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Throughout 2023, the Biden administration has pushed to roll back Trump-era initiatives and institute new, pro-union policies that challenge ABC members’ ability to win work. ABC continues to fight against these proposed rules and regulations affecting merit shop contractors and advocate for open competition and free enterprise.
ABC’s Regulatory Roundup is updated on a regular basis and includes information about federal regulations, guidance and compliance materials from the U.S. Department of Labor, U.S. Department of the Treasury, Federal Acquisition Regulation Council, National Labor Relations Board, Federal Trade Commission, Environmental Protection Agency and Council on Environmental Quality.
Read ABC’s December Regulatory Roundup to learn more about the latest developments affecting the construction industry.
Reports indicate that not a single electric vehicle charging station has been constructed with the $7.5 billion in federal investment available through the Federal Highway Administration’s National Electric Vehicle Infrastructure Formula Program, threatening the Biden administration’s goal to build 500,000 EV chargers by 2030. The final rule implementing the NEVI Formula Program contained a number of ABC-opposed, union-favoring labor requirements that may be contributing to the program’s stagnation.
The NEVI Formula Program is intended to implement provisions of the Infrastructure Investment and Jobs Act, signed into law in 2021, that dedicated $7.5 billion for electric vehicle charging stations. The program’s goal is to support the installation of electric vehicle chargers across the country as part of a domestic push to shift away from gas-powered vehicles.
In order to receive NEVI program funding, EV charging station developers are required to ensure that all electricians working on electric vehicle supply equipment projects either be certified by the International Brotherhood of Electrical Workers’ Electric Vehicle Industry Training Program or be a graduate or recipient of a continuing education certificate from a government-registered apprenticeship program with a focus on EVSE installation approved by the U.S. Department of Labor in consultation with the FHWA. To date, ABC is not aware of any such programs approved by the DOL and FHWA.
Additionally, the rule requires all NEVI-funded projects that require more than one electrician to use at least one GRAP-enrolled apprentice. Finally, other on-site, nonelectrical workers directly involved in the installation, operation and maintenance of chargers must have graduated from a GRAP or have appropriate licenses, certifications and training as required by the state.
ABC submitted comments in response to both the proposed rule and a request for information strongly urging the FHWA to avoid union labor requirements and to instead welcome all qualified contractors to build EV chargers. Unfortunately, the agency disregarded these recommendations in the final rule.
Under the IIJA, the NEVI funds are administered by states, which can contract out the construction and operation of the charging stations to private companies. So far, every state has taken the initial steps to receive the NEVI cash by submitting a plan to the Joint Office in 2022 and an update in 2023. But if a governor were to reject the funds, municipalities could apply to administer the funds instead.
According to a Politico article, Ohio was the first state to break ground on the nation’s first charger funded by the NEVI program in October. Following Ohio, Pennsylvania also broke ground on its first NEVI-funded charger in November. Another six states have awarded contracts for their first round of charging sites, while 15 states and Puerto Rico are in the process of soliciting bids from the private sector.
But 27 states and the District of Columbia have yet to even start soliciting bids, and some states like Missouri indicate they may not post their solicitation until 2025. (Three of those states—Nevada, New York and Vermont—are procuring some federally funded chargers outside of a public request for bids, but plan to solicit bids in the future.)
Even some states with high rates of EV adoption, like California and Washington, have yet to award any of their funds.
In a June study, the National Renewable Energy Laboratory projected the United States will need 1.2 million public chargers by 2030 to meet charging demand, including 182,000 fast chargers.
In response to unfavorable coverage about the NEVI program’s lack of progress, White House officials maintained that the administration is making progress and is on track to meet their EV charging station goals.
If you are an ABC member, perform EV charging station construction and have a story to share about your experience with projects subject to NEVI funding and regulations, please contact Michael Altman at [email protected].
On Nov. 22, the Federal Highway Administration released its Greenhouse Gas Performance Measure final rule.
The final rule requires that state departments of transportation and metropolitan planning organizations—the state entities responsible for transportation infrastructure construction and maintenance—must measure and report GHG emissions associated with transportation. Further, state DOTs and MPOs must set targets for reducing carbon dioxide emission and report on progress toward these targets. The rule does not mandate particular targets, allowing states to set their own targets as long as they achieve some amount of emission reduction.
Depending on how state DOTs and MPOs implement their emission reduction targets, certain transportation projects such as roadways and bridges could be delayed as the agencies seek to achieve GHG emission goals. ABC will continue to monitor the impact of this rule as state DOTs and MPOs move forward with implementation.
The key components of the STEP Safety Management System work synergistically to build an effective safety culture. Beyond responsibilities, resources and rules are imperative. All three “Rs” work together and missing just one sets a company up for potential failure.
There is one additional “R” that affects the equation: relationships. Safety is all about relationships and planning, and planning requires logical allocation of resources following a specific set of rules.
You must allocate resources for safety during the planning phase of a project. Waiting too long will cause insurmountable issues during later phases and jeopardize employee health and project viability. When resources are lacking, leaders must be willing to immediately stop, reevaluate and move forward after enacting a plan utilizing sufficient resources to mitigate identified and potential hazards.
Success in Safety = Responsibilities Explained + Rules Understood + Resources Allocated + Robust Relationships
Trailing indicators are metrics used to measure past safety performance and are usually based on a calendar or policy year. Two traditional trailing indicators for safety are Total Recordable Incident Rate and Days Away, Restricted or Transferred rate. Both TRIR and DART are compiled using the formula from the OSHA 300 form. These are expressed in the number of incidents per 100 employees. Additionally, your insurance broker can provide you with your Experience Modification Rate, which is another commonly used trailing indicator. Trailing indicators are like the final score of a game: They tell you results, and you can study them when planning for future improvement.
To be more effective, find other metrics that can be expressed in terms that are meaningful to people outside of the safety department. For example, if you’re a concrete company, workers’ comp costs per 100 cubic yards of concrete might make sense, or workers’ comp costs per $100 of payroll may resonate as well. Listen to your executives and front-line workforce and learn to speak their language to build those robust relationships to make your company safer for everyone.
Looking for help building your safety program?
Discover resources available through ABC’s STEP Safety Management System and other health and safety topics at abc.org/safety.
For more information or assistance, please reach out to Joe Xavier or Aaron Braun.
Throughout 2023, ABC has been closely monitoring federal regulatory actions and updating ABC members through the ABC Regulatory Roundup. Several federal rules have gone into effect or are scheduled to go into effect in the near future.
See the below list to learn more about important compliance dates.
NLRB’s Joint Employer Final Rule
On Oct. 27, the National Labor Relations Board published its final rule on Joint Employer Status Under the National Labor Relations Act, which takes an ax to the ABC-supported 2020 NLRB joint employer final rule, which provided clear criteria for companies to apply when determining status. On Nov. 16, the NLRB extended the effective date of its final rule from Dec. 26 to Feb. 26, 2024. The new standard will only be applied to cases filed after the rule becomes effective.
On Nov. 9, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit challenging the NLRB’s Joint Employer Final Rule for violating the National Labor Relations Act and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act. Read more about the final rule.
OSHA’s Improve Tracking of Workplace Injuries and Illnesses Final Rule
On July 21, 2023, the U.S. Department of Labor’s Occupational Safety and Health Administration issued its Improve Tracking of Workplace Injuries and Illnesses final rule, which will undo the ABC-supported provisions of the 2019 final rule promulgated under the Trump administration and reprise the 2016 Obama-era rule. The final rule becomes effective on Jan. 1, 2024, for certain employers and OSHA intends to make much of the data it collects publicly available online. Read more about the final rule.
NLRB ‘Ambush’ Election Final Rule
Despite years of litigation, the Biden administration’s NLRB has revived a controversial policy from the Obama era in the form of its Representation-Case Procedures final rule. The direct final rule, issued without notice or the opportunity to comment, essentially restores provisions of the “ambush” election rule of 2014 and rescinds the remaining ABC-supported provisions of the 2019 final rule. The rule will apply to representation petitions filed on or after Dec. 26, 2023, and employers will have less time to respond to representation petitions. Read more about the final rule.
DOL’s Updating the Davis-Bacon and Related Acts Regulations Final Rule
On Aug. 23, the U.S. Department of Labor officially published its final rule, Updating the Davis-Bacon and Related Acts Regulations, in the Federal Register. The regulation’s drastic revisions to existing rules regarding government-determined prevailing wage rates that must be paid to construction workers on federal and federally assisted construction projects funded by taxpayers took effect on Oct. 23.
On Nov. 7, ABC and its Southeast Texas chapter announced the filing of a complaint in the U.S. District Court for the Eastern District of Texas, challenging the controversial final rule. Read more about the final rule.
