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Politics & Policy
ABC’s September Regulatory Roundup—Learn About the Latest Developments Affecting the Construction Industry
ABC Disappointed in NLRB’s Cemex Decision
NLRB Revives Controversial 2014 ‘Ambush’ Election Rule; ABC Opposes Again
Safety
Build Health and Safety Engagement Through Leadership Commitment and Metrics Tied to Leading Indicators
Is Your PPE and Mobile Equipment as Safe as You Think It Is?
President Biden Announces Heat Safety Actions, Including DOL Hazard Alert
Events/Products/Programs
Nearly 350 ABC Leaders Gather in Washington for Annual Legislative Conference
ABC Members Rank Among ENR’s Top 400 Contractors
Trades Day: Industry Outreach Opportunity With Meaning
State/Local News
Ed Capodanno Honored by Delaware State Legislature
Election Update: ABC Staff and Members Elected in 2022
California Targets Workplace Cannabis Testing
Awards
Graham Roofing Earns the AQC Credential in September
ABC's Construction Executive Magazine Wins Silver in Publishing Competition
Legislation
ABC-Supported Legislation To Overturn the Northern Long-Eared Bat’s Endangered Species Listing Heads to President Biden’s Desk
ABC Advocates for Solutions to Workforce Shortage at U.S. House Committee Roundtable
Smucker Introduces the ABC-Supported Main Street Tax Certainty Act
Regulations
OSHA Announces Silica-Focused Inspection Initiative in the Engineered Stone Fabrication and Installation Industries
Take the Survey: Input Needed by Oct. 2 on President Biden’s IRA Mandates
Take the Survey: ABC Needs Your Input on President Biden’s IRA Mandates by Oct. 2
Workforce Development
Register Now for ABC’s Construction Inclusion Week Webinar Series
DOL High Road Workforce Development Program Map Snubs Nonunion Programs
LISTEN: How to Design an Effective Technology Adoption Strategy
ABC Newsline
Updated Sept. 29:
Without a deal to pass a stop-gap funding measure by Oct. 1, President Joe Biden will face the first federal government shutdown of his administration. ABC has put together a series of resources to help guide ABC member contractors through a shutdown.
Departments that are affected by the shutdown offer guidance to contractors on an agency-by-agency basis. Contractors are encouraged to look for information on shutdown/contingency plans on agency websites to learn how the shutdown affects them.
Contractors can consult the Office of Management Budget’s Agency Contingency Plans (this website will be updated as plans are posted) and Frequently Asked Questions During a Lapse in Appropriations (Updated Sept. 27, 2023).
Below are links to contingency plans for federal agencies that contractors may work with:
ABC is continuing to monitor discussions surrounding the shutdown between the White House and Congress and will continue to provide updates in Newsline. Members are encouraged to reach out to the ABC government affairs team with any questions or concerns.
If the government shuts down this weekend, no monthly construction economic data releases will be issued until sometime after the government reopens. Because ABC will not receive any of the data that the government releases on construction spending, jobs openings, employment, state unemployment or materials prices, these ABC releases will also pause.
Additional Resources:
Associated Builders and Contractors would like to congratulate Graham Roofing Inc. of West Point, Mississippi, a member of ABC's Mississippi Chapter, for successfully earning the Accredited Quality Contractor credential. 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 program and has earned STEP Gold, Platinum or Diamond status in ABC’s safety management system 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 value, visit abc.org/aqcapp for more information and to get started. Applications for 2023 close Monday, Oct. 23.
On Sept. 25, the U.S. Department of Labor’s Occupational Safety and Health Administration announced a new initiative, the Respirable Crystalline Silica Focused Inspection Initiative in the Engineered Stone Fabrication and Installation Industries. The initiative supplements OSHA’s current National Emphasis Program for Respirable Crystalline Silica and prioritizes federal OSHA inspections in workplaces where workers are typically exposed to high levels of silica, Cut Stone and Stone Product Manufacturing (NAICS Code 327991) and Brick, Stone and Related Construction Material Merchant Wholesalers (NAICS Code 423320).
According to OSHA, the scope of the initiative applies to:
Federal OSHA inspections in OSHA Regions 1 through 8, which are the regions with the highest concentration of establishments in the targeted industry sectors. Programmed inspections will be prioritized in the following two NAICS codes: 327991, Cut Stone and Stone Product Manufacturing, and 423320, Brick, Stone, and Related Construction Material Merchant Wholesalers.
