Government Affairs

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Priority Issue Briefs

‘Ambush’ Election Rule

Status

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.

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.

ABC vehemently opposed the 2014 rule and filed a legal challenge against it. 

Desired Outcome

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.

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.

"Blacklisting" Fair Pay and Safe Workplaces

Status

On Aug. 24, 2016, the Obama administration issued the Fair Pay and Safe Workplaces (or “blacklisting”) final rule, which would have threatened federal contractors’ due process rights, injected unwarranted subjectivity and added needless and duplicative layers of bureaucracy and costs into the federal acquisition process.

The blacklisting final rule required federal contractors and subcontractors for the first time to report for public disclosure on the Federal Awardee Performance and Integrity Information System any “violations” of 14 federal labor and employment laws and state equivalents within the preceding three-year period, as well as a promise to disclose future violations with reports filed every six months, as a condition of winning a federal procurement exceeding $500,000.

In a concurrent guidance issued by the U.S. Department of Labor, federal contractors were required to disclose any “administrative merits determination, arbitral award or decision or civil judgment,” as defined in the guidance issued by the DOL.  The final rule directed each federal agency’s contracting officers to determine if a company’s reported violations of the identified labor laws render such offerors “nonresponsible” based on “lack of integrity and business ethics,” in consultation with new federal agency labor compliance advisors.

ABC was an outspoken critic and opponent of the illegal blacklisting rule from when it was first proposed on July 31, 2014, via President Obama’s Executive Order 13673. On Oct. 24, 2016, implementation of most of the rule’s onerous and duplicative reporting and disclosure requirements were temporarily blocked when a U.S. District Court judge ruled in favor of ABC’s lawsuit requesting a preliminary injunction.

The 115th Congress, passed resolution H.J. Res. 37, which President Trump signed into law on March 27, 2017, utilizing the Congressional Review Act to block the blacklisting final rule from taking effect and prevent future administrations from promulgating a similar regulation—essentially permanently eliminating the final rule via regulatory or executive action unless it is passed by a future Congress and signed into law by the president.

On Nov. 6, 2017, three federal agencies issued a final rule amending the Federal Acquisition Regulation to withdraw the blacklisting final rule and rescind President Obama's Executive Order 13673. Additionally, the U.S. Department of Labor withdrew the corresponding guidance document.

Since then, blacklisting advocates have unsuccessfully attempted to convince Congress to pass legislation circumventing the 115th Congress’ successful use of the Congressional Review Act to kill the rule.

Desired Outcome

In the 118th Congress, we expect blacklisting advocates to continue to support legislation and similar Biden administration regulations promoting blacklisting policies. Any efforts will be met with staunch opposition from ABC and the ABC-led coalition of federal contractor stakeholders.

CHIPS Act

Status

In July 2022, Congress enacted the CHIPS Act of 2022 (Division A of P.L. 117-167), which was signed into law by President Biden on Aug. 9, 2022.

The act appropriates funding for the CHIPS for America provisions enacted in Title XCIX of the William M. “Mac” Thornberry National Defense Authorization Act for Fiscal Year 2021 (2021 NDAA, P.L. 116-283). It also revised the 2021 NDAA CHIPS provisions and established three additional funds to support efforts that seek to address semiconductor-related challenges in defense, workforce and education, and international technology security and innovation. In total, the act appropriates $52.7 billion for semiconductor manufacturing, research and development, workforce training and education, and collaboration and coordination with allied and other friendly countries for FY2022-FY2027.

Of interest to the construction industry, the CHIPS Act establishes and appropriates $39 billion to a CHIPS for America Fund to bolster semiconductor manufacturing capacity in the United States by providing financial incentives for building, expanding and equipping domestic fabrication facilities and companies in the semiconductor supply chain. The fund also provides $11 billion for semiconductor R&D activities at the National Institute of Standards and Technology and in partnership with U.S. industry through a National Semiconductor Technology Center, a National Advanced Packaging Manufacturing Program and the establishment of up to three Manufacturing USA institutes.