DOL’s Form LM-10 Employer Report Final Rule
On July 28, the DOL’s Office of Labor-Management Standards published its final revision to the Form LM-10 Employer Report, which adds a checkbox to the Form LM-10 report requiring certain reporting entities to indicate whether such entities were federal contractors or subcontractors in their prior fiscal year, and two lines for entry of filers’ unique entity identifier and federal contracting agency or agencies, if applicable. The revision is effective for reports filed on or after Aug. 28, 2023. Read more about the final rule.
EPA and Army Corps Revised Definition of WOTUS
On Aug. 29, the U.S. Environmental Protection Agency and Army Corps of Engineers issued a final rule regarding amendments to the definition of “waters of the United States” subject to Clean Water Act regulation. This rule is aimed at bringing the January 2023 WOTUS final rule into compliance with the U.S. Supreme Court’s May 25 decision in Sackett v. Environmental Protection Agency.
The final rule took effect on Sept. 8, 2023, except in states where it has been blocked by a federal court. EPA has provided information on the litigation and a map of impacted states. Read more about the final rule.
Treasury/IRS Inflation Reduction Act Prevailing Wage and Apprenticeship Requirements
The Inflation Reduction Act was signed into law on Aug. 16, 2022, and provides over $270 billion in tax incentives for the construction of energy projects, conditioned on requirements that contractors meet prevailing wage and government-registered apprenticeship requirements.
Following guidance issued in Nov. 2022, these requirements took effect for projects beginning on or after Jan. 30, 2023. On Aug. 29, Treasury issued a proposed rule to provide additional guidance on the requirements. The proposed rule states that taxpayers may now rely on it for guidance regarding IRA tax incentives, until a final rule is published and takes effect. Resources and guidance on the IRA are available on ABC’s website.
CEQ Phase I National Environmental Policy Act Implementation Revisions
On April 19, 2022 the Council on Environmental Quality announced its final rule revising the implementation regulations of the National Environmental Policy Act. The rule reversed elements of the ABC-supported 2020 final rule that modernized and streamlined the federal environmental review process.
While the rule took effect on May 20, 2022, federal agencies were given until Sept. 14, 2023, to incorporate the revisions into their environmental review processes. Read more about the final rule here.
Working for more than 50 years at TDIndustries of Dallas in various roles, Houston is also licensed as a professional engineer and air conditioning contractor. Houston also carries master plumbing and master electrician licenses in Texas. Highlighted projects of his career include AT&T Stadium in Arlington, Texas, and the 60-story Bank of America Building in Charlotte, North Carolina, the tallest building in the state.
In addition to playing an instrumental role in industry-leading projects, Houston remains active in TEXO, his local ABC chapter, and along with his wife, Sally Houston, has sponsored scholarships at the School of Mechanical Engineering at the University of Texas at Austin.
On Nov. 15, Rep. Lloyd Smucker, R-Pa., introduced a resolution (H.J. Res.103) under the Congressional Review Act providing for congressional disapproval of the U.S. Department of Labor’s final rule, Updating Davis-Bacon and Related Acts Regulations. This controversial final rule largely disregards the feedback of ABC, construction industry stakeholders and thousands of small businesses urging the withdrawal of––and/or improvements to––this unnecessary, costly and burdensome regulation.
Smucker’s Nov. 20 press release promoting the CRA highlights opposition from lawmakers, taxpayer watchdogs and dozens of construction industry groups to the Biden administration’s final rule, which makes radical revisions to regulations implementing the Davis-Bacon Act and Related Acts that apply to federal and federally assisted construction projects funded by taxpayers and procured by government and private owners.
“The Wage and Hour Division’s Davis-Bacon rule is a complete giveaway to union bosses,” said Education and the Workforce Committee Chairwoman Virginia Foxx, R-N.C. “This rule dims America’s infrastructure outlook by increasing costs for federal construction projects and imposing a massive financial burden on taxpayers. I commend Rep. Smucker for leading a CRA resolution to block this harmful rule and the Biden administration’s bureaucratic overreach.”
An ABC-led construction industry coalition letter expressed support for Rep. Smucker’s CRA, because “onerous new requirements and artificial inflation of construction costs imposed by this new Davis-Bacon Act rule will only exacerbate [economic headwinds facing the construction industry] and undermine taxpayer investments in much-needed infrastructure.”
Instead, the DOL is moving forward with dramatic changes to Davis-Bacon Act regulations, reversing much-needed reforms that were established by the Reagan administration and unlawfully increasing the regulatory burden on small businesses, new industries and critical public works projects.
The final rule was published in the Federal Register on Aug. 23, 2023, and became effective on Oct. 23, 2023. Therefore, construction contracts executed after this date are subject to the new rule. In addition, the DOL will begin implementing the final rule’s ill-advised changes to its broken and convoluted wage determination process that are likely to make government-determined wages inaccurate and less reflective of a local prevailing wage.
On Nov. 7, ABC and the ABC Southeast Texas chapter filed a lawsuit in the U.S. District Court for the Eastern District of Texas challenging numerous aspects of the DOL’s inflationary and anti-competitive final rule.
As outlined in ABC’s Aug. 31 op-ed published in The Hill opposing the Biden DOL rule, litigation appears to be the best short-term strategy to defeat or delay some or all aspects of the rule until a pro-free enterprise White House can reverse this policy.
Unfortunately, a Sept. 6 letter to Acting DOL Secretary Julie Su signed by 13 House Republicans expressed support for the DOL’s new regulation.
ABC has issued a targeted grassroots alert asking ABC members to contact lawmakers in support of Rep. Smucker’s CRA and in opposition to the DOL’s final rule as it is unclear if lawmakers understand the radical changes in the final rule.
The CRA requires agencies to report the issuance of “rules” to Congress and provides Congress with special procedures, in the form of a joint resolution of disapproval, under which to consider legislation to overturn rules. If a CRA joint resolution of disapproval is approved by both houses of Congress and signed by the president, or if Congress successfully overrides a presidential veto, the rule at issue cannot go into effect or continue in effect. Rep. Smucker’s CRA is not likely to succeed in the current Congress.
Background on the Davis-Bacon Act
The 1931 Davis-Bacon Act and related regulations require contractors and subcontractors that perform work on federal and federally funded construction projects to pay a government-determined prevailing wage and benefit rate on an hourly basis to on-site construction workers.
According to the DOL rulemaking, the Davis-Bacon Act and 71 active Related Acts collectively apply to an estimated $217 billion in federal and federally assisted construction spending per year—about 63% of all government construction put in place—and provide government-determined wage rates for an estimated 1.2 million U.S. construction workers.
The Biden administration and Congress have recently expanded the application of Davis-Bacon Act prevail wage and benefit requirements onto hundreds of billions of dollars’ worth of private sector clean energy and microchip manufacturing projects that have never been covered by Davis-Bacon regulations. In addition, the rule is expected to inflate costs on hundreds of billions of dollars of new government-financed infrastructure projects funded in part by the Infrastructure Investment and Jobs Act.
Learn more at abc.org/davisbacon.
Congratulations to the 30 ABC members that have been honored by the U.S. Department of Labor with the 2023 HIRE Vets Medallion Award, only federal-level award that recognizes a company or organization’s commitment to veteran hiring, retention and professional development. The members are:
Adaptive Construction Solutions, Houston
Armcorp Construction Inc., Celina, Ohio
Caddell Construction Co. (DE) LLC, Montgomery, Alabama
Carter Machinery Co. Inc., Salem, Virginia
Clarklift of Des Moines Inc., Des Moines, Iowa
Convergint Technologies LLC, Schaumburg, Illinois
Converse Construction Inc., Redding, California
Converse Electric, Grove City, Ohio
Delmarva Veteran Builders LLC, Salisbury Maryland
Diplomat Construction & Demolition Inc., West Chester, Pennsylvania
DVL Group Inc., Bristol, Pennsylvania
Early Services Inc., Decatur, Alabama
EquipmentShare.com, Columbia, Missouri
Foley Inc., Piscataway, New Jersey
Gary R Banks Industrial Group, West Berlin, New Jersey
Herc Rentals, Bonita Springs, Florida
Hudgins Contracting Corp., Hampton, Virginia
Kwest Group LLC, Perrysburg, Ohio
National Native American Construction Inc., Coeur D’Alene, Idaho
NextEra Energy, Juno Beach, Florida
NextOp Inc., Houston
Phillips 66, Houston
Relyant Global LLC, Maryville, Tennessee
SDV Construction Inc., Albuquerque, New Mexico
Sevan Multi-Site Solutions Inc., Downers Grove, Illinois
Silver Mountain Construction LLC, Palmer, Alaska
Southern Co., Atlanta
Trotter Management Services LLC, Schwenksville, Pennsylvania
United Rentals Inc., ABC strategic partner and program sponsor of ABC’s inclusion, diversity and merit initiatives, Stamford, Connecticut
Warfeather, Coweta, Oklahoma
The purpose of the HIRE Vets Medallion Award is to recognize employers that have employed and retained veterans, including their efforts to establish employee development programs for veterans, and employers who offer veteran-specific benefits to improve retention. Award recipients may utilize the medallion in the marketing of their firm as a veteran-friendly business when hiring, and in efforts to attract additional business.