OSHA inspection data shows that silica overexposures are found more frequently in the Cut Stone and Stone Product Manufacturing industry, NAICS 327991, but also that inspections in the Brick, Stone, and Related Construction Material Merchant Wholesalers industry, NAICS 423320, were five times less frequent than in NAICS 327991.
This initiative targets and addresses the hazards of overexposure to silica in NAICS 327991 and NAICS 423320 and is expected to increase the likelihood of inspecting high-risk tasks. Area Offices will focus enforcement efforts on these two NAICS codes.
OSHA plans to send affected employers and stakeholders information on the initiative, including fact sheets on dust control methods and safer work practices for engineered stone manufacturing, finishing and installation operations.
Learn more about crystalline silica.
ABC is conducting an important survey of contractor members to gauge opinions and experiences with the Inflation Reduction Act’s prevailing wage and government-registered apprenticeship requirements on clean energy tax credits. Ensuring as many members as possible respond to this survey will be vital to providing effective, informed comments seeking regulatory clarity and pushing back on concerning aspects of a recent Internal Revenue Service proposed rule.
The IRA, opposed by ABC, provides over $270 billion in tax credits for the construction of solar, wind, electric vehicle charging stations and other clean energy projects conditioned on controversial prevailing wage and GRAP requirements. For more information on the proposed rule and other IRA requirements, visit abc.org/ira.
ABC distributed the survey on Sept. 18. Please email Michael Altman at [email protected] to receive the survey link or if you have any questions. The survey will close at 5 p.m. ET on Oct. 2.
On Sept. 20, the Biden administration through the U.S. Department of Homeland Security expanded the Temporary Protected Status program for Venezuelan migrants, qualifying an estimated 472,000 Venezuelans for TPS over the next 18 months for individuals who entered the United States before July 31, 2023. TPS recipients receive protection from removal from the United States and are provided with employment authorization.
The administration’s announcement attempts to provide some relief to towns and cities struggling with the influx of immigrants into their communities, many of whom are unauthorized to work, relying on local government services and putting a strain on many local communities’ resources.
While the move may be welcome news to local officials and employers facing significant workforce shortages, the use of TPS has come under scrutiny in the past few years, with some in Congress seeing the program as a circumvention of the legal immigration system that has provided indefinite legal status to those who may have entered the country illegally.
Reports have estimated over 50,000 TPS recipients are currently employed in the construction industry.
Modern day top leadership engagement is continuing to trend away from the traditional command-and-control approach. Far from the “I think it, you do it” model, the total human health approach to top management is all about leadership—curious, engaged and relational. Safety isn’t left to chance or considered the responsibility of just the safety director; safety is managed and led just like every other operation in the company, from accounts receivable to customer experience.
In all departments, people closest to the work at hand want to provide input and guidance on how their work is done. The same is true regarding safety programs. Leaders who are willing to listen to front-line supervisors and the workforce will create an environment that promotes buy-in, higher adoption and quicker implementation. The important follow-through for top management engagement is identifying metrics that are accurate and just and recognizing the effort of the workforce to achieve the goals.
Metrics tied to leading indicators rather than lagging indicators will keep the workforce engaged and focused. Leading indicators account for how current actions affect safety. Which leading indicators are the best predictor of future performance for your company? Some leading indicators will allow your company to target limited resources more effectively, specific to areas that need these resources the most. Beyond the trusted percentage completion of training metric (or submitted observations, toolbox talks, etc.), total human health looks at factors outside the jobsite that affect safety performance, mental health and/or distractions and impairment.
For example, ask yourself these leading indicator questions:
To be most effective, metrics must be easy to understand, data must be simple to collect and data should be shared nearly instantaneously via dashboards. When choosing the right metrics, leaders must ensure the metrics are meaningful to the corporate culture and appropriate to where your company is in its current health and safety journey.
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.
The IRA, opposed by ABC, provides over $270 billion in tax credits for the construction of solar, wind, electric vehicle charging stations and other clean energy projects. The proposed rule provides additional regulations regarding prevailing wage and GRAP requirements, which must be fulfilled to receive the full tax credits. Additionally, the proposed rule incentivizes union-favoring project labor agreements by exempting developers who use PLAs from increased noncompliance penalties. Comments on the proposed rule must be received by Oct. 30.
