2023 Joint Employer Final Rule and the Board’s rescission of the ABC-supported 2020 Joint Employer Final Rule. Under the court’s decision, the 2020 final rule, which provides clear criteria for companies to apply when determining their joint employer status, remains in effect today. ABC opposed the 2023 final rule, which was scheduled to go into effect on March 11. According to a NLRB press release, “The Agency is reviewing the decision and actively considering next steps in this case.” To learn more about the federal court’s decision, read ABC general counsel’s Littler Mendelson’s analysis.

Following the decision, ABC issued a press release, stating:

“We are pleased the court has blocked the NLRB’s radical and overbroad joint employer standard, which would have disrupted long-established, efficient operational processes that are followed by construction service providers who work together to build America,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Under the 2023 final rule, contractors would be vulnerable to increased liability and risk, making them less likely to hire subcontractors, most of which are small businesses. The rule clearly would have had a harmful effect on a significant segment of the construction industry: small businesses.

“By reinstating the 2020 final rule, contractors will be better able to work and coordinate with multiple employers without fear of being unexpectedly and unfairly found to be joint employers,” said Brubeck.

On Nov. 9, 2023, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit challenging the NLRB’s final rule for violating the National Labor Relations Act and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act. On Feb. 22, 2024, the judge in the case delayed the final rule’s effective date from Feb. 26 to March 11. The 2023 final rule rescinded the ABC-supported 2020 NLRB joint employer final rule.

Please continue to monitor Newsline for updates on the lawsuit. 

On March 14, the ABC-led Coalition for a Democratic Workplace sent a letter to the leaders of key subcommittees in the U.S. House and U.S. Senate urging them to protect secret ballots in union representation elections.

The coalition said the U.S. House and Senate Appropriations Subcommittees on Labor, Health and Human Services, Education, and Related Agencies should maintain a bipartisan policy rider that prohibits the National Labor Relations Board from implementing electronic voting in union elections. 

“Congress, the NLRB, federal courts and stakeholders have all recognized that secret ballots in union representation elections are the best means for ensuring workers can freely vote their conscience and for guaranteeing secure and credible elections,” said Kristen Swearingen, chair of CDW and ABC vice president of legislative & political affairs, in a statement.

“Electronic voting, on the other hand, would break with NLRB precedent, increase the risk of coercion and fraud in representation elections and waste the NLRB’s limited resources,” said Swearingen.

The coalition also urged Congress to use the appropriations process to rein in the NLRB’s behavior and condition increases to NLRB funding on additional riders that limit expansion of its authority.

The letter comes in response to several House Democrats and President Joe Biden requesting the rider be eliminated in the FY 25 labor appropriations package.

US Department of Homeland Security Updates Immigration-Related Forms, Fees and Penalties

For 2024, employers should be aware of changes at the U.S. Department of Homeland Security relating to immigration and employment. Specifically, U.S. Citizenship and Immigration Services has updated employment-based visa request forms and fees, while penalties administered by Immigration and Customs Enforcement increased in compliance with the Federal Civil Penalties Inflation Adjustment Act of 2015.

USCIS Publishes New Forms and Fees Effective April 1

On Jan. 30, the U.S. Citizenship and Immigration Services issued a final rule to adjust certain immigration and naturalization benefit request fees for the first time since 2016. The new fees under the final rule will go into effect on April 1. According to the press release, the USCIS encourages stakeholders to visit the Frequently Asked Questions page on its website to view a full list of the revised forms that will go into effect on April 1, along with the new fees. For more information on USCIS and its programs, please visit uscis.gov.

Immigration-Related Penalties Increase in 2024

On Feb. 13, Immigration and Customs Enforcement began assessing increased penalties for employment-related violations as required by the Federal Civil Penalties Inflation Adjustment Act of 2015, which mandates penalties adjust with inflation. ABC General Counsel Littler Mendelson published an analysis of the penalty increases and  recommends “all employers to pay careful attention to their I-9 forms and strongly consider conducting an internal I-9 audit in order to remediate, as much as possible, the I-9 errors.” Employers are advised to contact their immigration or employment counsel with questions.