In addition, a key piece of the CHIPS Act is a new tax credit with a $24 billion price tag. The Advanced Manufacturing Investment Credit is equal to 25% of eligible investment projects and incentivizes building and expanding domestic semiconductor manufacturing facilities.

The tax credit will provide a direct-pay, refundable credit for facilities with a primary purpose of making semiconductors or semiconductor manufacturing equipment. It applies to tangible property that can be amortized and depreciated that is placed in service between Jan. 1, 2023, and Dec. 31, 2026. Projects already underway may qualify.

Desired Outcome

Applicants seeking CHIPS Act funding must develop a Construction Workforce Plan to recruit, hire, train and retain a diverse and skilled construction workforce and deliver a project on time.

To purportedly achieve this goal, both NOFO's strongly encourage applicants to require controversial project labor agreements. The strong push for CHIPS Act funding applicants to mandate anti-competitive and inflationary PLAs on CHIPS Act projects undermines congressional authority because no such language was included in the CHIPS Act legislative text. An ABC-led coalition of construction industry stakeholders fought hard to keep PLA mandates out of the CHIPS Act.

Contractors and developers must also be aware that Davis-Bacon prevailing wage requirements apply to all CHIPS Act-funded construction projects. This presents additional compliance risks, increased costs and may discourage competition from small businesses and large businesses unfamiliar with Davis-Bacon Act regulations that are typically limited to government-procured and financed projects.

It is ABC’s hope that merit shop contractors have an opportunity to participate in CHIPS production without undue regulatory burdens. Visit ABC’s CHIPS resources and guidance webpage for more information.

Davis-Bacon Act/Prevailing Wage

Status

President Biden’s March 2021 American Jobs Plan called on Congress to tie federal investments in infrastructure to prevailing wage regulations via the ABC- opposed  1930s era Davis-Bacon Act.

On Nov. 15, President Biden signed into law the Infrastructure Investment and Jobs Act (H.R. 3684) which includes an expansion of Davis-Bacon requirements. As the bill made its way through Congress, ABC continued to advocate for merit shop priorities in the legislation, ultimately remaining neutral on the passage of the IIJA.

In addition, ABC opposed the House-passed America COMPETES Act (H.R. 4521), as well as the Senate-passed version that includes prevailing wage expansion. ABC supported an amendment to remove the flawed and inflationary Davis-Bacon prevailing wage requirements from the Senate bill, but it unfortunately failed. As the bill made its way through conference, ABC advocated against anti-competitive provisions.

The partisan 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. However, a new policy in 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.

Further, the White House Task Force on Worker Organizing and Empowerment’s report and recommendations to President Biden urge the DOL to consider automating some of its enforcement of Davis-Bacon prevailing wage requirements, suggesting the agency use “bots” to review and compare prevailing wages to “actual weekly certified payroll data.”

On March 18, 2022, the DOL issued a proposed rule that would ”modernize” the Davis-Bacon Act and related regulations. Despite its stated purpose, the rulemaking would instead reverse course by undoing the Reagan administration reforms, making union rates more likely to be adopted as prevailing wages, and expanding prevailing wage requirements to cover certain prefabrication work, transportation and flaggers, among other concerns.

ABC filed a 60-day extension request to provide adequate time to thoroughly analyze the rulemaking and assist affected ABC members with their comment letters. The request was denied by the DOL.

ABC also surveyed contractor members to gather insights on the potentially harmful impacts of this proposal and utilized the data gathered in its comment letter, which was filed on May 17.

In nearly 70 pages of comments on the proposed rule, ABC opposed and provided feedback on many of the more than 50 significant changes in the proposed rule.