For more information on the proposed rule and other IRA requirements, visit abc.org/ira. Additionally, on Sept. 14, ABC conducted a webinar to provide insight into the proposed rule’s impact on clean energy construction. A recording of the webinar is now available on the ABC Academy website.
Construction Inclusion Week takes place every October and is an invitation to the construction workforce to unite to advance a sense of belonging for all. ABC has planned four webinars for Oct. 16-20, 2023, with industry professionals and community leaders who are excited to share their knowledge and experience—and help you improve inclusivity in your personal and professional life.
The daily themes for Construction Inclusion Week 2023 are:
• Commitment and Accountability
• Belonging
• Supplier Diversity
• Workplace Culture
• Community Engagement
The programming for Construction Inclusion Week will offer valuable insights for recruiting and retaining your workforce and putting the best talent on the field.
Monday, Oct. 16, 2023, 3p.m. ET Commitment and Accountability—Keys To Recruiting and Retaining Your Workforce
Given today’s construction workforce shortages, it takes leadership commitment to create the conditions and culture for all to be welcomed—providing the opportunities for all employees to achieve their career dreams. Join ABC construction industry leaders in discussing the powerful impact of an inclusive culture and a robust employee value proposition for growing and developing your workforce.
Wednesday Oct. 18, 2023, 3 p.m. ET Achieving Supplier Diversity—the Merit Shop Way
Supplier diversity is proven to provide economic benefits and improve opportunities for all in the industry. Discover how a commitment to inclusiveness and awarding work based on merit is key for construction buyers to create the conditions for diverse contractors to feel welcomed and appreciated for the unique value they bring to the construction field. Join this panel as they share and explore practical means and methods to provide the authentic opportunity for all contractors to compete on a fair and level playing field.
Thursday Oct. 19, 2023, 3p.m. ET Workplace Culture: How Culture Drives Business and Unlocks Performance
Join a panel of ABC leaders, members and partners to discover how a focus on total human health is key to creating an inclusive workplace culture. Learn about the practical steps that leaders are taking, the key metrics they’re using and the building blocks they’re deploying to drive business performance. You’ll walk away from this session with an understanding of how focusing on the four dimensions of a human—body, heart, mind and soul—is key to unlocking the full potential of your people.
Friday, Oct. 20, 2023, 10 a.m. ET Building Your Workforce Through Community Engagement
Learn strategies to put top talent on the field by engaging community and faith-based organizations. Establishing these relationships increases awareness of the merit shop philosophy and creates the opportunity for a more inclusive and diverse construction workforce. Hear from Illinois community leaders who have successfully recruited participants to ABC Illinois grant-funded training programs—achieving sustainable outcomes and strengthening trust-centered relationships in communities across the state.
For more information on the speakers and to register for individual webinars, click here.
On Sept. 7, the Federal Acquisition Regulatory Council’s final rule on the Use of Project Labor Agreements for Federal Construction Projects, which would mandate anti-competitive and inflationary project labor agreements on large-scale federal construction contracts, arrived at the Office of Management and Budget’s Office of Information and Regulatory Affairs for review. This is the final step before the rule will be published in the Federal Register and take effect.
The rule will finalize a proposed rule released by the FAR Council on Aug. 19, 2022, which mandated the use of PLAs on all federal construction contracts of $35 million or more. The proposal is a direct result of President Joe Biden’s Feb. 4, 2022, Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects, which directed the FAR Council to mandate PLAs on large federal construction projects. Details on the final rule are not yet available, but it is expected to closely match the proposal.
ABC previously strongly criticized the proposed rule in a statement: “ABC calls for the immediate withdrawal of this illegal proposed rule and its imposition of anti-competitive and inflationary government-mandated PLAs on federal contracts,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “PLA mandates undermine economy and efficiency in federal contracting, increase construction costs by 12% to 20%, create project delivery delays and discriminate against nonunion contractors and workers, who comprise 87.4% of the construction workforce.
ABC actively opposed the proposed rule, including with the following actions:
Once finalized, this proposal will replace President Barack Obama’s 2009 Executive Order 13502, which encourages, but does not require, federal agencies to mandate PLAs on large-scale federal construction projects exceeding $25 million in total value on a case-by-case basis, and permits states and localities to mandate PLAs on federally assisted projects. The Biden administration expects its proposed rule to affect about 120 federal contracts valued at $10 to $14 billion per year.