On Nov. 17, Maryland Gov. Wes Moore issued an executive order that requires the consideration of union-favoring project labor agreements on construction contracts procured by state agencies where the state’s financial commitment is $20 million or greater. The EO also includes new community benefit agreements and government-registered apprenticeship policies in addition to troubling pro-PLA language.
ABC stakeholders are concerned this new policy’s pro-PLA language will result in inflated construction costs and reduced competition from more than 90% of Maryland’s construction workforce who choose not to join a union and have successfully built Maryland’s taxpayer-funded construction projects.
The EO was signed at a press conference in Baltimore and was followed by a press release identifying billions of dollars’ worth of Maryland infrastructure projects receiving federal government funding where PLAs will be considered.
On Nov. 13, Gov. Moore stood alongside Biden administration officials and announced his administration’s commitment to “high labor standards” on forthcoming federally assisted construction projects in Maryland:
“In the state of Maryland, we will work with the Biden administration to ensure that federal projects in Baltimore operate under the highest possible labor standards, including the Maryland Department of Transportation’s commitment to labor agreements for a number of strategic projects across the agency portfolio,” said Gov. Moore. “Partnership drives progress and we are going to keep moving in partnership with our friends in the White House, in Congress and with our unions to create good-paying jobs.”
When mandated or given preference on public works projects, PLAs severely restrict opportunities for Maryland’s construction workforce, thus opening the door to out-of-state contractors and employees affiliated with unions taking work from quality large and small Maryland contractors and their experienced construction workforce.
Contractors must negotiate and sign a PLA, which is an agreement with multiple construction trade unions, as a condition of winning a public works contract. Typical PLAs contain provisions that require contractors to hire most or all of their workforce for a project through construction union hiring halls, effectively requiring nonunion companies to forgo their existing Maryland workforce and instead hire unfamiliar workers, the majority of which will be from outside Maryland. Union hiring rules give preference to their members with seniority, regardless of where they are from.
Additionally, every worker, union member or not, is typically required to join a union and/or make contributions to the unions’ training, pension and health care plans, regardless of whether they benefit from the plans or receive duplicative benefits from their current employer. This leads to an estimated wage reduction of 34% for nonunion construction workers. In addition, these requirements effectively prohibit Maryland’s construction firms from competing for these projects, as duplicative benefits costs and union work rules in typical PLAs make them less competitive and also expose firms to future multiemployer pension plan liabilities. When then-candidate Moore toured ABC Greater Baltimore’s multicraft training center in 2022, he acknowledged union-only PLAs can harm local workers, explaining, “I am not going to sign anything that is going to send Maryland jobs to Pennsylvania and New Jersey.
In addition, the EO fails to take into consideration the impact PLAs have on construction costs. Numerous academic studies have compared the impact of affordable housing and school projects built with and without PLA mandates and have found that, on average, government-mandated PLAs increase costs between 12% and 20% compared to projects that are competitively bid through fair and open competition. Unsubstantiated claims that PLAs benefit historically disadvantaged communities and businesses are undermined by strong evidence that this is not the case in many marketplaces and Baltimore’s minority contractors have vocally opposed efforts by City of Baltimore lawmakers to require PLAs on local projects.
ABC Maryland chapters have reached out to the Moore administration seeking clarification about many aspects of this executive order and new policy.
Maryland is 1 of 9 states that have enacted legislation or executive orders strongly encouraging or requiring government-mandated PLAs on state construction projects. In contrast, 25 states have passed laws prohibiting government-mandated PLAs on state, state-assisted and local construction projects to some degree.
Stay tuned for additional information and action items that will help fight for fair and open competition for ABC member businesses and Maryland’s construction workforce on taxpayer-funded infrastructure projects.
On Nov. 13, Associated Builders and Contractors filed comments urging the Occupational Safety and Health Administration to withdraw the Worker Walkaround Representative Designation Process proposed rule, which would allow employees to choose a third-party representative, such as an outside union representative or community organizer, to accompany an OSHA safety inspector into nonunion workplaces during site inspections. ABC also signed on to comments submitted by the Coalition for Workplace Safety and Construction Industry Safety.
“The Biden administration is trying to revive a failed Obama-era initiative, which was bad policy then and is bad policy now,” said Greg Sizemore, ABC vice president of health, safety, environment and workforce development in ABC’s press release about the proposed rule. “This power grab does nothing to promote workplace health and safety, and instead pushes the administration’s ‘all-of-government’ agenda to encourage unions and collective bargaining.
“The potential harm that small construction contractors face here is very high,” said Sizemore. “OSHA can have a bigger impact on jobsite safety by fostering positive partnerships with employers and promoting safety practices that produce results. For example, according to ABC’s 2023 Safety Performance Report, top-performing contractors that participate in ABC’s STEP Safety Management System achieved a 688% improvement in safety performance compared to the U.S. Bureau of Labor Statistics construction industry average in 2022.
“It is especially concerning that the proposed rule fails to provide clarity in a number of key areas,” said Sizemore. “There is no restriction on the number of different third-party representatives who may be present for a single inspection, nor on how many employees may request different representatives. Additionally, the rule fails to provide any safety expertise criteria for the selection of third-party representatives. It also gives no guidance on how OSHA or an inspector should approve these requests or what is ‘reasonably necessary.’
“Unfortunately, this overreach allows anyone and everyone to become an authorized employee representative,” said Sizemore. “By allowing outside union agents access to nonunion employers’ private property, OSHA is injecting itself into labor-management disputes and casting doubt on its status as a neutral enforcer of the law. Not only does the proposed rule negatively impact the rights of employers, but it also ignores the rights of the majority of employees who have not authorized any union to represent them. Likewise, by allowing a nonmajority community organizer to participate in a walkaround, the proposal could distract the OSHA safety inspector from their primary purpose of workplace safety.
“Because the proposed rule has the potential of allowing anyone on the jobsite, construction employers are faced with serious safety concerns,” said Sizemore. “OSHA’s rule poses unnecessary risk to the individual joining the inspection and others on the jobsite if the authorized person is not trained to safely walk a construction jobsite. The rule does not include any requirement that the authorized person be equipped or conduct themselves to the same standards as OSHA safety inspectors. Further, the proposal fails to answer who is legally responsible if the third party gets injured during the inspection or harms someone else.”
Visit ABC’s Regulatory Roundup to learn more about the Worker Walkaround proposed rule.
On Nov. 16, the National Labor Relations Board extended the effective date of its final rule on Joint Employer Status Under the National Labor Relations Act from Dec. 26 to Feb. 26, 2024. The new standard will only be applied to cases filed after the rule becomes effective.
On Nov. 9, 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. The final rule takes an ax to the ABC-supported 2020 NLRB joint employer final rule, which provided clear criteria for companies to apply when determining status.
The NLRB’s new joint employer final rule will disrupt long-established, efficient operational processes followed by construction service providers that work together to build America. As a result of the confusion and policy whiplash caused by this overbroad standard, contractors will be vulnerable to increased liability and risk, making them less likely to hire subcontractors, most of which are small businesses.
On Dec. 7, 2022, ABC submitted comments to the NLRB urging the Board to withdraw the new proposed rule.
Resources:
States across the country held legislative, gubernatorial, local and judicial elections yesterday, as well as considered a variety of hot-button issues on ballot initiatives. In almost every instance, Democrats carried the night, delivering a resounding blow to GOP optimism as focus shifts toward the 2024 elections.
In the most nationally prominent state-level election, for control of Virginia’s legislature under a new legislative map following redistricting, Democrats flipped the House of Delegates, gaining control after just two years of a Republican majority that was won in 2021. Democrats also protected the Senate majority they gained in 2019, dashing pre-election hopes by Republicans to contest tight seats in these newly drawn districts. The GOP message of economic prosperity under Republican Gov. Glenn Youngkin did not resonate well enough with swing voters to protect and advance GOP control of the state.