On Aug. 23, the U.S. Department of Labor officially published its final rule, Updating the Davis-Bacon and Related Acts Regulations, in the Federal Register. The regulation’s drastic revisions to existing rules regarding government-determined prevailing wage rates that must be paid to construction workers on federal and federally assisted construction projects funded by taxpayers will now take effect on Oct. 23.

ABC issued a statement opposing the new rule, which all contracts entered into after Oct. 23 will be subject to. 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.

On Nov. 7, ABC and the Southeast Texas Chapter announced  the filing of a complaint  in the U.S. District Court for the Eastern District of Texas, challenging the DOL’s final rule.

For more information on the final rule, see ABC’s previous Newsline article, ABC general counsel Littler Mendelson’s analysis and ABC’s online resources at abc.org/davisbacon.

ABC also held a members-only webinar on the final rule on Aug. 21, and the recording is now available on ABC’s Academy.

Desired Outcome

ABC supports the full repeal of the Davis-Bacon Act (H.R. 720 ) as well as any state and local prevailing wage laws that mandate wage and benefit rates. In the absence of full repeal of the Davis-Bacon Act and state prevailing wage laws, ABC also continues to support legislative and regulatory reform efforts designed to mitigate its negative effects on industry and taxpayer stakeholders and failure to reflect the current market rate. ABC opposes expansion of Davis-Bacon and state and local prevailing wage laws into areas of public and private projects in which it has not been previously mandated.

Fair and Open Competition on Taxpayer-Funded Federal and Federally Assisted Construction Projects

•  Oppose President Biden’s Pro-PLA Executive Order 14063

Status

On Feb. 4, 2022, President Biden signed Executive Order 14063, which requires PLAs on all federal construction contracts of $35 million or more, with limited and rare exceptions. On Dec. 22, 2023, the Biden administration published a long-awaited Federal Acquisition Regulatory Council’s final rule, Use of Project Labor Agreements for Federal Construction Projects, and a related White House Office of Management and Budget Memo.

Effective Jan. 22, 2024, the Biden rule replaced President Obama’s Feb. 2, 2009, Executive Order 13502 and related regulations, which encouraged federal agencies to mandate PLAs on large-scale federal construction projects exceeding $25 million in total value on a case-by-case basis, and permitted states and localities to mandate PLAs on federally assisted projects.

ABC expects the Biden administration’s final rule to affect about 180 federal contracts of $35 million or more valued at a total of $14 billion to $16 billion per year. Independent of the final rule, the Biden administration is also pushing PLA mandates and preferences on more than $260 billion worth of federal agency grant programs for federally assisted infrastructure, clean energy and manufacturing construction projects.

ABC condemned the Biden administration’s pro-PLA policies, 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 ABC submitted on Oct. 18, 2022, to the FAR Council opposing the rule. In addition, more than 50 members of Congress, 19 governors, 22 construction industry anti-PLA coalition members and a dozen taxpayer advocates submitted comments to the FAR Council opposing the rule, urging the administration to withdraw its proposed rule and other Biden administration schemes pushing government-mandated PLAs on federal and federally assisted construction projects.

Additionally, ABC sent the White House a letter on April 6, 2022, 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.

ABC slammed the EO, the proposed rule and the final rule in statements picked up in dozens of publications nationwide, including a Feb. 9, 2022, op-ed in the Wall Street Journal and a Jan. 4, 2024, op-ed in Fox Business: “This anti-competitive and costly executive order rewards well-connected special interests at the expense of hardworking taxpayers and small businesses who benefit from fair and open competition on taxpayer-funded construction projects.”

ABC is currently evaluating legal options to challenge the Biden administration’s anti-competitive and costly EO policy and individual PLAs on federal and federally assisted construction contracts. For more information, please visit abc.org/bidenplafaqs.