Publication of the final rule is expected within the coming weeks. Stay tuned to Newsline for additional information upon the rule’s release.
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?
Learn more about the final rule.
In June 2022, ABC submitted comments urging OSHA to withdraw the proposed rule.
Heat Injury and Illness Prevention in Indoor and Outdoor Settings
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.
OSHA’s actions come after President Joe Biden announced a series of actions aimed at protecting workers from the impact of extreme heat, including asking the DOL to issue a first-ever hazard alert for 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.
OSHA Actions Related to Heat Illness and Prevention:
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 June 22, 2023, OSHA announced it will be holding 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. Learn more about the SBREFA session schedule (refer to right side of webpage).
Worker Walkaround Representative Designation Process
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 plans to submit comments opposing the proposal by the deadline of Oct. 30, unless an extension is granted. ABC members are also encouraged to submit comments on regulations.gov.
To learn more about the rule and what employers can do to prepare, register for ABC’s members-only webinar on OSHA developments affecting the construction industry on Sept. 20 at 2 p.m. ET. In addition, see ABC general counsel’s, Littler Mendelson’s, analysis of the proposal.
“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. ABC plans to submit comments by the deadline of Sept. 18. Read the DOL’s press release.
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
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.
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 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.
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.
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.
While a final rule was targeted for release in August 2023, it has not yet been issued.
Overtime
On Sept. 8, the DOL published a new proposed rulemaking that would alter overtime regulations under the Fair Labor Standards Act. The proposal increases the minimum salary level threshold to $55,068 annually for a full-year worker and automatically updates the threshold every three years.
ABC will submit comments in opposition to the proposed rule by the comment deadline of Nov. 7, unless an extension is granted. ABC members are also encouraged to submit comments on regulations.gov.
To learn more about the rule’s proposed changes, see ABC’s Newsline article from Sept. 6. In addition, ABC’s general counsel, Littler Mendelson, has prepared an analysis of the proposal.
“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.
“It is unfortunate that the DOL did not listen to our repeated requests to abandon or postpone issuance of the proposed overtime rule until the current economic situation stabilizes or improves, allowing employees and employers to fully navigate the paradigm shift of work in America without new unnecessary and costly red tape,” said Brubeck.
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.
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. 29. ABC will survey its members on key aspects of the proposed rule to help inform these comments.
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 is also hosting an ABC members-only webinar on Sept. 14 and will engage in additional industry educational efforts.
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.
National Labor Relations Board
Joint Employer
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.
‘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. Details will be posted soon in Newsline.
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. Read more.
ABC will continue to provide updates on these and other rulemakings in Newsline.
On Aug. 18, the U.S. Small Business Administration announced that it was issuing interim guidance regarding the 8(a) Business Development Program as a result of a court ruling that affects the program’s determination of social disadvantage. According to the SBA’s website, the SBA has temporarily suspended new 8(a) application submissions to comply with the district court’s decision.
In the press release, the SBA states that “all current 8(a) participants will receive additional, direct communication from the SBA detailing what, if any, additional information must be provided to SBA in order to continue Program participation. Potential participants who have already initiated an 8(a) application may continue to work on their applications but may be required to incorporate changes in the future. If that is the case, SBA will give them clear indication of the changes needed. Potential participants who have not yet initiated an 8(a) application should wait until the reopening of the application on certify.sba.gov.”
Participants in the 8(a) Program, as well as applicants, are encouraged to read the interim guidance, which can be found on the SBA’s website (scroll down to the section titled “Guidance for 8(a) Program Participants in Light of the U.S. District Court Ruling”).
Please continue to monitor the SBA website as well as Newsline for any updates.