Democrats, meanwhile, tied GOP candidates to former President Donald Trump and pinned them down on the issue of abortion. Youngkin has two years remaining as governor and cannot seek reelection per state law. Efforts to build on recent economic success through policies focused on jobs, small business and tax reform will meet staunch legislative opposition in the second half of his term. Of note regarding ABC-related issues, upon gaining full control of state government in 2019 for the subsequent two years, Democrats imposed a statewide prevailing wage and repealed the ABC-supported Fair and Open Competition Act that prohibited government-mandated project labor agreements.
In Kentucky, Democrat Gov. Andy Beshear successfully won reelection, even as Kentucky continues to be a GOP stronghold in the state legislature and in statewide federal elections. Notably, the state went for President Trump by a 26-point popular vote margin in the 2020 presidential election, but in nearly all of the past 100 years, only four Kentucky Republicans have been elected as governor, and none went on to win reelection.
New Jersey also held elections for its full legislature, and similarly with a new legislative map following redistricting. Democrats entered the night with full majority control, and GOP efforts focused on continuing to prevent a Democrat supermajority in both chambers with outside hopes of fully capturing one chamber for the first time in 20 years. That hope of flipping control was not realized, and Democrats retained their majority handily, even in seats seen as top-tier targets for GOP donors.
Ohio did not see any elections for state or local office but did pose two hot-button topics to voters in the form of ballot measures: abortion and the legalization of marijuana. The Ohio results follow months of national attention and financial investment by third-party groups, and a feeling that the outcomes would highlight messaging challenges or opportunities for national Republicans and Democrats moving into next year. Voters approved Issue 1 to establish a state constitutional right to abortion by a margin of 56.6% to 43.4%. They also approved Issue 2, the legalization of recreational marijuana, by an almost identical margin.
In Mississippi, Republican incumbent Gov. Tate Reeves won reelection outright with 51.6% of the vote, avoiding a runoff that would have been necessary if he did not clear the 50% threshold.
On Nov. 7, ABC submitted comments to the U.S. Department of Labor in response to a proposed rulemaking that would alter overtime regulations under the Fair Labor Standards Act.
“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.
“Virtually all of ABC’s members employ some workers who qualify for exempt status and the proposed rule will result in large numbers of employees being reclassified as nonexempt,” said Brubeck. “In fact, 63% of ABC members surveyed in October indicated that they would have to consider reclassifying employees as well as restructuring if the salary level is increased to $55,000 annually. This will have a disruptive effect on the construction industry as a whole, as the rule will greatly restrict employee workplace flexibility in setting schedules and hours and hurt career advancement opportunities for employees. Moreover, because the DOL proposes to automatically increase the salary level every three years, these issues will recur repeatedly.
“Additionally, the rule’s proposed significant increase in the salary threshold fails to account for disparate income levels in different regions of the country. This will be particularly true in rural parts of the country and in areas where the cost of living is significantly lower than average.”
The DOL expects the minimum salary threshold will increase to at least $55,068 (annualized) and projects the minimum salary threshold to be $60,209 (annualized) in the first quarter of 2024—an increase of nearly 70% from the current $35,568 salary level.
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.
ABC has prepared a summary of Biden administration regulatory actions of interest to ABC members by agency.
U.S. Department of Labor
Occupational Safety and Health Administration
Improve Tracking of Workplace Injuries and Illnesses
On July 21, 2023, the U.S. Department of Labor’s Occupational Safety and Health Administration issued its Improve Tracking of Workplace Injuries and Illnesses final rule, which will undo the ABC-supported provisions of the 2019 final rule promulgated under the Trump administration and reprise the 2016 Obama-era rule. The final rule becomes effective on Jan. 1, 2024, for certain employers and OSHA intends to make much of the data it collects publicly available online.
In a press release, ABC announced its opposition to the final rule. “Unfortunately, the Biden administration is moving forward with a final rule that does nothing to achieve OSHA’s stated goal of reducing injuries and illnesses,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Instead, the final rule will force employers to disclose sensitive information to the public that can easily be manipulated, mischaracterized and misused for reasons wholly unrelated to safety, as well as subject employers to illegitimate attacks and employees to violations of their privacy.”
What does the final rule do?
In June 2022, ABC submitted comments urging OSHA to withdraw the proposed rule.
Heat Injury and Illness Prevention in Indoor and Outdoor Settings
On Oct. 27, 2021, OSHA issued an Advance Notice of Proposed Rulemaking on Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings, which requested information on how to implement regulations to prevent workers from hazardous heat. ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments in response to the ANPRM on Jan. 26, 2022.
On April 12, 2022, OSHA announced a National Emphasis Program on Outdoor and Indoor Heat-Related Hazards, which sets out a targeted enforcement effort and reiterates OSHA’s compliance assistance and outreach efforts.
On July 27, 2023, OSHA issued a heat hazard alert to remind employers of their obligation to protect workers against heat illness or injury in outdoor and indoor workplaces. The department also announced that OSHA will intensify its enforcement where workers are exposed to heat hazards, with increased inspections in high-risk industries like construction and agriculture. These actions will fully implement the agency’s National Emphasis Program on heat, announced in April 2022, to focus enforcement efforts in geographic areas and industries with the most vulnerable workers.
In September, OSHA held six Small Business Advocacy Review panel (also known as a SBREFA panel) meetings to gather input on a possible Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings rule. Any interested party may submit comments and the agency will include those comments in the public docket. The deadline to comment is Dec. 23 and all such comments can be submitted via regulations.gov at OSHA-2021-0009-1059.
On Sept. 29, OSHA issued new resources to protect workers from the effects of heat.
ABC strongly supports worker safety and protection from heat injury and illness, while maintaining flexibility for the fluid nature of the construction environment. Employers play a key role in providing training and awareness regarding heat protection, and ABC will continue to support members in ensuring preparedness for heat-related issues through a wide range of resources.
Worker Walkaround Representative Designation Process
On Oct. 16, the U.S. Department of Labor’s Occupational Safety and Health Administration issued an extension of the comment period for its Worker Walkaround Representative Designation Process proposed rule, which would allow an employee to choose a third-party representative, such as an outside union representative, to accompany an OSHA inspector into nonunion facilities. OSHA extended the comment period from Oct. 30 to Nov. 13. On Sept. 21, ABC, as a steering committee member of the Coalition for Workplace Safety, wrote to OSHA requesting a 60-day extension. ABC will submit comments in opposition to the rule and ABC members are also encouraged to submit comments on regulations.gov.
On Sept. 26, ABC joined 40 other CWS members in sending a letter to the U.S. House Education and the Workforce Committee’s Subcommittee on Workforce Protections calling out OSHA for its proposed rule and the politicization of the agency that the rulemaking exemplifies. Read CWS’s press release and letter.
To learn more about the rule and what employers can do to prepare, see ABC general counsel Littler Mendelson’s analysis of the proposal. In addition, watch ABC’s members-only webinar, OSHA Developments Affecting the Construction Industry, which is archived in the ABC Academy.
Background:
On Aug. 30, ABC issued a statement opposing the proposed rule, saying, “ABC is deeply disappointed that the Biden administration is trying to revive a failed Obama-era initiative, which was bad policy then and is bad policy now,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This proposal does nothing to promote workplace safety and it will have a substantial negative impact on the rights of employers and their employees.”
“By allowing outside union representatives access to nonunion employers’ private property, OSHA is injecting itself into labor-management disputes and casting doubt on its status as a neutral enforcer of the law,” said Brubeck. “Unfortunately, many outside union organizer representatives have a biased agenda that is not focused on safety or health, which could distract OSHA inspectors from their primary purpose of workplace safety.
“OSHA can have a bigger impact on jobsite safety by fostering positive partnerships with employers and promoting safety practices that produce results," said Brubeck. “For example, in ABC’s 2023 Safety Performance Report, top-performing STEP participants achieved a 688% improvement in safety performance compared to the U.S. Bureau of Labor Statistics construction industry average in 2022.”
On Feb. 21, 2013, OSHA issued a letter of interpretation endorsing union representatives and other nonemployee third parties accompanying OSHA inspectors on walkaround inspections at nonunion workplaces, which ABC adamantly opposed, expressing serious concerns. OSHA eventually rescinded the letter of interpretation on April 25, 2017.
ABC will continue to monitor this issue and provide updates as they become available.
Occupational Exposure to COVID-19 in Healthcare Settings
On April 22, 2022, ABC as a member of CISC, submitted comments in response to OSHA’s request for additional comment on its “potential provisions or approaches” to a final Occupational Exposure to COVID-19 in Healthcare Settings rule. CISC opposes OSHA’s proposal to expand coverage under any promulgated final rule and include certain construction work in health care settings.
ABC also submitted comments on April 22 as a steering committee member of the Coalition for Workplace Safety. The CWS believes unequivocally that OSHA is not permitted to, and must not, issue a permanent standard after having withdrawn the health care emergency temporary standard in December 2021.
