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On April 23, the U.S. Department of Labor issued its final rule on overtime, which will change overtime regulations under the Fair Labor Standards Act. The final rule increases the minimum annual salary level threshold for exemption in two phases: from the current level of $35,568 to $43,888 on July 1, 2024, and to $58,656 on Jan. 1, 2025. In addition, the threshold for highly compensated employees will be increase from the current threshold of $107,432 to $132,964 on July 1 and then to $151,164 on Jan. 1. Further, salary thresholds will update every three years starting on July 1, 2027.
ABC issued a news release opposing the rule:
“ABC appreciates that the DOL recognized the value in retaining the methodology used by the prior administration in the 2019 overtime rule update for the phase I increase,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Regrettably, the DOL decided to use a new methodology for phase II, which results in a 65% increase to $58,656 from the current threshold only nine months from now—further complicating the current economic outlook. Multiple industries, like construction, are grappling with uncertain economic conditions such as inflation, supply chain disruptions, high materials prices and workforce shortages, all of which push operational costs ever higher. Specifically, ABC estimates that the construction industry must hire more than half a million additional workers in 2024 to meet demand.”
“Virtually all of ABC’s members employ workers who qualify for exempt status, and phase II of the final rule will reclassify huge numbers of these employees as nonexempt,” said Brubeck. “This will disrupt the entire construction industry, specifically harming small businesses, as the rule will greatly restrict employee workplace flexibility in setting schedules and hours, hurting career advancement opportunities. These issues will recur repeatedly because the DOL rule will automatically increase the salary level every three years beginning in 2027. Additionally, the rule’s significant increase in the salary level threshold fails to account for disparate income levels in different regions of the country.
“ABC will consider all options, including a legal challenge, against this final rule,” said Burbeck.
DOL resources on the final rule:
Additionally, read ABC general counsel Littler Mendelson’s analysis of the overtime final rule.
On Nov. 8, 2023, ABC submitted comments to the DOL in response to the proposed rulemaking, calling on the DOL to withdraw it. 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.
Continue to monitor Newsline for further updates.
On April 22, the Federal Acquisition Regulatory Council published a final rule, Federal Acquisition Regulation: Sustainable Procurement, with the stated goal of restructuring and updating existing requirements for sustainability in federal procurement. The rule was first announced in an April 19 White House press release.
The final rule reorganizes and implements changes to FAR part 23, with key provisions that:
The FAR Council also released a Small Entity Compliance Guide. The final rule will take effect May 22.
On April 18, the U.S. Department of Labor’s Mine Safety and Health Administration issued the final rule on Lowering Miners’ Exposure to Respirable Crystalline Silica and Improving Respiratory Protection, which lowers the permissible exposure limit of respirable crystalline silica to 50 micrograms per cubic meter of air for a full-shift exposure, calculated as an eight-hour, time-weighted average. If a miner’s exposure exceeds the limit, mine operators are required to take immediate corrective actions to come into compliance.
The final rule will take effect on June 17, 2024. Coal mine operators have 12 months to come into compliance with the final rule’s requirements while metal and nonmetal mine operators have 24 months to come into compliance (including medical surveillance). Read MSHA’s fact sheet on the rule.
ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments on the proposed rule, stating, “While the CISC supports MSHA’s efforts to protect mine workers from overexposure to crystalline silica, the coalition requests that MSHA exempt construction activities conducted on MSHA sites. Construction activities are currently covered under the Occupational Safety and Health Administration’s final rule addressing exposure to crystalline silica (‘silica standard’). Having to comply with two different sets of rules is confusing, duplicative and unnecessary, especially when compliance with the OSHA silica standard has proven effective for construction operations.” CISC urged MSHA to develop a Table 1, like the one found in the OSHA silica standard, so that the industry has clear-cut standards and options for complying with the MSHA rule.