On Aug. 30, the U.S. Department of Labor announced a new proposed rulemaking that would alter overtime regulations under the Fair Labor Standards Act. The proposal increases the minimum salary level threshold to $55,068 annually for a full-year worker and automatically updates the threshold every three years. “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. “It is unfortunate that the DOL did not listen to our repeated requests to abandon or postpone issuance of the proposed overtime rule until the current economic situation stabilizes or improves, allowing employees and employers to fully navigate the paradigm shift of work in America without new unnecessary and costly red tape,” said Brubeck. ABC’s general counsel, Littler Mendelson P.C. has prepared an analysis of the proposed rule, which includes the following details:
ABC will submit comments in opposition to the proposed rule, which are due 60 days after its official publication in the Federal Register. Background: On May 25, 2023, ABC, as a steering committee member of the Partnership to Protect Workplace Opportunity, as well as 103 other organizations, sent a letter to Acting Secretary of Labor Julie Su urging her to abandon or at least postpone issuing the DOL’s proposed rulemaking to alter the overtime regulations under the FLSA. Further, the letter stated that the DOL’s last update to the overtime regulations went into effect in 2020—just three years ago—which strongly suggests there is no need for urgency in issuing more changes. In spring 2022, ABC and the employer community participated in DOL listening sessions, warning that any rule change is ill-advised. 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. In 2019, the Trump administration issued a new overtime rule, which formally rescinded the 2016 rule and readjusted the minimum salary level for exemption to $35,568 per year. The final rule went into effect on Jan. 1, 2020.
Despite being litigated for years, the Biden administration’s National Labor Relations Board 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.
Changes in the 2023 final rule include:
See the NLRB comparison chart of prior and new Representation Case Procedures as well as the fact sheet for more information.
Additionally, learn more about the 2023 final rule and what comes next in ABC general counsel Littler Mendelson’s analysis.
Also, ABC will be offering an ABC members-only webinar on NLRB recent decisions and rules. Details will be posted soon in Newsline.
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.
IRA Prevailing Wage and Apprenticeship Requirements
Signed into law in August 2022, the partisan IRA provides clean energy developers/taxpayers a bonus tax credit 500% greater than a baseline tax credit of 6%. However, this is conditioned on requirements that a developer ensures its construction contractors meet both prevailing wage and apprenticeship requirements.
To qualify for the enhanced tax credit, developers/taxpayers must ensure that contractors pay all construction workers prevailing wages and benefits established by the U.S. Department of Labor. 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). All contractors with four or more employees on a jobsite must utilize at least one registered apprentice and comply with applicable apprenticeship ratios thereafter.
The developer/taxpayer faces considerable penalties if prevailing wage and registered apprenticeship requirements are not met, and those penalties increase if the IRS determines the failure was due to intentional disregard.
The IRS proposed rule comes on the heels of initial inadequate IRS guidance––required to be issued by the IRA statute––that went into effect on Jan. 30, 2023. The IRS guidance remains in effect until the final rule is published and takes effect at a date to be determined.
ABC submitted comments on Nov. 4, 2022, to the Treasury in response to its request for comments on future initial guidance implementing these tax credits. ABC outlined concerns with the IRA’s unprecedented expansion of inflationary prevailing wage and apprenticeship requirements and the lack of clear guidance from Treasury as a result of it failing to issue regulations through a traditional notice-and-comment rulemaking. On Nov. 29, ABC issued a statement on the IRS/Treasury’s inadequate initial guidance.
Following extensive feedback from ABC and industry stakeholders on the November 2022 guidance, this summer the Biden administration announced a formal rulemaking on the matter.
Highlights of the Treasury Proposal
The proposed rule specifies that clean energy projects can be exempt from prevailing wage and apprenticeship requirements only in the following cases:
The proposed rule contains the following key provisions:
Separately, on Aug. 25, the Department of Labor’s Office of Apprenticeship issued a bulletin stating that solar panel installation occupations are not currently deemed “apprenticeable,” meaning the DOL and state apprenticeship agencies will not be able to approve government-registered apprenticeship programs specific to this occupation. The bulletin states that the work processes of this role fall under existing apprenticeable occupations such as electricians, iron workers, operating engineers, carpenters and laborers. This is expected to affect applicable solar installations receiving IRA funding.
Next Steps
In addition, ABC encourages ABC members and other contractors to connect with more than 450 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 will also host an ABC members-only webinar on Sept. 14 at 3:30 p.m. ET. Register here.
Please direct questions or comments to [email protected].
“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.
“Instead, this rule, issued without meaningful opportunities for input from the construction industry and other stakeholders, will contribute to continued regulatory uncertainty and unnecessary delays for critical infrastructure projects across the nation. ABC urges the Biden administration to issue broader revisions to WOTUS in full compliance with the Supreme Court’s decision.”