While a final rule was slated for June 2023, it has not yet been issued.
Personal Protective Equipment in Construction
On July 20, 2023, OSHA issued a proposed rule clarifying the requirements for the fit of personal protective equipment in construction. Read the DOL’s press release.
On Sept. 18, ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments to OSHA in response to the PPE proposed rule and urged the agency to clarify what it means by the terms “properly fit” and “additional hazards” and that the clarification includes specificity so that covered industries better understand their compliance obligations. In addition, the CISC urges OSHA to clarify how it will enforce this regulation and delineate objective measures regarding what constitutes “improper fit.”
Powered Industrial Truck Design Standard Update
On May 17, 2022, ABC, as a steering committee member of CISC, submitted comments to OSHA voicing compliance and cost concerns on the proposed rule on powered industrial trucks design standard update.
According to the regulatory agenda, OSHA planned to analyze the comments from the NPRM through July 2023.
Welding in Construction Confined Spaces
In 2023, OSHA intends to issue a proposed rule to amend the Welding and Cutting Standard in construction to eliminate any perceived ambiguity about the definition of “confined space” that applies to welding activities in construction.
Procedures for the Use of Administrative Subpoenas
OSHA intends to adopt a regulation addressing the use of subpoenas during OSHA investigations to provide helpful clarity to the agency and the regulated public on these issues while promoting transparency and uniform subpoena practice across the agency.
While an interim final rule was slated for August 2023, it has not yet been issued.
Infectious Diseases
In March 2024, OSHA intends to issue a proposed rule on infectious diseases and examine regulatory alternatives for control measures to protect employees from infectious disease exposures to pathogens that can cause significant disease. The agency listed several workplaces where these control measures might be necessary, including health care, emergency response, correctional facilities, homeless shelters, drug treatment programs and other occupational settings where employees can be at increased risk of exposure.
Wage and Hour Division
Updating the Davis-Bacon and Related Acts Regulations
ABC issued a statement opposing the new rule, stating: “This is yet another Biden administration handout to organized labor on the backs of taxpayers, small businesses and the free market,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “Unfortunately, the DOL’s final rule disregards the feedback of ABC contractors, construction industry stakeholders and thousands of small businesses urging the withdrawal of this unnecessary, costly and burdensome regulation.”
All contracts entered into after Oct. 23 are subject to the new rule’s provisions. Additionally, in certain situations the rule may apply to existing contracts. This includes if a contract is changed to include substantial Davis-Bacon-covered work not within the scope of the original contract, if an option to extend a contract’s term is exercised and for ongoing contracts not tied to completion of a particular project.
ABC continues to consider options for a potential legal challenge to the final rule. For more information on the final rule, see ABC’s previous Newsline article, ABC General Counsel Littler Mendelson’s analysis and ABC’s online resources at abc.org/davisbacon.
ABC also held a members-only webinar on the final rule on Aug. 21, and the recording is now available on the ABC Academy.
On Oct. 19, ABC member Mario Burgos testified on behalf of the association before the U.S. House Committee on Small Business to urge lawmakers to rein in the Biden administration’s inscrutable and burdensome wage determination practices under the Davis-Bacon and Related Acts.
Further, the DOL has provided compliance resources on the final rule.
Independent Contractor
In January 2021, the Trump-era DOL issued an independent contractor final rule under the Fair Labor Standards Act, which ABC strongly supported. The 2021 final rule placed emphasis on two “core” factors—a worker’s control over their work and their opportunity for profit or loss, both of which are paramount in making an independent contractor determination.
Soon after the 2021 final rule was issued, the DOL froze and then rescinded the Trump rule over the opposition of ABC and other industry associations. On March 26, 2021, ABC, the ABC Southeast Texas chapter and the Coalition for Workforce Innovation filed suit against the DOL. On March 15, 2022, the U.S. District Court for the Eastern District of Texas dealt a blow to the Biden administration’s efforts to delay and rescind the Trump administration’s 2021 independent contractor final rule in that case. Under a decision applauded by ABC, the ABC-supported rule went into effect as scheduled on March 8, 2021, and remains in effect today.
The DOL filed an appeal to the Fifth Circuit Court of Appeals, which remains pending. But on Oct. 11, 2022, the DOL announced a new proposed rule to rescind and replace the ABC-supported 2021 final rule on independent contractors. The appeal is now in abeyance awaiting the DOL’s final rule.
On Dec. 13, ABC submitted comments opposing the DOL’s new proposed rule. In the comments, ABC argued that the proposal creates an ambiguous and difficult-to-interpret standard under which employers will be forced to guess which factors will be more important in the determination and how to analyze the facts of their contractual relationships under multiple factors. This confusion will lead to more litigation, as employers and workers alike will not understand who qualifies as independent contractors.
On Sept. 28, OSHA sent its final rule to OMB’s OIRA for review. The text has not yet been made public.
Overtime
On Sept. 8, 2023, the DOL published a new proposed rule that would alter the “white collar” overtime exemption regulations applicable to executive, administrative and professional employees. Specifically, the proposal would significantly raise the minimum salary level needed to qualify as exempt.
The Partnership to Protect Workplace Opportunity, of which ABC is a steering committee member, created a grassroots toolkit for members to respond to the U.S. Department of Labor’s new overtime proposed rule. The grassroots portal allows you to send model comments directly to the DOL as well as a model letter to your senators and representative in Congress opposing the new proposed rule. The deadline to submit comments is no later than Nov. 7.
Under the proposed rule, it is expected that the minimum salary threshold will be at least $55,068 (annualized). However, when the DOL promulgates the final rule, the agency claims it will use the most recent data then available. Thus, the DOL projects the minimum salary threshold to be $60,209 (annualized) in 2024—an increase of nearly 70% from the current $35,568 salary level.
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.
On Sept. 25, PPWO submitted an extension request to the DOL urging the agency to extend the Nov. 7 comment deadline by 60 days. Unfortunately, the DOL denied PPWO’s request. ABC will submit comments opposing the new rule by the deadline of Nov. 7 and ABC members are also encouraged to submit comments on regulations.gov.
To learn more about the rule’s proposed changes, see ABC general counsel Littler Mendelson’s analysis of the proposal. Also, see the DOL’s frequently asked questions about the proposed rule.
“ABC is disappointed that the DOL is moving forward with a proposed overtime rule since multiple industries, like construction, are still grappling with the lingering economic consequences of inflation, global supply chain disruptions, rising materials prices and workforce shortages, all of which push operational costs ever higher,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs, in a statement immediately following the DOL announcement.
In 2016, the Obama administration issued a final overtime rule that would have doubled the minimum salary level for exemption from $23,660 to $47,476 per year. ABC, along with several other business groups, sued the DOL in federal court and succeeded in blocking the rule from taking effect.
Nondisplacement of Qualified Workers Under Service Contracts
On Aug. 15, 2022, ABC submitted comments to the DOL identifying a number of concerns with its proposed rule on Nondisplacement of Qualified Workers Under Service Contracts, which would implement Executive Order 14055.
Issued on Nov. 18, 2021, by President Joe Biden, the EO requires that federal agencies include a clause about nondisplacement of workers in solicitations and contracts for projects covered by the McNamara-O’Hara Service Contract Act of 1965. The required clause states that successor contractors and subcontractors who win a bid for covered work must offer qualified employees employed under the predecessor contract a right of first refusal of employment under the successor contract.
ABC believes that, due to conflicts between the DOL’s proposal and the statutory language of the SCA, the proposed rule must be withdrawn in its entirety. Further, ABC is disappointed that the DOL’s new proposal fails to address any of ABC’s concerns expressed in its 2010 comment letter related to the Obama rule and EO and instead imposes additional burdens on service contractors. Should the DOL decide to proceed with this rulemaking, the proposal as written will create substantial inefficiencies in the federal procurement process.
On Sept. 6, 2023, the DOL sent its final rule to the OIRA at OMB for review, which is typically the last step before it is issued.
Office of Labor-Management Standards
Form LM-10 Employer Report
On July 28, the DOL’s Office of Labor-Management Standards published its final revision to the Form LM-10 Employer Report, which adds a checkbox to the Form LM-10 report requiring certain reporting entities to indicate whether such entities were federal contractors or subcontractors in their prior fiscal year, and two lines for entry of filers’ unique entity identifier and federal contracting agency or agencies, if applicable. The revision will be effective for reports filed on or after Aug. 28, 2023.