CISC’s comments further stated, “Our internal review of such exposure data indicates that most if not all job tasks in those surface quarrying operations are incapable of exceeding the proposed PEL. We therefore request MSHA review such data and produce a report for review and comment.”
MSHA did not include CISC’s recommendations in the final rule, instead determining that a Table 1 approach does not adequately protect miners, due to the diverse range of activities involved in mining, and constantly changing mining conditions.
According to OSHA, in addition to reducing exposure limits, the final rule does the following:
To learn more about the final rule visit MSHA.
On April 19, the U.S. Equal Employment Opportunity Commission issued a final rule to implement the Pregnant Workers Fairness Act, which has been in effect since June 27, 2023. As the EEOC explains, the PWFA requires most employers with 15 or more employees “to provide a ‘reasonable accommodation’ to a qualified employee’s or applicant’s known limitations related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an ‘undue hardship.’” The final rule goes into effect on June 18.
The final regulation provides guidance on what constitutes a limitation under the PWFA, reasonable accommodations, employee-employer communication practices and when accommodations may impose an undue hardship on an employer. It also provides information on employer defenses or exemptions, such as those based on religion.
In December 2022, the PWFA was signed into law as part of H.R.2617, the Consolidated Appropriations Act, 2023. Specifically, the PWFA requires that employers provide reasonable accommodations to workers with qualifying limitations and prohibits employers from denying employment opportunities because of the need for accommodations, retaliating against employees for requesting accommodations and forcing employees to take leave when an accommodation is possible.
ABC’s general counsel, Littler Mendelson, states the following in its analysis of the final rule, “Employers should become familiar with the final regulations and the examples of reasonable accommodation in the EEOC’s interpretive guidance to better understand their obligations under the PWFA and how the EEOC will be interpreting and enforcing it in specific cases. Employers also may want to work closely with counsel to update any pregnancy accommodation policies and related forms to ensure that they comply with the final regulations.”
EEOC Resources:
To learn more, visit eeoc.gov and see ABC general counsel Littler Mendelson’s publication on the rule.
On Feb. 27, the U.S. Environmental Protection Agency published a notice and request for comment regarding authorization of new California regulations requiring drastically lowered emissions for locomotives operated on railways within the state.
The regulations, implemented by the California Air Resources Board, state that all locomotives in California must be zero-emission models by 2030. To date, no such commercially viable zero-emission locomotives exist. The enormous cost of compliance with this regulation would likely have national impacts on the railway system, creating new logistical challenges for a key part of the supply chain and potentially leading to significantly increased construction material prices. The Washington Legal Foundation’s advisory notice provides additional details on the regulation.
Under the Clean Air Act, the EPA must approve CARB’s regulations before they can be finalized. ABC plans to join a coalition of industry stakeholders in comments opposing CARB’s regulations and urging EPA to deny the request.
ABC members can take action to oppose these overreaching regulations by submitting comments through the Association of American Railroads’ grassroots portal before the April 22 comment deadline.
On April 9, the U.S. House of Representatives passed the ABC-supported H.R.6655, A Stronger Workforce for America Act, in a 378-26 vote. Ahead of the House floor consideration, ABC sent a letter in support of the legislation. “Since its passage in 1998, WIOA has been a crucial asset to the construction industry, aiding in securing funds for workforce development efforts and assisting those seeking new jobs and employment. However, since WIOA’s bipartisan reauthorization in 2014, the construction industry has faced new challenges and a workforce shortage that has left many contractors throughout the country in desperate need of qualified, skilled craft professionals,” the letter noted. “To ensure the workforce is equipped to meet industry demand, ABC is committed to pursuing policies and legislation like H.R. 6655 that address these unique challenges.”
According to a press release by the Committee on Education and the Workforce, “This bipartisan legislation makes critical improvements to the Workforce Innovation and Opportunity Act (WIOA) that will expand the skills development provided under the law, strengthen the relationship between employers and the workforce system, and put more Americans on the pathway to successful careers.”