The final rule makes these adjustments to WOTUS:
The rule implements some of the key wins from the Sackett decision. 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. ABC previously submitted recommendations to the agencies regarding implementation of Sackett as part of the Waters Advocacy Coalition.
The final rule will immediately take effect upon publication in the Federal Register. At that time, the amended version of the January 2023 final rule will be in effect, except in states where it is currently blocked by a preliminary injunction.
Associated Builders and Contractors today announced its opposition to the U.S. Department of Labor’s Occupational Safety and Health Administration announcement of a proposed rule, Worker Walkaround Representative Designation Process. 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.
ABC continues to review the proposed rule and assess options for a legal challenge. To learn more about the rule, register for ABC’s members only webinar on OSHA developments affecting the construction industry on Sept. 20 at 2 p.m. ET.
To learn what employers can do to prepare, see ABC general counsel’s, Littler Mendelson’s, analysis.
On Aug. 25, 2023, the National Labor Relations Board issued its decision in Cemex Construction Materials Pacific, LLC, which imposes a new framework that greatly expands the Board’s ability to impose unions on employees without a secret ballot election. The Board’s decision overrules precedent that has stood for over half a century.
The ABC-led Coalition for a Democratic Workplace issued the following statement from ABC Vice President of Legislative & Political Affairs and CDW Chair Kristen Swearingen:
“The Board’s decision to force unions on employees without an election is contrary to the law and the fundamentals of workplace democracy. Employees deserve the right to decide whether or not they want union representation through a secret ballot election. The Board should be protecting this right and doing everything in its power to promote employee participation in elections—not forcing unions on employees based on unreliable authorization cards. The Board decision overrules precedent that has stood for over half a century and been upheld by the U.S. Supreme Court. As dissenting Member Kaplan explained, the new standard will have ‘the primary effect of negating the rights of current employees rather than furthering them’ and therefore ‘defeats, rather than effectuates, the policies of the [Act].’
“Not only is CDW disappointed in the ruling, but we’re disappointed that the Board chose to move forward with such a fundamental change to labor law without seeking input from stakeholders. This is more concerning given that CDW and others specifically called on the Board to invite amicus briefs in the case. The regulated community should have had an opportunity to express their concerns before such a radical change to policy was made.”
On May 3, 2022, ABC joined CDW in submitting a motion that requested the NLRB to solicit amicus briefs in Cemex in response to the general counsel’s request that the Board overrule multiple longstanding and significant Board precedents in the case.
Littler published additional analysis on the decision.
Despite being litigated for years, the Biden administration’s National Labor Relations Board 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.
“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."
Learn more about the 2023 final rule in ABC general counsel, Littler Mendelson’s analysis.
The NLRB’s final rule and fact sheet have more information.
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.”
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.
The DOL will also be conducting webinars on the final rule on Sept. 13 and 14, and has provided compliance resources on the final rule.
For any questions regarding the final rule, please contact Michael Altman at [email protected].
ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck was recently interviewed on Fox News’ “America Reports” explaining the construction industry’s labor shortage and how that will affect the massive injection of capital into infrastructure under recently passed legislation.
“It’s the result of a perfect storm of regulatory, demographic and economic issues all happening together,” said Brubeck, citing the skilled labor shortage of half a million workers in 2023, according to ABC.
“We’re seeing 40% cost increases in construction materials prices since before the pandemic,” said Brubeck. “We’re also seeing some Biden administration policies that are increasing the cost of construction and artificially exacerbating the skilled labor shortage.”
ABC and its 68 chapters are working hard to attract new talent into the industry through various pathways appealing to different populations, said Brubeck. ABC offers more than 300 government-registered apprenticeship programs across the country. ABC is also recruiting veterans, reentering citizens, careers switchers and young people into the industry.
Equipment of any kind needs to be accompanied by training, evaluation, inspection, follow-up and, most importantly, an operator who understands the potential hazards and carries out their duties in a safe manner.
Personal Protective Equipment
Some people think they’re safe simply because they are wearing their PPE—helmet, safety glasses, gloves, ear protection and safety toe boots. However, as vital as PPE is for your team, PPE does nothing to physically prevent an accident from occurring in the first place.
For example, we see this on display every day on the roads—safety features alone don’t prevent accidents. Cars are equipped with protections such as anti-lock brakes, blind spot monitoring, front-wheel drive and more, all to make driving safer. Some might even equate a properly working airbag as a form of PPE for the driver. The question to consider is, “Did the airbag do anything to physically prevent the accident?” Absolutely not.