On April 30, the U.S. Equal Employment Opportunity Commission will begin accepting 2023 EEO-1 Component 1 reports. According to the EEOC, “The EEO-1 Component 1 report is a mandatory annual data collection that requires all private sector employers with 100 or more employees, and federal contractors with 50 or more employees meeting certain criteria, to submit workforce demographic data, including data by job category and sex and race or ethnicity, to the EEOC.”

The deadline to file the 2023 EEO-1 Component 1 report is June 4.

The EEOC has created an online Filer Support Message Center (i.e., filer help desk) to “assist filers with any questions they may have regarding the 2023 collection.” Filers may also refer to the 2023 EEO-1 Component 1 Instruction Booklet.

All updates about the 2023 EEO-1 Component 1 data collection will be posted to www.eeocdata.org/eeo1 as they become available. 

Learn more about the EEOC.

On March 1, 2024, a federal judge ruled that the Corporate Transparency Act is unconstitutional, marking a milestone in the 16-month ongoing legal battle led by the National Small Business Association and supported by the S-Corporation Associates of America and the members of the Main Street Employers Coalition, including ABC.

Importantly, according to a statement from FinCEN, the decision is limited at the moment to the plaintiffs—members of the National Small Business Association, a national association with 65,000 members. Given the narrow exemptions for NSBA members, unless the Treasury Department suspends enforcement of CTA for all businesses that are obligated to file, CTA beneficial ownership reports will still need to be filed.

However, the ruling is sure to set the stage for an elevated judicial battle over the CTA. Already, on March 11, the Department of Justice filed a notice of appeal on behalf of Treasury. Given the high level of uncertainty following the ruling, there is a chance for a stay in the law’s implementation until the 11th Circuit has a chance to rule or a stay pending appeal of the ruling.

For now, ABC urges members and small business owners to continue to review the ruling with counsel to assess its implications. In the meantime, ABC will seek delay and repeal of the law and provide updates to ABC members on the legal challenges.

Background on the Corporate Transparency Act

On Jan. 1, 2021, Congress enacted into law the Corporate Transparency Act, which establishes a new framework for the reporting, maintenance and disclosure of beneficial ownership information in order to better enable critical national security, intelligence and law enforcement efforts to counter money laundering, the financing of terrorism and other illicit activity, among other items.

ABC, along with a coalition of small business organizations, submitted a letter to congressional leadership expressing concerns on the amendments incorporating the CTA into the 2021 National Defense Authorization Act, stating the enactment of the CTA would decrease privacy protections and slow the economic recovery of Main Street.

ABC responded to the U.S. Department of Treasury’s Financial Crimes Enforcement Network notice of proposed rulemaking seeking public input on how best to implement the reporting requirements of the CTA, as well as the CTA’s provisions regarding FinCEN's maintenance and disclosure of reported information in comments. In summary, ABC’s comments noted that the framework prescribed by the CTA will require millions of small businesses, including nearly every employer with 20 or fewer employees, to report to FinCEN certain personal information of their beneficial owners and update that information periodically throughout the life of the business.

ABC also argued that America’s small businesses—which include most of ABC’s members—are typically not staffed or well-equipped to understand and comply with reporting obligations similar to those under the CTA. However, per the CTA, failure to comply can result in significant fines and imprisonment for these small business owners.

ABC, S-Corp and Main Street Employers supported a legal challenge filed by the National Small Business Association, alleging that the CTA violates a laundry list of constitutional protections. In the decision issued on March 1, Judge Liles C. Burke for the Northern District of Alabama Northeastern Division outlined many of the same arguments, saying:

“This case presents a deceptively simple question: Does the Constitution give Congress the power to regulate those millions of entities and their stakeholders the moment they obtain a formal corporate status from a State? The Government thinks so. While it acknowledges that Congress “can exercise only the powers granted to it,” the Government says that the CTA is within Congress’ broad powers to regulate commerce, oversee foreign affairs and national security, and impose taxes and related regulations. The Government’s arguments are not supported by precedent. Because the CTA exceeds the Constitution’s limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress’ policy goals, the Plaintiffs are entitled to judgment as a matter of law. As a result, the Court grants the Plaintiffs’ motion for summary judgment and denies the Government’s motion to dismiss and alternative cross-motion for summary judgment.”

ABC will continue to track this ongoing issue in the Beltway Blueprint and Newsline.

