Government Affairs

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Priority Issue Briefs

Infrastructure

Status

On Nov. 15, 2021, President Joe Biden signed into law the $1.2 trillion Infrastructure Investment and Jobs Act, which provides $550 billion in new funding to invest in America’s roads, bridges, utilities and other needs on top of baseline government infrastructure spending via existing programs and annual appropriations. Much of the IIJA funding will be distributed to states and localities and other stakeholders through discretionary grant programs; however, the Biden administration continues to promote pro-labor policies tied to IIJA dollars.

As the bill made its way through Congress, ABC  advocated for merit shop priorities in the legislation, ultimately remaining neutral on the passage of the IIJA. Although the IIJA does not include project labor agreement mandates or PLA preferences, the bill does include an expansion of Davis-Bacon requirements and other provisions of concern to ABC.

ABC is now closely monitoring implementation of IIJA as funding allocations and notices of grant opportunities begin to emerge. A number of federal agency programs valued at more than $250 billion in infrastructure dollars have included pro-PLA language in their application criteria, which ABC will seek every opportunity to oppose.

On Nov. 10, the U.S. Department of Transportation announced the expiration of a general waiver to Buy America requirements imposed by the IIJA. With this expiration, the IIJA’s expanded Buy America requirements are now in effect for most federally funded infrastructure projects.

ABC submitted comments advocating for the waivers that said while ABC supports strategies to expand domestic jobs and manufacturing to avoid global supply chain disruptions and capture economic benefits within America, Buy America requirements must be balanced with safeguards against delays of infrastructure projects funded by taxpayers and increased construction materials costs, which have ballooned by almost   40% since February 2020.

Desired Outcome

The IIJA creates an opportunity to effectively modernize our nation’s most critical infrastructure, and ABC stands ready to do the important work to bring America’s infrastructure into the 21st century. However, ABC remains wary of some of the bill’s exclusionary provisions and statements from the Biden administration that could restrict the eligibility of America’s workers to compete for and participate in these construction projects.

As the Biden administration begins to implement the IIJA, ABC and industry stakeholders will continue to support the Fair and Open Competition Act (H.R.1209/S.537 in the 118th Congress),  which would prevent government-mandated PLAs on federal or federally assisted construction contracts. ABC members are encouraged to visit the ABC Action Center and urge their members of Congress to support FOCA.

IRA Tax Credits

Status

The Inflation Reduction Act was signed into law on Aug. 16, 2022, and provides over $270 billion in tax credits for the construction of solar, wind, hydrogen, carbon sequestration, electric vehicle charging stations and other clean energy projects.

A new policy in Subtitle D-Energy Security of the IRA grants developers/taxpayers a bonus tax credit 500% greater than a baseline tax credit of 6%, but this is conditioned on requirements that project contractors pay Davis-Bacon prevailing wages and utilize apprentices enrolled in government-registered apprenticeship programs. This new policy is an unprecedented expansion of Davis-Bacon and government-registered apprenticeship requirements/enticements onto private construction projects via the federal tax code.

On Nov. 30, Treasury and the IRS released guidance regarding tax credits for private clean energy projects funded by the Inflation Reduction Act conditioned on compliance with prevailing wage and government-registered apprenticeship requirements. Treasury and the IRS also released FAQs to provide additional information on prevailing wage and apprenticeship requirements.

The prevailing wage and apprenticeship provisions outlined in the guidance will now apply to projects that begin construction on or after Jan. 30, 2023––60 days after the guidance’s publication in the Federal Register. Treasury indicated it “plans to issue additional proposed regulations with respect to these requirements in the coming months.”

In order to access full tax credits, developers of qualifying projects are required to use apprentices from government-registered apprenticeship programs for at least 15% of the total labor hours of the project in 2024, which phases in at 12.5% for construction work in 2023 and increases to 15% in 2024 and thereafter. Each contractor and subcontractor employing four or more individuals on a qualifying project must employ one or more apprentices from a government-registered apprenticeship program.

Developers seeking the full bonus credit must require contractors and subcontractors to pay laborers and mechanics employed for the construction and alteration or repair of a qualifying project an hourly prevailing wage rate set by the DOL via the Davis-Bacon Act.