Desired Outcome

Because government-mandated PLAs increase costs 12% to 20%, a record 89.3% of the U.S. construction workforce does not belong to a union and the construction industry will need to attract more than 500,000 additional workers on top of the normal pace of hiring in 2024 to meet the demand for labor, the Biden administration would be best served by promoting inclusive, win-win policies that welcome all of America’s construction industry to realize the full potential of federal taxpayer investments to rebuild our nation’s crumbling infrastructure. Doing so will increase accountability and competition and reduce waste and favoritism in the procurement of public works projects.

ABC has activated a grassroots campaign urging members of the House and Senate to co-sponsor the Fair and Open Competition Act (H.R.1209/S.537), which would prevent the federal government from mandating PLAs as a condition of winning federal or federally assisted construction contracts. It received 117 co-sponsors in the House and 27 in the Senate in the 118th Congress, as of Feb. 14, 2024.

On July 12, 2023, FOCA passed out of the House Committee on Oversight and Accountability by a vote of 22-20, and, as a result, the window for House FOCA co-sponsorship is expected to close in early 2024.

ABC members are encouraged to visit the ABC Action Center and urge their members of Congress to support FOCA.

Visit freeenterprisealliance.org/foca to learn more and take action.

In addition, visit BuildAmericaLocal.com, a coalition website where the public can learn more and communicate with their elected officials about government-mandated PLAs.

•  The Biden administration’s White House Task Force on Worker Organizing and Empowerment

Status

On Feb. 7, 2022, the Biden administration’s White House Task Force on Worker Organizing and Empowerment issued its report on how to boost union membership in the federal government and public and private sectors. The report offers nearly 70 recommendations to promote pro-union policies and practices in the federal government, including the use of PLAs and other policies that would reduce competition and increase costs.

ABC stated, “The report’s recommendations to expand the use of anti-competitive and costly PLAs  will increase infrastructure project costs by 12% to 20%, reduce competition from the best quality public works contractors and exacerbate the construction industry’s skilled labor shortage by discriminating against the nearly 9 out of 10 members of the construction workforce who choose to be union-free.”

Combined with President Biden’s Feb. 4 executive order requiring PLAs on federal contracts exceeding $35 million, it is clear that the Biden administration will not create opportunities for all construction workers, small businesses and experienced contractors who build America safely, on time and on budget.

Desired Outcome

ABC will monitor actions resulting from the report and will continue to urge members of Congress and the Biden administration to promote inclusive, win-win policies that will increase accountability and competition while reducing waste and favoritism in the procurement of public works projects. ABC wants everyone in the construction industry to have the opportunity to rebuild our nation’s crumbling infrastructure. It will take the entire construction workforce to realize the full potential of the Infrastructure Investment and Jobs Act and other new laws making significant investments in America’s infrastructure.

FTC Proposed Ban on Noncompetes

Status

On April 23, the Federal Trade Commission voted 3-2 to issue its final rule to ban noncompete clauses. The final rule will become effective 120 days after publication in the Federal Register.

According to the FTC, under the new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule’s effective date. Existing noncompetes for senior executives can remain in force, but employers are banned from entering into or attempting to enforce any new noncompetes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them. To learn more about the final rule and what happens next, read ABC general counsel Littler Mendelson’s analysis.

ABC issued a news release opposing the rule:

“The final rule to ban all noncompete agreements nationwide—except existing noncompetes for senior executives—is a radical departure from hundreds of years of legal precedent,” said Ben Brubeck, ABC vice president of regulatory, legal and state affairs. “Ultimately, this vastly overbroad rule will invalidate millions of reasonable contracts—including construction project contracts—around the country that are beneficial for both businesses and employees.”

As ABC argued in its comments submitted April 19, 2023, in opposition to the FTC’s unprecedented proposal to ban noncompete agreements:

  • The FTC lacks the statutory and constitutional authority to issue this rulemaking
  • Noncompete agreements are appropriately regulated at the state level
  • The proposed rule violates the Administrative Procedure Act
  • A blanket ban on noncompete agreements will harm the construction industry overall, especially small businesses

ABC also joined the U.S. Chamber of Commerce and 280 business groups in submitting comments urging the FTC to rescind the proposed rule in April 2023.