On March 6, Vice President Kamala Karris and U.S. Department of Labor Acting Secretary Julie Su announced in Madison, Wisconsin, President Joe Biden’s new Executive Order on Scaling and Expanding the Use of Registered Apprenticeships in Industries and the Federal Government and Promoting Labor-Management Forums with the stated goal of expanding the usage of government-registered apprenticeship programs by the federal government.

The order directs federal agencies to identify where they can implement new requirements or incentives for federal contractors and recipients of federal financial assistance to employ workers who are active participants or graduates of a GRAP.

While specific details on how these new requirements will be implemented are not yet available until a rulemaking is completed, in a March 6 statement ABC expressed concerns that any new mandates or incentives on federal contracts and grants will reduce competition from contractors that choose not to participate in the GRAP system or lack access to these programs.

Additionally, given that 69% of all GRAP participants are in union-affiliated programs, ABC is concerned that this is another method for the Biden administration to unfairly steer taxpayer-funded contracts to unionized contractors and labor, rather than allowing fair and open competition by all contractors.

ABC supports GRAPS and offers more than 450 such education programs through ABC chapters across the country as part of its all-of-the-above approach to meet the workforce needs of the construction industry. However, ABC’s analysis of DOL data confirmed that GRAPs are unable to meet construction industry workforce needs on their own.

The EO also increases concerns regarding a Jan. 17, 2024, U.S. Department of Labor proposed rule that would make significant and controversial revisions to the National Apprenticeship System. Results from ABC’s February 2024 survey of contractors and ABC chapter GRAP providers confirmed that the proposed rule would strongly discourage GRAP participation, with 96% of respondents stating new recordkeeping and reporting requirements will make them less likely to participate in or start their own GRAP.  ABC recently launched an action alert via ABC’s Action Center and app that stakeholders can use to oppose this costly new rule by the DOL’s March 18 comment deadline.

On Jan. 17, 2024, the U.S. Department of Labor published a proposed rule that would make significant and controversial revisions to the National Apprenticeship System, which will affect ABC members, chapters, apprentices and other industry stakeholders participating in government-registered apprenticeship programs. Take action now by submitting comments through ABC’s Action Center and app to tell the DOL to withdraw or improve this costly new rule!

ABC supports government-registered apprenticeship programs and offers more than 450 such education programs across the country as part of its all-of-the-above approach to meet the workforce needs of the construction industry. Unfortunately, the proposed rule implements dozens of burdensome and costly new recordkeeping requirements and reduces flexibility for GRAP sponsors and employers that will only exacerbate the construction industry’s workforce shortage.

Results from ABC’s February 2024 survey confirmed that the proposed rule would strongly discourage GRAP participation, with 96% of respondents stating new recordkeeping and reporting requirements will make them less likely to participate in or start their own GRAP. Further, ABC’s analysis of DOL data confirmed that GRAPs are already not keeping up with construction industry workforce needs.

For more information on the proposed rule, see ABC’s Newsline article.

ABC is available to help members and chapters interested in submitting more detailed comments to the DOL, prior to the proposal’s March 18 comment deadline.

Please reach out to Michael Altman at [email protected] to receive a customizable template and instructions on how to submit comments.

On March 5, ABC, its Southeast Texas chapter, the Coalition for Workforce Innovation, the Financial Services Institute, the American Trucking Associations, the U.S. Chamber of Commerce, the National Retail Federation and the National Federation of Independent Business filed an amended complaint in the U.S. District Court for the Eastern District of Texas arguing that the U.S. Department of Labor’s Employee or Independent Contractor Classification Under the Fair Labor Standards Act final rule is unlawful and a violation of the Administrative Procedure Act. The district court will review the complaint and response from the U.S. Department of Justice. The final rule goes into effect on March 11. 

“The 2024 final independent contractor rule is confusing, vague and unworkable, and will harm construction workers classified as independent contractors because they will lose crucial opportunities for work. Further, the difficult-to-interpret standards in this final rule strip independent contractors of basic freedoms and rights to choose how they work. Replacing the commonsense 2021 final rule was the wrong move by the U.S. Department of Labor and has created an ambiguous standard for determining employee or independent contractor status under the Fair Labor Standards Act,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. Read the business coalition’s statement.

Separately, on March 6, ABC sent a letter to Congress urging members to pass a Congressional Review Act resolution to nullify the U independent contractor final rule.