The guidance does not provide clarity on whether Treasury and the IRS or the DOL will be enforcing compliance and the additional regulatory red tape and practices that typically accompany regulations related to the DBA, though this may be clarified in future regulations and guidance documents.

Construction trade unions and their allies have approached clean energy developers and contractors and insisted a project labor agreement is required to qualify for the full tax credits from Treasury. No such provision exists in the IRA or in the Treasury guidance or FAQs. A PLA is not needed to ensure that contractors meet the IRA’s prevailing wage and government-registered apprenticeship program requirements.

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.

According to a survey of ABC contractor members published Oct. 24, 98% of respondents stated that prevailing wage and government-registered apprenticeship policies imposed by the Inflation Reduction Act will make them less likely to bid on clean energy projects. 

On Oct. 30, ABC submitted comments to the IRS and issued a Oct. 31 press release, calling on the Biden administration to clarify prevailing wage and apprenticeship requirements and eliminate unnecessary provisions that depart from the letter of the law, including the proposed rule’s incentivization of project labor agreements that restrict competition and unfairly favor unions.

A final rule is not expected until December 2024. The proposed rule states that taxpayers seeking to comply with the IRA may rely on these regulations until a final rule is published.

Desired Outcome

ABC will continue to advocate for fixes to the restrictive labor policies enacted by the IRA, and the unnecessary cost increases they will cause for contractors and developers.

In the meantime, ABC will continue to provide resources on IRA’s provisions to assist members in maximizing the potential opportunities presented by the IRA while navigating the unique difficulties posed by its expansion of Davis-Bacon and GRAP requirements into the private sector.

Explore ABC’s IRA webpage today at abc.org/ira. If you have additional questions regarding the IRA, please contact [email protected].

Joint Employer

Status

On March 8, in a victory for ABC, a federal judge in the U.S. District Court for the Eastern District of Texas vacated the 2023 National Labor Relations Board’s joint employer rule and the rescission of the preexisting ABC-supported 2020 rule. This means the 2020 NLRB final rule remains in effect, which provides clear criteria for companies to apply when determining joint-employer status under the National Labor Relations Act.

ABC released the following statement about the decision:

“We are pleased the court has blocked the NLRB’s radical and overbroad joint employer standard, which would have disrupted long-established, efficient operational processes that are followed by construction service providers who work together to build America,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs.

“Under the 2023 final rule, contractors would be vulnerable to increased liability and risk, making them less likely to hire subcontractors, most of which are small businesses. The rule clearly would have had a harmful effect on a significant segment of the construction industry: small businesses.

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

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 NLRA and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act. The 2023 final rule rescinded the ABC-supported 2020 NLRB joint employer final rule.

Desired Outcome

ABC supports the CRA to overturn the NLRB’s joint employer final rule.

ABC also supports the Save Local Business Act (H.R. 2826/S. 1261) introduced on April 26 by Sen. Roger Marshall, R-Kan., and Rep. James Comer, R-Ky., to make clear that an employer may be considered a joint employer in relation to an employee only if the employer directly, actually and immediately exercises significant control over the essential terms and conditions of employment. ABC joined a coalition in support of the legislation.

Multiemployer Pension Plans

Status

In March 2021, President Biden signed the American Rescue Plan Act of 2021 (H.R. 1319) into law, including a controversial provision providing a Congressional Budget Office-estimated $86 billion taxpayer bailout of struggling union multiemployer pension plans. The structural flaws of MEPPs and potential for costly MEPP withdrawal liability and plan insolvency have been recognized for decades. Small businesses work hard to provide good benefits for their employees and call the concession to these plans a costly bailout that is expected to cost taxpayers as much $400 billion in the long run without significant reforms. A final rule outlining the distribution of bailout money is live (RIN No. 1212-AB53) and dozens of construction industry multiemployer pensions plans have been granted relief by the Pension Benefit Guaranty Corporation’s Special Financial Assistance Program.