Desired Outcome

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, forcing companies to rework their compensation and talent strategies.

Health Care

Status

Providing quality health care benefits is a top priority for ABC and its member companies.

ABC advocates for policies that would ensure employer-sponsored coverage is strengthened and remains a viable, affordable option for millions of hardworking Americans and their families.

ABC, as a member of the Partnership for Employer-Sponsored Coverage, encourages Congress to consider the following principles and priorities that are important for ensuring employment-based health coverage thrives:

  • Preserve and strengthen employer-sponsored health coverage;
  • Address medical costs and challenges to help keep coverage affordable;
  • Uphold the current tax-treatment of employer-sponsored coverage;
  • Provide employers with compliance relief from burdensome regulations governing health coverage; and
  • Promote innovations and diversity of plan designs and offerings for employees.

ABC will continue to oppose:

  • Federal government mandates that force employers to offer a certain level of health care coverage or be subject to penalties,
  • Government takeover of the health care system that would end employer-sponsored health care coverage and impose new tax mandates on employers and employees, and
  • Tax increases that could hinder reinvestment and job creation in the construction industry.

Desired Outcome

ABC looks forward to working with the 118th Congress in a bipartisan manner to develop and implement health care policies.

Government-Mandated Project Labor Agreements

Overview

Anti-competitive and costly government-mandated project labor agreements end open, fair and competitive bidding on contracts to build taxpayer-funded construction projects. Government-mandated PLAs discourage merit shop contractors from bidding on taxpayer-funded construction contracts and drive up costs by 12% to 20%, which results in fewer infrastructure improvements and reduced construction industry job creation.

ABC Supports:

  • The Fair and Open Competition Act (H.R.1209/S.537), introduced by Rep. James Comer, R-Ky., and Sen. Todd Young, R-Ind., which would prevent the government from mandating a PLA as a condition of winning federal or federally assisted construction contracts.
  • Legislative or executive measures to preserve fair and open competition on public construction contracts requiring government neutrality regarding a contractor’s use of a PLA.
  • Federal and federally assisted construction contracts awarded based on sound and credible criteria, such as quality of work, experience and cost—not a company’s union affiliation or willingness to execute a PLA.

ABC Opposes:

  • Government-mandated PLAs and discriminatory PLA preferences on federal and federally assisted construction projects via President Biden’s Executive Order 14063 and related regulations and policies.
  • Claims by PLA proponents that government mandates and preferences for PLAs will improve the economy and efficiency in federal, state or local government contracting.

Background

A PLA is a project-specific collective bargaining agreement with multiple unions that is unique to the construction industry. The National Labor Relations Act permits construction employers to execute a PLA voluntarily, but when a PLA is mandated by a government agency, construction contracts can be awarded only to contractors and subcontractors that agree to the terms and conditions of the PLA.

Typically, PLAs force contractors to recognize unions as the representatives of their employees on a job; use the union hiring hall to obtain workers; hire apprentices exclusively through union apprenticeship programs; pay fringe benefits into union-managed benefits and multi-employer pension programs; and obey the unions’ restrictive and inefficient work rules and job classifications. PLAs force employees to pay union dues, accept unwanted union representation and forfeit benefits earned during the life of a PLA project unless they join a union and become vested in union benefits plans.

On Feb. 4, 2022, President Biden signed Executive Order 14063, which requires PLAs on all federal construction contracts of $35 million or more, with limited and rare exceptions.