In October 2022, ABC submitted a comment letter to the DOL opposing the proposed revision, stating it is clear that the intent of the proposed revision is to discourage persuader activities by federal contractors, despite the fact that these activities are lawfully permitted by the Labor-Management Reporting and Disclosure Act within certain limitations. The revision would accomplish this goal by increasing public pressure on these federal contractors and assisting advocacy efforts against these companies and federal agencies that choose to employ them, as well as potentially providing a basis for federal agencies to “blacklist” these contractors in future regulations.
Employers must file the Form LM-10 report with the OLMS to disclose certain payments, expenditures, agreements and arrangements, including the hiring of outside labor relations consultants to help inform their employees regarding union organizing or collective bargaining, known as “persuader activities.”
Here are DOL resources on the final revision to the Form LM-10 Employer Report:
Continue to monitor Newsline for any new developments on this topic.
Office of Apprenticeship
National Apprenticeship System Enhancements
On July 31, 2023, the DOL’s Office of Apprenticeship sent a proposed rule on National Apprenticeship System Enhancements to OMB’s OIRA for review. The text has not yet been made public. However, according to the regulatory agenda, the proposed rule would overhaul the government-registered apprenticeship system, with the stated goal of “enhancing worker protections and equity, improving the quality of registered apprenticeships, revising the state governance provisions, and more clearly establishing critical pipelines to registered apprenticeships such as pre-apprenticeships so that the National Apprenticeship System is more responsive to current worker and employer needs.”
On May 9, an ABC-led coalition of construction and business associations submitted a letter to the Advisory Committee on Apprenticeships opposing the committee’s recommendations to the DOL for changes to the GRAP system. These recommendations included a proposal to establish a new “Quality Seal” program to give preferential treatment to GRAPs meeting certain requirements.
U.S. Department of the Treasury
Inflation Reduction Act Prevailing Wage and Apprenticeship Regulations
On Aug. 29, the U.S. Treasury Department’s Internal Revenue Service released a proposed rule and FAQs on provisions of the ABC-opposed Inflation Reduction Act, which will affect the developers, contractors and workers that are building clean energy projects eligible for more than $270 billion in federal tax credits. To learn more details about the proposed rule, see ABC’s Newsline article.
The Treasury’s Notice of Proposed Rulemaking, Increased Credit or Deduction Amounts for Satisfying Certain Prevailing Wage and Apprenticeship Requirements, proposes regulations clarifying the applicability of tax credits for the construction of private clean energy projects funded by the IRA––including solar, wind, hydrogen, carbon sequestration, electric vehicle charging stations and more––conditioned on compliance with controversial prevailing wage and government-registered apprenticeship requirements.
In October, ABC conducted a survey of contractor members regarding the proposed rule. In the survey, 98% of respondents stated that prevailing wage and apprenticeship mandates imposed by the Inflation Reduction Act will make them less likely to bid on clean energy projects.
On Oct. 31, ABC utilized this survey data in comments to the U.S. Treasury Department’s Internal Revenue Service in response to the proposed rule. ABC issued a press release on the comments, stating:
“If the Biden administration is truly committed to the Inflation Reduction Act’s stated goal of promoting construction of critical clean energy infrastructure, Treasury and the IRS must significantly revise the proposed rule to clarify prevailing wage and apprenticeship requirements and eliminate unnecessarily burdensome provisions that depart from the letter of the law,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Otherwise, increased costs and widespread delays on clean energy construction projects are inevitable as developers and contractors struggle to understand and comply with cumbersome and unclear regulations.
“While inflationary prevailing wage regulations and government-registered apprenticeship mandates that limit small business and workforce participation are unfortunately required by the Inflation Reduction Act, the agencies can still take important steps to provide clarity and lessen burdens for taxpayers and contractors,” said Brubeck. “Among many other recommended changes to the proposed rule outlined in ABC’s comments, IRS must ensure clear prevailing wage classifications are readily available to contractors seeking to pay appropriate wages and establish apprenticeship requirements and exceptions that align with actual industry practice.”
ABC also led a coalition of 13 construction and business associations in comments urging the IRS to provide regulatory clarity and to abandon its illegal and coercive scheme to push clean energy project developers into requiring PLAs.
In addition, ABC encourages ABC members and other contractors to connect with more than 400 government-registered apprenticeship programs offered by ABC chapters that can help contractors meet IRA apprenticeship requirements and win contracts for clean energy projects seeking the full IRA tax credits.
ABC hosted an ABC members-only webinar on Sept. 14, which is archived in the ABC Academy.
Stakeholders can review ABC and government resources on the IRA tax credits for clean energy projects at abc.org/ira.
Federal Acquisition Regulation Council
Use of Project Labor Agreement for Federal Construction Projects
On Feb. 4, 2022, President Biden signed Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects. Once implemented following a rulemaking by the Federal Acquisition Regulatory Council that is expected to be completed in 2023, federal agencies will require that every prime contractor and subcontractor on a federal construction project of $35 million or more performed within the United States sign a PLA as a condition of winning a taxpayer-funded contract.
In 2022, an ABC-led coalition of associations and organizations representing tens of thousands of companies and millions of employees in the construction industry sent a Feb. 15 letter to the White House and a Feb. 28 letter to Congress highlighting concerns with President Biden’s efforts to require controversial government-mandated PLAs on federal and federally assisted construction contracts. Governors, members of the U.S. House of Representatives and U.S. senators sent letters to the White House opposing its pro-PLA policies.
Additionally, ABC sent the White House a letter on April 6 with more than 1,200 signatures from member companies and chapters strongly opposing the executive order and other efforts by the Biden administration to push PLAs on federally assisted projects.
Nevertheless, on Aug. 19, the FAR Council published a proposed rule requiring federal construction contracts of $35 million or more to be subjected to project labor agreements, in accordance with EO 14063.
ABC condemned the proposal and included the results of its Sept. 7, 2022, survey of ABC contractor members’ opinions and experiences with government-mandated PLAs in more than 40 pages of comments submitted to the FAR Council opposing the rule on Oct. 18. In addition, members of Congress, governors and construction industry anti-PLA coalition members submitted comments to the FAR Council opposing the rule.
On Sept. 7, 2023, the FAR sent its final rule to the OIRA at the OMB for review, which is typically the last step before it is issued.
Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk
On Nov. 14, 2022, the FAR Council issued a proposed rule to amend the Federal Acquisition Regulation to require certain federal contractors to disclose their greenhouse gas emissions and set GHG emission reduction targets. Under the proposed rule, certain federal contractors would be required to inventory their annual GHG emissions, disclose this information to the federal government and set targets for reducing GHG emissions. Contractors that fail to comply with these requirements would be deemed nonresponsible and ineligible for federal awards.
On Feb. 13, 2023, ABC submitted comments opposing the proposal’s overly burdensome, costly and punitive approach to regulating GHG emissions of federal contractors. While ABC understands the need for sensible environmental policies that balance the protection of the environment with the costs that compliance with these regulations requires, the comments outline how the proposed rule fails to strike that balance.
The FAR is expected to issue a final rule by December 2023.
Cyberthreat and Incident Reporting and Information Sharing
On Oct. 3, 2023, the Federal Acquisition Regulatory Council issued a proposed rule on cyberthreat and incident reporting and information sharing aimed at implementing Executive Order 14028, Improving the Nation’s Cybersecurity.
The proposal, which would apply to contractors doing business with the federal government, would require contractors to take additional steps to ensure effective response to cybersecurity incidents and investigation of potential incidents. The proposal would also require contractors to provide federal law enforcement agencies as well as the contracting agency with full access to applicable information, information systems and contractor employees in response to any cybersecurity incidents. Comments on the proposed rule are due Dec. 4.
The FAR’s attempt to standardize and enhance cybersecurity comes at the same time as the U.S. Department of Defense prepares to update its Cybersecurity Maturity Model Certification program, which will assess defense contractors’ compliance and implementation of cybersecurity requirements. The CMMC proposed rule arrived at the Office of Information and Regulatory Affairs on July 28 and may be released imminently.
ABC will continue to provide resources for complying with federal cybersecurity requirements, including a July 25 webinar on the CMMC available in the ABC Academy and a Cybersecurity Resources Guide.
National Labor Relations Board
Joint Employer
On Oct. 26, 2023, the National Labor Relations Board issued its final rule on Joint Employer Status Under the National Labor Relations Act. Effective Dec. 26, the final rule takes an ax to the ABC-supported 2020 NLRB joint employer final rule, which provided clear criteria for companies to apply when determining status. ABC will explore all options to push back on this harmful final rule, including possible litigation.
Immediately following the issuance of the final rule, ABC released the following statement:
“It is unfortunate that the Biden NLRB decided to greatly expand joint-employer liability under the NLRA, which will cause confusion and impose unnecessary barriers to and burdens on contractor and subcontractor relationships throughout the construction industry,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “As a result, contractors may be vulnerable to increased liability, making them less likely to hire subcontractors, most of which are small businesses. Ultimately, this overbroad standard will have an adverse impact not only on our member contractors, but also on the overall economy.”