On Jan. 9, the DOL announced the final rule on Employee or Independent Contractor Classification Under the Fair Labor Standards Act, which rescinds the ABC-supported 2021 final rule and replaces it with a confusing multifactor analysis to determine whether a worker is an employee or an independent contractor. Learn more about the 2024 final rule. Also, watch the ABC-members only archived webinar in the Academy, "Learn What the DOL's Final Independent Contractor Rule Means for ABC Members."

Continue to monitor ABC Newsline for updates.

On March 1, the U.S. Department of Labor sent its Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees final rule to the Office of Information and Regulatory Affairs at the Office of Management and Budget for final review. The rule would alter overtime regulations under the Fair Labor Standards Act. The review at the OIRA is usually the final step in the process before a rule is officially published in the Federal Register. ABC will be meeting with the OIRA to express its serious concerns about the rule.

On Nov. 7, 2023, ABC submitted comments to the DOL in opposition to the proposed overtime rulemaking, which would increase the minimum salary threshold for exemption by nearly 70%, from the current $35,568 annual salary level to $60,209 annually. The DOL also proposes to significantly raise the total annual compensation needed to qualify for exemption under the streamlined test for highly compensated employees from the current total annual compensation of $107,432 to $143,988. Finally, the DOL proposes to automatically update the standard salary level and the HCE total annual compensation threshold every three years.

ABC issued a press release stating, “ABC called on the DOL to withdraw the new proposed rule, which is unlawful, inconsistent with historic norms and will specifically harm small businesses,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “ABC has consistently told the DOL that there is no compelling reason for an adjustment to the minimum salary threshold for exemption since it was increased roughly four years ago. Most importantly, the DOL should recognize that the construction industry, as well as multiple other industries, is currently up against increased geopolitical uncertainty, high materials prices, inflationary pressures and workforce shortages. Specifically, ABC estimates that the construction industry needs to hire more than half a million workers in 2023 alone. Regrettably, the DOL’s proposed salary level increase will further complicate the current economic outlook.” 

As a steering committee member of the Partnership to Protect Workplace Opportunity, ABC also signed onto coalition comments criticizing the overtime proposed rule, joining 244 national, state and local organizations representing employers from a wide range of private industry and public, nonprofit and education sectors. The PPWO also created a grassroots toolkit for members to respond to the DOL’s overtime proposed rule.

My journey in the field of construction management began at Montgomery College in Maryland, where I made the decision to pursue this career path out of curiosity for the program and looking for promising career opportunities. With no prior experience in the industry, I was eager to broaden my horizons and gain more exposure. That’s when I became a member of the Student Construction Association and, as an officer, I was able to connect with ABC through its student chapter.

This decision proved to be transformative. It opened numerous doors for me, including the prestigious ABC Virginia and ABC Metro Washington Scholarships, which I was fortunate to receive in 2022 and 2023.

I realized that I needed to get more involved in construction before earning my degree, and to understand what the day to day was like. I applied to multiple companies, until I was hired by a flooring subcontractor in Silver Spring, Maryland, in 2022. I left my position as personal banker at a bank and took the risk of starting in a new field. I soon began to recognize the immense growth potential in construction. I started as a project coordinator and learned how to communicate with general contractors, process all the data, purchase orders and everything else necessary on the administrative side to deliver projects. To this date, I consider that career move to be the best risk I have taken.

Just six months later, I embarked on a new journey, this time with Henley Construction, transitioning from subcontractor work to joining a general contractor. Now, I have been with them for over a year as a field engineer, working on public schools in Montgomery and Fairfax counties. I assist the project manager and superintendent with all documentation throughout the project, and communicate with the owner, design team and subcontractors by doing such things as staying on site for supervision and coordination. I consider myself very fortunate to have the opportunity to wear different hats at Henley, which has allowed me to learn and grow immensely. This transition marked not only my evolution from being a student to a working professional in the industry, but also the beginning of my service on the Workforce Development Committee of ABC Metro Washington.

The past two years have been a testament to growth and engagement for me, as I’ve built valuable connections and dedicated my efforts to assisting students who are treading a similar path toward connecting with the workforce. I am immensely grateful for the opportunities that have come my way, especially for the unwavering support and sense of belonging that ABC Metro Washington has provided. It truly feels like being part of a larger family, and I am excited to continue my journey in the industry with their guidance and support.

Nathalia Marcano