Desired Outcome

ABC will continue to monitor all legislative proposals concerning the Pension Benefit Guaranty Corp. and MEPPs and oppose government-mandated PLAs and other laws mandating contractor and employee participation in MEPPs, which can result in lost wages and benefits by for nonunion employees as much as 34%. Visit freeenterprisealliance.org/foca to learn more and take action.

National Environmental Policy Act

Status

In July 2020, the Council on Environmental Quality issued an ABC-supported final rule to modernize the federal environmental review process under the National Environmental Policy Act regulations.

In 2021, the CEQ under Biden announced it would issue a multistep proposal to revise the 2020 final rule.

In November 2021, ABC and a coalition of stakeholders submitted comments in support of a streamlined approach to the permitting process under NEPA to reduce delays hindering critical projects, resulting in better infrastructure, a stronger economy and continued environmental stewardship.

On April 19, 2022, the CEQ announced its final rule revising the implementation regulations of NEPA, which will cause needless delays for small businesses and increase costs for taxpayers. Read ABC’s statement on the new final rule. ABC supports passage of S.J.Res.55, introduced by Sen. Dan Sullivan, R-Alaska, which would overturn the final rule and preserve the July 2020 reforms. The resolution passed the Senate on Aug. 4, in a 50-47 vote and now awaits action in the House. 

On Sept. 27, ABC sent a letter to the Senate outlining ABC’s support for Sen. Shelley Capito’s, R-W.Va., Simplify Timelines and Assure Regulatory Transparency Act. The START Act, which counters the energy permitting reform legislation from Sen. Joe Manchin, D-W.Va., would address many of the priorities of the merit shop construction industry in reforming the permitting process for critical energy and natural resource construction projects.

On July 31, 2023 CEQ issued a proposed rule regarding Phase 2 of revisions to the National Environmental Policy Act implementing regulations. The proposal would make wide-ranging changes that would add unnecessarily burdensome and costly provisions to the federal environmental review and permitting process.

On Sept. 29, BC submitted comments with a coalition of industry stakeholders urging CEQ to withdraw the proposed rule, which would reverse critical streamlining provisions of the ABC-supported 2020 NEPA rule. While technically implementing some of the much-needed, bipartisan NEPA reforms supported by ABC in the Fiscal Responsibility Act, the comments outline how the proposed rule seeks to undermine and weaken the FRA’s reforms and therefore defies the intent of Congress to provide certainty regarding permitting of critical infrastructure projects.

Desired Outcome

ABC supports NEPA modernization that creates a coordinated, predictable and transparent method for permitting. ABC will continue to advocate for sensible reforms, such as “one federal decision” language included in the 2021 Infrastructure Investment and Jobs Act, to ensure that projects are completed on time and on budget while protecting communities and the environment.

National Labor Relations Board

Status

Immediately after taking office, President Biden fired incumbent NLRB general counsel Peter Robb, a move without precedent since the establishment of the Independent Office of General Counsel in the NLRB in 1947.

In July 2021, President Biden nominated Jennifer Abruzzo to serve as general counsel of the NLRB. In response, the ABC-led Coalition for a Democratic Workplace sent a letter opposing her nomination. Abruzzo was confirmed, and since then, she has worked to overturn numerous and significant NLRB precedent.

In August 2021, the Democrats regained their majority on the NLRB. Prior to the new Democratic members being confirmed, the CDW sent a letter in July to the Senate Health, Education, Labor and Pensions Committee to oppose the nominations of Gwynne Wilcox and David Prouty to serve as members of the NLRB.

The NLRB’s Democratic majority has sought to overturn many board labor policies adopted during the Trump administration.

For example, the NLRB is trying to change the employee classification standard under the National Labor Relations Act. In December 2021, the NLRB invited amicus briefs in The Atlanta Opera asking if the NLRB should revert back to the Obama-era standard, which severely undervalued the significance of a worker’s entrepreneurial opportunity for economic gain when determining if the worker is an employee or independent contractor. ABC joined the CDW in filing an amicus brief, which highlighted the NLRB’s two failed attempts to rewrite the standard for determining independent contractor status under the NLRA. 