The same is true with PPE, which is designed to minimize the injury or prevent death once the accident has already happened. This point is crucial to understand—PPE does nothing to physically prevent the accident. Its purpose is to minimize the effects of the accident.
The only device that is powerful enough to prevent an accident from happening is the human mind, fully engaged in understanding the task at hand. You and your team need to be diligent and in the right mindset at all times. Take the appropriate precautions to prevent an accident from ever happening. Perform visual hazard analysis and maintain a physically safe workplace. As conditions change at the worksite, you must adjust to maintain safety. This awareness is key to keeping everyone safe.
Mobile Equipment
Today’s mobile equipment is safer than ever before. Yet, distractions, impairment or improper training can cause an incident. Before anyone operates mobile equipment, these conditions must be met:
Only when the mind is fully educated and actively engaged with safety protocols will the mobile equipment be safe to operate.
Educate the Mind To Prevent Accidents
Safety is everyone’s responsibility throughout the entire organization, and everyone needs to be fully and thoughtfully engaged. Donning a pair of safety glasses or a pair of gloves isn’t enough. Proper training, culture and mindset is the key to success and lower incidence rates. Find opportunities to build your health and safety culture every day.
On Aug. 14, the Office of Management and Budget announced final guidance to revise OMB’s Guidance for Grants and Agreements. This guidance defines the rules for federal agencies as they distribute funding through grant programs and other financial assistance. The revisions would aid implementation of the Build America, Buy America Act provisions of the Infrastructure Investment and Jobs Act. This guidance finalizes a proposal issued by the OMB on Feb. 9.
The IIJA requires the following expanded Buy America preferences and broadens the preferences to include nonferrous metals, such as copper used in electric wiring; plastic- and polymer-based products; glass, including optical fiber; and certain other construction materials, such as lumber and drywall:
The final guidance largely implements the guidance as proposed, with some limited technical modifications. It codifies the rules outlined above and is intended to clarify several aspects of Buy America implementation:
ABC commented on the proposed guidance to urge OMB to balance Buy America requirements with safeguards against increased costs and delays of infrastructure projects funded by taxpayers. While ABC supports strategies to expand domestic jobs and manufacturing to avoid global supply chain disruptions and capture economic benefits within America, ABC continues to have concerns regarding immediate implementation of the guidance’s domestic content requirements.
The guidance will take effect 60 days after publication in the Federal Register.
On Aug. 8, the U.S. Department of Labor issued its final rule, Updating Davis-Bacon and Related Acts, making drastic revisions to existing regulations concerning government-determined prevailing wage rates that must be paid to construction workers on federal and federally assisted construction projects funded by taxpayers.
The new rule was hailed by Vice President Kamala Harris and Acting DOL Secretary Julie Su in a speech to union construction workers and leaders in Philadelphia, and the White House released a fact sheet on the new rule.
ABC issued a statement opposing the new rule, which was picked up by more than 700 publications, 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. Instead, the DOL is moving forward with dramatic changes to prevailing wage regulations, reversing much-needed reforms that were established nearly 40 years ago, and unlawfully increasing the regulatory burden on small businesses, new industries and public works projects.”
ABC also gave interviews to top-tier national media, generating sympathetic coverage in The Washington Examiner, Yahoo! News and dozens of local television stations. Overall, coverage was featured on MSN, The Washington Post, U.S. News and World Report and more, reaching millions of readers and viewers.
In May 2022, ABC submitted nearly 70 pages of comments on the DOL’s ABC-opposed March 2022 proposed rule, and its more than 50 significant changes, urging the DOL to withdraw the proposal. ABC’s comments detailed how the proposed rule violated existing law and would fail to fix the DOL’s unscientific wage determination process, rescind pro-taxpayer reforms made by the Reagan administration and increase regulatory burdens on small businesses, new industries and more public works projects.
ABC staff is still conducting thorough analysis on the more than 800-page final rule, but its initial review and this DOL chart confirm several key changes to existing regulations:
However, the DOL did modify a number of provisions of the proposed rule, in some cases directly referencing ABC’s comments in its decision to mitigate some of the rule’s harmful provisions, including:
The final rule is schedule for publication in the Federal Register on Aug. 23, and will take effect 60 days later.