On Dec. 18, 2023, President Biden announced a final rule implementing the PLA mandate on federal projects over $35 million .and the related Dec. 18, 2023, White House Office of Management and Budget Memo.  ABC issued a statement in response to the President’s announcement expressing plans to challenge the new rule in court:

Effective Jan. 22, 2024, the Biden rule replaced President Obama’s Feb. 2, 2009, Executive Order 13502 and related regulations, which encouraged federal agencies to mandate PLAs on large-scale federal construction projects exceeding $25 million in total value on a case-by-case basis, and permitted states and localities to mandate PLAs on federally assisted projects. Federal agencies are now requiring every prime contractor and subcontractor on a federal construction project of $35 million or more performed within the United States to sign a PLA as a condition of winning a taxpayer-funded contract.

Prior to this, on Oct. 18, 2022, ABC filed extensive formal comments in response to the FAR Council’s proposed rule.

ABC’s opposition to the FAR Council’s proposed rule was shared by more than 50 members of the U.S. House and Senate, 19 Republican governors and a diverse coalition of construction industry, small business and taxpayer advocates urging the administration to withdraw its proposed rule and other Biden administration schemes pushing government-mandated PLAs on state and local government construction projects receiving federal assistance via $260 billion in federal agency infrastructure grant programs (visit abc.org/PLAGrants to learn more).

Learn more about government-mandated PLAs and Biden administration pro-PLA policies via ABC’s 2024 FAQ document and coalition website at BuildAmericaLocal.com.

According to a September 2022 survey of ABC contractor members, 98% oppose this proposed rule. Additionally, 97% said a construction contract that required a PLA would be more expensive compared to a contract procured via fair and open competition, 99% said they were less likely to bid on a taxpayer-funded construction contract if the bid specifications required the winning firm to sign a PLA with labor unions and 97% of respondents said that government-mandated PLAs decrease economy and efficiency in government contracting.

ABC also issued an action alert that members can use to urge members of Congress to cosponsor the Fair and Open Competition Act to help fight the final rule and restore fair and open competition on federal and federally assisted construction projects.

Previously, the Obama administration repealed former President George W. Bush’s Executive Orders 13202 and 13208, which maintained government neutrality in federal contracting from 2001 to 2009 by prohibiting the government from requiring contractors to adhere to a government-mandated PLA as a condition of winning more than $147 billion worth of federal construction contracts and hundreds of billions of dollars’ worth of federally assisted construction contracts.

In response to the threat of Obama administration PLA requirements, 29 states enacted legislation or executive orders restricting PLA requirements and preferences on state and local projects since 2011. Currently, 25 states have measures similar to the Bush orders that guarantee fair and open competition on taxpayer-funded construction projects.

Contracts subject to government-mandated PLAs steer work to unionized contractors and their unionized workforces, which comprise just 10.7% of the U.S. private construction workforce, according to 2024 U.S. Bureau of Labor Statistics data. Therefore, PLA requirements deny opportunity to almost 9 out of 10 of the nation’s private construction workers.

PLA requirements and PLA preferences on taxpayer-funded contracts expose procurement officials to intense political pressure, disrupt local collective bargaining agreements, stifle competition, create contracting and construction delays and legal challenges and prevent taxpayers from receiving the best possible construction product at the best possible price.

Immigration Reform

Status

On Feb. 18, 2021, Sen. Bob Menendez, D-N.J., and Rep. Linda Sanchez, D-Calif., introduced the U.S. Citizenship Act of 2021 (H.R. 1177/S. 348) to implement President Biden’s proposal on immigration reform. ABC is concerned that this proposal largely ignores the drivers of illegal immigration and the enforcement needed to prevent the circumvention of our nation’s borders and immigration laws over the coming years. The legislation seeks to create a pathway to citizenship for more than 11 million undocumented immigrants in the United States, including those currently authorized to legally live and work in the country through the Deferred Action for Childhood Arrivals program and temporary protected status designation.

House and Senate Democrats also attempted to include immigration reforms that would provide a pathway to citizenship for undocumented immigrants through the budget reconciliation process. Those attempts were, however, found in violation of the Senate’s Byrd rule and rejected by the Senate parliamentarian.