‘Ambush’ Election Rule
Despite being litigated for years, the Biden administration’s NLRB has revived controversial policy from the Obama era in the form of its Representation-Case Procedures final rule. The direct final rule, issued without notice and the opportunity to comment, essentially restores provisions of the “ambush” election rule of 2014 and rescinds the remaining ABC-supported provisions of the 2019 final rule. The rule will apply to representation petitions filed on or after Dec. 26, 2023, and employers will have less time to respond to representation petitions.
“The Board’s efforts to again reduce the amount of time between when a union files a representation petition and an election takes place imposes unnecessary urgency on employers, leaving them susceptible to violations of their due process rights and deprives employees of the time needed to become fully informed before deciding whether or not to unionize,” said Ben Brubeck, ABC vice president of regulatory, labor and staff affairs. “Ultimately, the rule infringes on the rights of employers and employees to a fair pre-election process and will have a particularly adverse impact on small construction firms, which typically do not employ legal counsel."
To learn about the changes included in the 2023 final rule, see ABC’s Newsline article on Sept. 5. See also the NLRB comparison chart of prior and new Representation Case Procedures as well as the fact sheet for more information.
Additionally, ABC’s general counsel Littler Mendelson has prepared an analysis of the final rule.
Finally, ABC will be offering an ABC members-only webinar on NLRB recent decisions and rules on Oct. 26 at 2 p.m. ET. Register now!
ABC vehemently opposed the 2014 rule and filed a legal challenge against it.
Federal Trade Commission
Ban on Noncompete Agreements
On April 19, 2023, ABC submitted comments urging the Federal Trade Commission to withdraw its unprecedented proposal to ban all noncompete agreements nationwide. ABC argued that the FTC lacks the statutory or constitutional authority to issue this proposed rule and regulate competition in the market—there is no congressional authorization for such action. Recent U.S. Supreme Court cases indicate this will likely be viewed by the courts as improper delegation of legislative authority.
ABC members have valid business justifications for utilizing noncompete agreements, such as protecting confidential information and intellectual property. This new rule will have a harmful effect on their companies, as well as their employees, and force companies to rethink their compensation and talent strategies. Ultimately, this vastly overbroad rule will invalidate millions of reasonable contracts around the country that are beneficial for both businesses and employees.
According to the regulatory agenda, staff planned to review comments through June 2023.
Additional Rules To Monitor Include:
Environmental Protection Agency
On Aug. 29, the U.S. Environmental Protection Agency and Army Corps of Engineers issued a final rule and fact sheet regarding amendments to the definition of “waters of the United States” subject to Clean Water Act regulation. This rule is aimed at bringing the January 2023 WOTUS final rule into compliance with the U.S. Supreme Court’s May 25 decision in Sackett v. Environmental Protection Agency.
ABC issued a statement in response to the rule, with Vice President of Regulatory, Labor and State Affairs Ben Brubeck stating:
“Unfortunately, these revisions fail to fully implement the U.S. Supreme Court’s ruling in Sackett v. Environmental Protection Agency, which placed clear boundaries on the scope of the federal government’s authority while maintaining reasonable environmental protections for America’s waterways.”
The rule implements some of the key wins from the Sackett decision, including by eliminating the “significant nexus” test. However, it fails to fully implement the court’s opinion, including on the definition of “relatively permanent” waters, and may result in continued regulatory uncertainty.
The final rule took effect on Sept. 8, 2023, after being published in the Federal Register. The amended version of the January 2023 final rule is now in effect, except in states where it is currently blocked by a preliminary injunction. Read more about the final rule.
Council on Environmental Quality
National Environmental Policy Act Implementing Regulations Revisions Phase 2—A proposed rule to further revise NEPA regulations of federal environmental reviews was issued on July 31. ABC joined a coalition of trade associations in submitting comments opposing the proposed rule, which will unnecessarily delay permitting for critical infrastructure projects. Read more.
ABC will continue to provide updates on these and other rulemakings in Newsline.
Continue to monitor ABC’s Newsline for further updates.
On Oct. 23, the U.S. Department of Labor’s final rule, Updating the Davis-Bacon and Related Acts Regulations, officially took effect. The regulation imposes drastic revisions to previous rules regarding government-determined prevailing wage rates that must be paid to construction workers on federal and federally assisted construction projects funded by taxpayers.
ABC issued a statement opposing the new rule, stating:
“This is yet another Biden administration handout to organized labor on the backs of taxpayers, small businesses and the free market,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “Unfortunately, the DOL’s final rule disregards the feedback of ABC contractors, construction industry stakeholders and thousands of small businesses urging the withdrawal of this unnecessary, costly and burdensome regulation.”
All contracts entered into after Oct. 23 will be subject to the new rule’s provisions. Additionally, in certain situations the rule may apply to existing contracts. This includes if a contract is changed to cover substantial Davis-Bacon-covered work not within the scope of the original contract, if an option to extend a contract’s term is exercised, and for ongoing contracts not tied to completion of a particular project.
For more information on the final rule, see ABC’s previous Newsline article, ABC general counsel Littler Mendelson’s analysis, the DOL’s compliance resources and ABC’s online resources at abc.org/davisbacon. ABC also held a members-only webinar on the final rule on Aug. 21, and the recording is now available on the ABC Academy.
For any questions regarding the final rule, please contact Michael Altman at [email protected].
Safety is everyone’s responsibility, but sometimes the messaging needs to be streamlined and communicated in a way that provides clarity and is meaningful to the workforce. Everyone should have input on resource allocation when it comes to safety initiatives and processes. Assigning a responsibility without the necessary resources sets up an organization for failure, undermines the culture and ultimately stalls the safety journey.
Engage Your Entire Team
Safety is rightfully one of the most important aspects of any job, and responsibilities cannot be limited to just the safety department. It is imperative to keep your workforce fully engaged and provide them with a set of responsibilities that are clear, effective and properly resourced and measured. The traditional safety approach looks to management to make all decisions and to direct the execution of responsibilities, but your workforce is more engaged when they are encouraged to provide input and they are fully trained, equipped and supported in completing their responsibilities with excellence. Ask yourself these questions:
Support Your Workforce
Identifying ways to support your workforce is one of the first, simplest steps to improve safety across your company. The industry is rapidly changing, and there are new technology and tools to make everyone safer. Top-performing contractors now utilize software and apps to review safety performance at the touch of a button.
Gone are the days of having to invest several days per month gathering data, validating it, formatting it and presenting it to upper management. The administrative time and efforts are now automated by software, freeing up safety personnel to be in the field to influence, support and coach your workforce. Instead of spending days in front of a screen, your safety department is now free to be in the field, developing more effective hazard recognition and improving the skills of your supervisors and front-line workforce. The workforce gains timely feedback and can see where more resources need to be deployed.
Meaningful, instantaneous, accurate and just feedback strengthens culture and performance. This increased transparency helps everyone see how they can best support the goals of the company to continue to improve the safety journey.
Take the ABC Total Human Health Assessment to identify meaningful changes your organization can make to improve health and safety and learn about software that can revolutionize your administrative efforts.
A survey of ABC contractor members conducted in October 2023 showed that 98% of respondents said controversial prevailing wage and government-registered apprenticeship policies imposed by the Inflation Reduction Act will make them less likely to bid on clean energy projects. The survey gauged ABC members’ responses to a proposed rule issued by the Internal Revenue Service on Aug. 29 that would implement these requirements.
ABC issued a press release on the survey results, stating:
“The concerns expressed by the overwhelming majority of respondents indicate that the proposed rule fails to provide much-needed regulatory certainty and will ultimately cause unnecessary cost increases and delays to America’s clean energy projects,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “Stakeholders seeking enhanced IRA tax incentives conditioned on meeting controversial prevailing wage and government-registered apprenticeship programs are sending a clear message that more clarity is required for the IRA to deliver on promised benefits.”
ABC will be submitting comments to the IRS by Oct. 30 in response to the proposed rule and is ready to assist members interested in submitting comments by providing a customizable template. ABC members can reach out to Michael Altman at [email protected] to receive the template.
The Inflation Reduction Act was signed into law on Aug. 16, 2022, and provides over $270 billion in tax incentives for the construction of solar, wind, hydrogen, carbon sequestration, electric vehicle charging stations and other clean energy projects.