ABC is evaluating compliance, advocacy and litigation strategies.
ABC is offering a members-only webinar on Aug. 21 at 3 p.m. ET and will continue to provide additional resources to assist contractors in complying with these new regulations at abc.org/davisbacon.
To learn more about the final rule, see ABC general counsel Littler Mendelson’s analysis.
The new rule is also opposed by key congressional leaders, including Senate Health, Education, Labor and Pensions Ranking Member Bill Cassidy, R-La., who blasted the Biden administration’s new rule, stating, “This is the last thing our country needs as families continue to live with the painful effects of the Biden administration’s inflation agenda.”
House Education and the Workforce Committee Chairwoman Virginia Foxx, R-N.C., also released a statement calling the new rule “wrong” and stating that it “will also drastically increase the costs of federal construction projects, leading to fewer completed infrastructure projects and a greater burden on taxpayers.”
Cassidy and Foxx have also questioned Su’s indefinite appointment without Senate confirmation in potential violation of the constitutional provision of advice and consent that could open any DOL action under Su’s leadership to legal challenges.
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 Congressional Budget Office estimates that repealing the 1930s-era Davis-Bacon Act would save the federal government $24.3 billion in spending between 2023 and 2032. A May 2022 study found that the Davis-Bacon Act costs taxpayers an extra $21 billion a year, increases the price tag of construction projects by at least 7.2% and inflates construction workforce wages by 20.2%, compared to local market averages, if the DOL calculated prevailing wages using modern and scientific methodology via the U.S. Bureau of Labor Statistics.
On Aug. 2, the National Labor Relations Board issued a decision in Stericycle Inc., which overruled Boeing and adopted a new legal standard for evaluating employer work rules challenged as facially unlawful under Section 8(a)(1) of the National Labor Relations Act. The Stericycle decision could fundamentally affect the labor policies of many employers in the construction industry.
The ABC-led Coalition for a Democratic Workplace immediately issued a statement, denouncing the decision. “The Board’s decision makes it nearly impossible for employers across the country to provide safe, hostile-free workplaces for workers,” said Kristen Swearingen, ABC vice president of legislative & political affairs and chair of the CDW. “The Board has inserted instability and confusion into the workplace and created risks for employers attempting to implement commonsense policies that protect workers, customers and the community.
“The better approach, by far, was the Board’s decision in Boeing, which ensured the Board would consider both the employer’s legitimate justifications and the potential impact on workers’ NLRB rights when assessing a facially neutral policy, rule or handbook provision,” said Swearingen. “This standard clearly and appropriately balanced the analysis and ensured employers can provide safe workplaces for all.
The Board’s Stericycle decision will only create confusion for the regulated community, and CDW will pursue avenues to reverse this dangerous precedent.”
In a NLRB press release announcing the decision, Chairman Lauren McFerran stated, “Boeing gave too little consideration to the chilling effect that work rules can have on workers’ Section 7 rights. Under the new standard, the Board will carefully consider both the potential impact of work rules on employees and the interests that employers articulate in support of their rules. By requiring employers to narrowly tailor their rules to serve those interests, the Board will better support the policies of the National Labor Relations Act.”
In March 2022, the CDW filed an amicus brief in the Board’s Stericycle case, opposing the NLRB’s announced plan to overturn the 2017 Trump-era NLRB Boeing decision, dealing with the legality of many facially neutral employer handbook provisions. ABC, along with several other organizations, joined the brief.
ABC is continuing to review the Stericycle decision and will provide any new developments in Newsline.
The Federal Acquisition Regulatory Council plans to issue a proposed rule on Aug. 3, 2023, that would establish new requirements for “sustainable procurement” in federal contracting. The proposal complies with Executive Order 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, signed by President Joe Biden on Dec. 8, 2021.
The proposed rule restructures and updates numerous existing FAR environmental and sustainability requirements, consolidating these requirements under FAR Part 23.
Additionally, the proposal increases sustainable acquisition requirements. Under existing regulations, agencies must ensure that 95% of new contracts for products and services utilize sustainable materials. The proposed rule replaces this provision with a requirement that agencies purchase sustainable products and services “to the maximum extent practicable.” Exceptions are possible where agencies cannot acquire a sustainable product or service on a reasonable schedule, meet performance requirements or obtain a reasonable price.
Comments on the proposed rule will be due 60 days from the date of publication.