A Stronger Workforce for America Act reauthorizes the Workforce Innovation and Opportunity Act for the first time in nearly a decade and promotes America’s economic competitiveness. Most critically for ABC, H.R. 6655 supports an all-of-the-above approach to work-based learning and seeks true modernization and bipartisan input to support WIOA’s success.
The Biden administration continues 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 April Regulatory Roundup to learn more about the latest developments affecting the construction industry.
On April 1, the U.S. Department of Labor issued an updated version of its Prevailing Wage Resource Book. The resource provides an overview of prevailing wage requirements under the Davis-Bacon and Related Acts and Service Contract Act. The updated guide incorporates changes to Davis-Bacon regulations that came into effect on Oct. 23, 2023, under the August 2023 final rule.
The final rule made drastic revisions to the Davis-Bacon Act and Related Acts regulations that apply to federal and federally assisted construction projects funded by taxpayers. These regulations require contractors on covered projects to pay prevailing wages determined by the DOL’s survey process. Unfortunately, the rule reversed important reforms that were established by the Reagan administration and increased the inaccuracy of Davis-Bacon wage determinations.
On Nov. 7, 2023, ABC filed a lawsuit in the U.S. District Court for the Eastern District of Texas challenging the final rule, asserting that it violates numerous federal statutes and violates principles of fair and open competition on federal and federally assisted construction projects. Further updates will be provided in Newsline as the case proceeds.
ABC offered a members-only webinar on the final rule on Aug. 21, 2023. More information and resources are available on ABC’s website at abc.org/davisbacon.
On April 10, the Office of Information and Regulatory Affairs at the Office of Management and Budget concluded its review of the U.S. Department of Labor’s Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees final rule. The rule would alter overtime regulations under the Fair Labor Standards Act. The rule is expected to be released imminently now that it has completed OIRA review.
While details of the final rule are not yet available, the DOL’s proposed rule would increase the minimum salary threshold for exemption by nearly 70%, from the current $35,568 annual salary level to $60,209 annually. The DOL also proposed 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 proposed to automatically update the standard salary level and the HCE total annual compensation threshold every three years.
On Nov. 7, 2023, ABC submitted comments to the DOL in opposition to the rulemaking. ABC also issued a press release and signed onto coalition comments criticizing the proposed rule as a steering committee member of the Partnership to Protect Workplace Opportunity.
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.
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.
ABC will provide additional updates once the final rule is released.
On April 10, the U.S. Senate passed H.J. Res 98, the Joint Employer Congressional Review Act resolution of disapproval, in a 50-48 vote. ABC sent a key vote letter to senators ahead of the vote urging them to support the resolution, which would nullify the ABC-opposed National Labor Relations Board’s 2023 joint employer final rule. The Senate’s action comes two months after the U.S. House of Representatives passed H.J. Res 98 in a 206-177 vote, with eight Democrats supporting. Although President Joe Biden has vowed to veto the resolution, passage in the House and Senate sends a strong message to the administration as they continue to implement harmful labor policies.
On March 8, the U.S. District Court for the Eastern District of Texas vacated the NLRB’s 2023 joint employer final rule and the Board’s rescission of the ABC-supported 2020 joint employer final rule. Under the court’s decision, the 2020 final rule, which provides clear criteria for companies to apply when determining their joint employer status, remains in effect today.
On Nov. 9, 2023, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit challenging the NLRB’s final rule for violating the National Labor Relations Act and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act. On Feb. 22, 2024, the judge in the case delayed the final rule’s effective date from Feb. 26 to March 11. The 2023 final rule rescinded the ABC-supported 2020 NLRB joint employer final rule, which provided clear criteria for companies to apply when determining status.
The 2023 final rule was scheduled to go into effect on March 11. According to an NLRB press release, “The Agency is reviewing the decision and actively considering next steps in this case.”
To learn more about the federal court’s decision, read ABC general counsel Littler Mendelson’s analysis. Also, read ABC’s statement applauding the decision.