In January 2022, ABC also joined an amicus brief in the NLRB’s Stericycle case, opposing the NLRB’s announced plan to overturn the Trump-era NLRB’s 2017 decision in Boeing, Inc., dealing with the legality of many facially neutral employer handbook provisions. The NLRB is arguing such policies infringe on workers’ rights to “protected, concerted” employee activities. A decision in this and other cases are expected soon from the NLRB, which could fundamentally impact the labor policies of many employers in the construction industry.

Additionally, on April 7, NLRB General Counsel Abruzzo issued a memo to all NLRB field offices declaring that employers’ holding mandatory meetings with workers to discuss unionization violates a worker’s “right to not listen to such speech,” essentially eliminating employers’ free speech rights during union organizing campaigns in the workplace and exposing workers to potential coercion and intimidation. This is despite the fact that the NLRB has protected employer speech rights for 74 years and the Supreme Court has repeatedly recognized these meetings as an extension of employers’ First Amendment rights.

The NLRB is also attempting to return to the Obama-era joint employer standard. On Sept. 7, the NLRB issued a notice of proposed rulemaking rescinding the Trump-era policy, which clarified that joint employer status would only be imposed on an employer if they exercise “substantial direct and immediate control” over the terms and conditions of employment of another employer’s workers. (See “Joint Employer” priority issue brief for further details.)

On Nov. 22, the CDW requested that the NLRB issue a 30-day extension to the comment period for the proposed rulemaking on representation election procedures to ensure the regulated community has an opportunity to weigh in on the potential impact the proposed changes could have on business operations, the workforce and the economy generally. On Nov. 29, the NLRB announced it is extending the comment deadline from Jan. 3 to Feb. 2, 2023.

ABC filed comments opposing the proposed rule on Feb 2.

On Nov. 8, ABC joined the CDW and six other employer organizations in filing an amicus brief before the Supreme Court to request that the court reverse the judgment of the Washington Supreme Court in Glacier Northwest, Inc v. International Brotherhood of Teamsters. The Washington Supreme Court’s decision stated that the NLRB preempts state tort suits, allowing unions and their supporters to intentionally destroy an employer’s property while claiming to be engaged in protected concerted activity.

Desired Outcome

The NLRB must serve as a neutral arbiter of federal labor law. ABC supports balanced policies that reflect the NLRB’s original mission to fairly interpret and enforce federal labor law. Unfortunately, while the Trump administration scaled back some of the most controversial policies under the Obama-era NLRB, the Biden administration has pledged to return to the Obama-era tactics.

OSHA Electronic Injury Reporting Rulemaking

Status

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?

  • Establishments with 100 or more employees in certain high-hazard industries are required to electronically submit information from their OSHA Forms 300 and 301 to OSHA once a year. They are also required to include their legal company name when making electronic submissions to OSHA.
  • Establishments with 20 to 249 employees in certain high-hazard industries will continue to be required to electronically submit information from their OSHA Form 300A annual summary to OSHA once a year.
  • Establishments with 250 or more employees that must routinely keep records under OSHA’s injury and illness regulation will also continue to be required to electronically submit information from their Form 300A to OSHA once a year.
  • The data must be electronically submitted through OSHA’s Injury Tracking Application.

In June 2022, ABC submitted comments urging OSHA to withdraw the proposed rule.

Desired Outcome

ABC urged OSHA to withdraw the proposed rule. ABC has serious concerns that the Biden DOL final rule  will increase the number of contractors subject to electronic safety data submission requirements and carry high risks for exposing sensitive and private employee information as well as confidential business information by posting parts of the submissions on a public website. Public disclosure of this information could cause reputational harm based on misleading information on the safety and health efforts of employers. These records could easily be misconstrued, and improper conclusions or assumptions could be made about an employer.

OSHA Heat Injury and Illness Prevention Rulemaking

Status

On Oct. 27, 2021, OSHA issued an Advance Notice of Proposed Rulemaking on Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings, which requested information on how to implement regulations to prevent workers from hazardous heat. ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments in response to the ANPRM on Jan. 26, 2022.