However, this is conditioned on requirements that project contractors meet prevailing wage and apprenticeship requirements. Developers/taxpayers must ensure that contractors pay all construction workers prevailing wages and benefits set by the U.S. Department of Labor via the Davis-Bacon Act. Developers must also ensure that contractors utilize apprentices enrolled in government-registered apprenticeship programs for certain percentages of all construction hours worked on a project (12.5% of all work hours in 2023 and 15% of all work hours in 2024 and thereafter), among other requirements.
For more information on the proposed rule and other IRA requirements, visit abc.org/ira.
On Aug. 30, OSHA issued a proposed rule on Worker Walkaround Representative Designation Process, which would allow an employee to choose a third-party representative, such as an outside union representative, to accompany an OSHA inspector into nonunion facilities.
ABC issued a statement opposing the proposed rule, saying, “ABC is deeply disappointed that the Biden administration is trying to revive a failed Obama-era initiative, which was bad policy then and is bad policy now,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This proposal does nothing to promote workplace safety and it will have a substantial negative impact on the rights of employers and their employees.”
ABC congratulates the following members for successfully earning the Accredited Quality Contractor credential for the first time:
The AQC program recognizes and honors construction firms that document their commitment to excellence in key areas of corporate responsibility: quality, safety, craft and management education, talent management and community relations. A company that meets the criteria set forth in the AQC criteria and has earned STEP Gold, Platinum or Diamond status in ABC’s STEP Safety Management Program is formally designated an Accredited Quality Contractor.
As an Accredited Quality Contractor, you have the opportunity to:
If you would like to see your company achieve this recognition, visit abc.org/aqcapp for more information and to get started. Applications for 2023 close Monday, Oct. 23.
ABC has now launched the CHIPS Act—Resources and Guidance for Contractors webpage to assist contractors in competing for projects utilizing the nearly $50 billion in direct federal funding and additional tax credits in support of restoring U.S. leadership in semiconductor manufacturing and improving the semiconductor supply chain.
In July 2022, Congress enacted the CHIPS Act of 2022 (Division A of P.L. 117-167), which was signed into law by President Joe Biden on Aug. 9, 2022. Of interest to the construction industry, the CHIPS Act establishes and appropriates $39 billion to a CHIPS for America Fund to bolster semiconductor manufacturing capacity in the United States by providing financial incentives for building, expanding and equipping domestic fabrication facilities and companies in the semiconductor supply chain. The fund also provides $11 billion for semiconductor R&D activities, a National Advanced Packaging Manufacturing Program and the establishment of up to three Manufacturing USA institutes.
Unfortunately, the U.S. Department of Commerce has strongly encouraged applicants to require controversial project labor agreements on CHIPS Act funding. However, the CHIPS Act Notices of Funding Opportunity do not require applicants to mandate PLAs. CHIPS Act projects are also subject to Davis-Bacon prevailing wage requirements. ABC’s resource webpage provides further information on ensuring compliance with these requirements.
Please reach out to Michael Altman at [email protected] with any questions or comments regarding CHIPS Act compliance.
On Sept. 26, ABC, as a steering committee member of the Coalition for Workplace Safety, and 40 other employer organizations sent a letter to the U.S. House Education and the Workforce Committee’s Subcommittee on Workforce Protections calling out the U.S. Department of Labor’s Occupational Safety and Health Administration for its Worker Walkaround Representative Designation Process proposed rulemaking and the politicization of the agency that the rulemaking exemplifies. The proposed rule would allow an employee to choose a third-party representative, such as an outside union representative, to accompany an OSHA inspector into nonunion facilities. Read CWS’s press release.
According to the CWS letter:
To learn more about the rule and what employers can do to prepare, see ABC general counsel Littler Mendelson’s analysis of the proposal. In addition, watch ABC’s members-only webinar on OSHA Developments Affecting the Construction Industry, which is archived in ABC’s Academy.
ABC plans to submit comments opposing the proposal by the deadline of Oct. 30 unless an extension is granted. On Sept. 21, CWS wrote to OSHA requesting a 60-day extension. ABC members are also encouraged to submit comments on regulations.gov.
ABC has prepared a summary of Biden administration regulatory actions of interest to ABC members by agency. U.S. Department of Labor
On Aug. 23, the U.S. Department of Labor officially published its final rule, Updating the Davis-Bacon and Related Acts Regulations, in the Federal Register. The regulation’s drastic revisions to existing rules regarding government-determined prevailing wage rates that must be paid to construction workers on federal and federally assisted construction projects funded by taxpayers will now take effect on Oct. 23.
All contracts entered into after Oct. 23 will be subject to the new rule’s provisions. Additionally, in certain situations the rule may apply to existing contracts. This includes if a contract is changed to include substantial Davis-Bacon-covered work not within the scope of the original contract, if an option to extend a contract’s term is exercised and for ongoing contracts not tied to completion of a particular project.
ABC continues to consider options for a potential legal challenge to the final rule. For more information on the final rule, see ABC’s previous Newsline article, ABC general counsel Littler Mendelson’s analysis and ABC’s online resources at abc.org/davisbacon.
ABC also held a members-only webinar on the final rule on Aug. 21, and the recording is now available on ABC’s Academy.
ABC issued a press release on the proposed rule, stating:
“As is typical in the federal government’s ‘ready, fire, aim’ approach to issuing regulations, the initial IRS guidance and FAQs on the IRA’s prevailing wage and apprenticeship requirements left many unanswered questions and created confusion that has needlessly stalled the groundbreaking of clean energy projects this year,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This NPRM is a key step, welcomed by developers, taxpayers, contractors and subcontractors, who for months have been asking for clear and specific guidance on how these new provisions will be implemented. Developers can then decide whether the tax credits are worth the new and significant risks and penalties, and large and small-business contractors and subcontractors can decide whether to bid on and perform such work.”
“Unfortunately, we are months away from a final rule and the industry is unlikely to receive the clarity and confidence it needs to fully leverage the tax credits to break ground on clean energy construction projects until then,” said Brubeck.
ABC is conducting a thorough review of the 129-page rulemaking and plans to address concerns with the proposed rule in formal comments due to the IRS/Treasury by Oct. 29. ABC also encourages ABC members and stakeholders to participate in this rulemaking and comment on the proposed rule by Oct. 30. ABC concluded a survey of its members on key aspects of the proposed rule on Oct. 2, and will utilize this feedback to help inform ABC’s comments.
On Sept. 6, 2022, the NLRB announced a new joint employer proposed rule, which would rescind and replace the ABC-supported 2020 final rule on Joint Employer Status Under the National Labor Relations Act. As NLRB members Marvin E. Kaplan and John F. Ring explained in their dissent, the proposed rule “would not merely return the Board to the Browning-Ferris Industries standard but would implement a standard considerably more extreme than BFI.” ABC was a vocal opponent of the expanded definition of joint employer that was created by the NLRB’s 2015 BFI decision, and has supported legal and legislative efforts to restore the standard that was in place for more than 30 years.
On Dec. 7, ABC submitted comments to the NLRB urging the Board to withdraw the new proposed rule and retain the current 2020 NLRB final rule, which provides clear criteria for companies to apply when determining status.
In the comments, ABC argued that the new proposal will greatly expand joint-employer liability by trying to make indirect or even just reserved, unexercised control sufficient to trigger joint-employer status. This overbroad joint-employer standard will have an adverse impact not only on our member contractors but also on the overall economy.
Further, the proposal will cause confusion and impose unnecessary barriers and burdens on contractor and subcontractor relationships throughout the construction industry. As a result, contractors may be vulnerable to increased liability, making them less likely to hire subcontractors, most of which are small businesses.
While a final rule was expected in August 2023, it has not yet been issued.
On Sept. 29, ABC submitted comments with a coalition of industry stakeholders to the Council on Environmental Quality in response to a proposed rule regarding Phase 2 of revisions to the National Environmental Policy Act implementing regulations. The proposal would make wide-ranging changes that will add unnecessarily burdensome and costly provisions to the federal environmental review and permitting process.
The comments urged CEQ to withdraw the proposed rule, which would reverse critical streamlining provisions of the ABC-supported 2020 NEPA rule, including by doing the following:
The comments additionally oppose the proposal’s language adding new layers of complexity to the NEPA process, which will further delay often years-long environmental reviews. These provisions include new requirements for agencies to identify environmentally preferable alternatives, consider global impacts of federal actions and compel mitigation measures from project sponsors.
While technically implementing some of the much-needed, bipartisan NEPA reforms supported by ABC in the Fiscal Responsibility Act, the comments outline how the proposed rule seeks to undermine and weaken the FRA’s reforms and therefore defies the intent of Congress to provide certainty regarding permitting of critical infrastructure projects.
The rule follows the Phase 1 final rule issued in April 2022, which began the process of undoing key aspects of the 2020 NEPA revisions.