Desired Outcome

ABC believes any proposal that is to pass Congress must implement bipartisan solutions to fix our nation’s failing immigration system. While ABC has advocated for permanent protections of DACA and temporary protected status recipients that contribute to the country’s workforce and economy, including the more than 100,000 in the construction industry, comprehensive immigration reform must include necessary improvements to our country’s visa system that anticipates the future flow of immigrants to the United States and eliminates incentives for individuals to illegally enter the country in search of work opportunities. Despite the impacts of the COVID-19 pandemic on our industry, construction continues to face worker shortages that have numbered in the hundreds of thousands each year. Providing employers with a flexible visa system that allows sufficient access to permanent and temporary foreign workers must be included in any final proposal to fix our immigration system.

Currently, the best employment-based visa program available for the construction industry continues to be the H-2B visa program, which allows foreign nationals into the United States to perform temporary, nonagricultural work. However, the program can often be a tedious, time-consuming, expensive process for many contractors. It typically caps its visas at 66,000 per year, though Congress has allowed for supplemental cap increases, including the authority to issue more than 130,000 in 2020. In 2020, though, only 3,854 of these H-2B visas were certified for construction laborers.

The departments of Homeland Security and Labor recently released a new H-2B visa rule authorizing 35,000 supplemental temporary work visas for hiring through Sept. 30. As of May 18, employers can begin petitioning for the visas. The supplemental allocation includes 23,500 visas for returning workers who received an H-2B visa in the previous three fiscal years. Another 11,500 are designated for nationals of El Salvador, Guatemala, Honduras and Haiti, to address irregular migration from those countries. However, the rule also added a requirement to contact AFL-CIO if the occupation is traditionally or customarily unionized. The Office of Foreign Labor Certification posted a list of occupations that need to comply with the requirement, including construction.

ABC supports the Workforce for an Expanding Economy Act (H.R. 4288), introduced by Rep. Lloyd Smucker, R-Pa., to help address the workforce needs of the construction industry. This legislation would create a new visa program, capped at 85,000 positions annually, to help address the workforce needs of the construction industry by providing critical access to temporary workers.

The enforcement of our nation’s immigration laws will also be crucial in preventing future illegal immigration into the United States and holding those who violate immigration policies accountable.

Independent Contractors

Status

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

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

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

On Jan. 9, the U.S. Department of Labor’s Wage and Hour Division announced the final rule on Employee or Independent Contractor Classification Under the Fair Labor Standards Act, which rescinds the ABC-supported 2021 final rule and replaces it with a confusing multifactor analysis to determine whether a worker is an employee or an independent contractor.

Immediately following the release of the 2024 final rule, ABC issued a statement opposing it, saying "it will cause workers who have long been properly classified as independent contractors in the construction industry to lose opportunities for work."

On Jan. 10, ABC, its Southeast Texas chapter, the Coalition for Workforce Innovation and the Financial Services Institute filed a motion in the U.S. Court of Appeals for the 5h Circuit requesting that it lift the stay of appeal and remand the case to the U.S. District Court for the Eastern District of Texas, Beaumont Division so that the district court may consider whether the 2024 final rule complies with the Administrative Procedure Act in its attempt to rescind and replace the current 2021 final rule. In 2022, the district court found that the DOL violated the APA when it first attempted to delay, and latter attempted to withdraw the 2021 final rule; the court vacated these efforts.

“The Biden administration cannot be allowed to undermine flexible work opportunities for millions of Americans who choose to work independently,” said Ben Burbeck, ABC vice president of regulatory, labor and state affairs. Read the business coalition’s statement.

Learn more about the 2024 final rule. Also, watch the ABC-members only archived webinar in the Academy, "Learn What the DOL's Final Independent Contractor Rule Means for ABC Members."

Desired Outcome

Independent contractors are an essential lifeline to the construction industry, and any effort by the DOL to undermine that status will likely be challenged by the coalition of which ABC is a part.

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