On April 12, 2022, OSHA announced a National Emphasis Program on Outdoor and Indoor Heat-Related Hazards, which sets out a targeted enforcement effort and reiterates OSHA’s compliance assistance and outreach efforts.

On July 27, 2023, OSHA issued a heat hazard alert to remind employers of their obligation to protect workers against heat illness or injury in outdoor and indoor workplaces. The department also announced that OSHA will intensify its enforcement where workers are exposed to heat hazards, with increased inspections in high-risk industries like construction and agriculture. These actions will fully implement the agency’s National Emphasis Program on heat, announced in April 2022, to focus enforcement efforts in geographic areas and industries with the most vulnerable workers.

In September, OSHA held six Small Business Advocacy Review panel (also known as a SBREFA panel) meetings to gather input on a possible Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings rule. Any interested party may submit comments and the agency will include those comments in the public docket. The deadline to comment is Dec. 23 and all such comments can be submitted via regulations.gov at OSHA-2021-0009-1059. 

On Sept. 29, OSHA issued new resources to protect workers from the effects of heat.

ABC strongly supports worker safety and protection from heat injury and illness, while maintaining flexibility for the fluid nature of the construction environment. Employers play a key role in providing training and awareness regarding heat protection, and ABC will continue to support members in ensuring preparedness for heat-related issues through a wide range of resources.

Desired Outcome

ABC strongly supports worker safety and protection from heat injury and illness. However, flexibility for employers must be maintained in any rulemaking on this issue. A regulatory approach—if adopted—must be simple and should integrate the key concepts of “water, rest, shade.” ABC also supports a separate regulatory approach for the construction industry to ensure the regulation is adaptable to the fluid nature of the construction environment.

Overtime Rulemaking

Status

On Nov. 7, ABC submitted comments to the U.S. Department of Labor in opposition to a proposed rulemaking that would alter overtime regulations under the Fair Labor Standards Act. 

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

Under the proposed rule, it is expected that the minimum salary threshold will be at least $55,068 (annualized). However, when the DOL promulgates the final rule, the agency claims it will use the most recent data then available. Thus, the DOL projects the minimum salary threshold to be $60,209 (annualized) in 2024—an increase of nearly 70% from the current $35,568 salary level.

The DOL also proposes to significantly raise the total annual compensation needed to qualify for exemption under the streamlined test for highly compensated employees from the current total annual compensation of $107,432 to $143,988.

Finally, the DOL proposes to automatically update the standard salary level and the HCE total annual compensation threshold every three years.

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.

Desired Outcome

ABC urges the DOL to withdraw the new overtime proposal. There is no immediate compelling reason to alter the current minimum salary threshold since it was adjusted in 2019. Further, and most importantly, the DOL should recognize that the construction industry is currently up against high materials prices, inflationary pressures and workforce shortages. Regrettably, the DOL’s proposed salary level increase will further complicate the current economic situation. Moreover, because the DOL proposes to automatically increase the salary level every three years, these issues will recur repeatedly.

Protecting the Right to Organize Act

Status

President Joe Biden continues to back and support provisions in the ABC-opposed Protecting the Right to Organize Act (H.R.20/S.567), which would violate workers’ free choice and privacy rights, force unions on employees who have voted against such representation, cost millions of American jobs and threaten vital supply chains.

On Feb. 28, 2023, congressional Democrats reintroduced the PRO Act in the 118th Congress. On June 20, ABC and the ABC-led Coalition for a Democratic Workplace sent opposition letters to the Senate Committee on Health, Education, Labor, and Pensions ahead of its June 21 markup. The bill passed out of committee on an 11-10 party line vote but is unlikely to be voted on by the full Senate and will not receive a vote in the Republican controlled House. However, President Biden and his administration are attempting to use agency rules and regulations to enact harmful provisions of the PRO Act without Congressional approval.

Desired Outcome

The PRO Act is a wish list of radical labor policies that would infringe on workers and employers’ rights, diminish opportunities for entrepreneurs and small business owners and devastate the economy.

ABC and the CDW are leading the fight against the PRO Act, engaging with key audiences to stop this attempt to implement radical labor policies. Visit freeenterprisealliance.org/proact to learn more and take action.

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