ABC Regulatory Roundup
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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 went into effect on Jan. 1, 2024, for certain employers and OSHA intends to make much of the data it collects publicly available online.
In a press release, ABC announced its opposition to the final rule. “Unfortunately, the Biden administration is moving forward with a final rule that does nothing to achieve OSHA’s stated goal of reducing injuries and illnesses,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Instead, the final rule will force employers to disclose sensitive information to the public that can easily be manipulated, mischaracterized and misused for reasons wholly unrelated to safety, as well as subject employers to illegitimate attacks and employees to violations of their privacy.”
What does the final rule do?
In June 2022, ABC submitted comments urging OSHA to withdraw the proposed rule.
More Information:
Heat Injury and Illness Prevention in Indoor and Outdoor Settings
On July 2, 2024, the U.S. Department of Labor’s Occupational Safety and Health Administration issued its Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings proposed rule. OSHA’s proposed rule would apply to all employers conducting outdoor and indoor work in all general industry, construction, maritime and agriculture sectors where OSHA has jurisdiction and require employers to develop programs and implement controls to protect employees from heat hazards. Read ABC’s release on the proposed rule.
Elements of the proposal include the following:
OSHA is giving the public 120 days to submit written comments on the proposal after publication in the Federal Register, which will likely occur in the next couple of weeks. ABC will be submitting detailed comments.
OSHA resources on the proposed rule:
Background:
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 protect 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. On Sept. 29, OSHA issued new resources to protect workers from the effects of heat.
In December 2023, ABC submitted comments as a steering committee member of the Construction Industry Safety Coalition and the Coalition for Workplace Safety in response to OSHA’s potential standard for Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings following its review of the Small Business Advocacy Review Panel materials and the SBAR Panel’s final report. In September, the SBAR Panel hosted six video conferences to gather input from small entity representatives. An ABC member participated as a SER during one of the video conferences. The panel’s final report was issued on Nov. 3.
ABC strongly supports worker safety and protection from heat injury and illness, while maintaining flexibility for the fluid nature of the construction environment. Employers play a key role in providing training and awareness regarding heat protection, and ABC will continue to support members in ensuring preparedness for heat-related issues through a wide range of resources.
Worker Walkaround Representative Designation Process
On May 21, ABC joined the U.S. Chamber of Commerce and a coalition in business groups in filing a lawsuit in the U.S. District Court for the Western District of Texas, Waco Division against the U.S. Department of Labor’s Occupational Safety and Health Administration’s Worker Walkaround Representative Designation Process final rule. Read the news release announcing the lawsuit.
Effective on May 31, the final rule will allow employees to choose a third-party representative, such as an outside union representative or community organizer, to accompany an OSHA safety inspector during site inspections, regardless of whether the workplace is unionized or not.
Now, construction employees and employers could face serious safety concerns because the final rule has the potential to allow anyone on a jobsite. There simply is no business case for this final rule and no benefit during a compliance inspection.
By allowing outside union agents access to nonunion employers’ private property, OSHA is injecting itself into labor-management disputes and casting doubt on its status as a neutral enforcer of the law. This final rule negatively impacts the rights of employers while simultaneously ignoring the rights of the majority of employees who have not authorized a union to represent them. OSHA’s rule also poses unnecessary risk to the individual joining the inspection and others on the jobsite if the authorized person is not trained to safely walk a construction jobsite. The rule does not include any requirement that the authorized person be equipped or conduct themselves to the same standards as OSHA safety inspectors. Further, the final rule fails to answer who is legally responsible if the third party gets injured during the inspection or harms someone else.
In addition to the lawsuit, on May 17, ABC, as a steering committee member of the Coalition for Workplace Safety, and 57 other employer organizations sent a letter to members of the U.S. House of Representatives urging them to pass Rep. Mary Miller’s, R-Ill., Congressional Review Act resolution to nullify the final rule.
The CWS letter states, “The resolution is vital to safeguarding the mission of workplace health and safety inspections. Without this legislation, OSHA CSHOs will be forced into an impossible position of policing labor disputes, for which they are simply unequipped. It would protect employers against individuals looking to further their own agendas and safeguard their property rights. It would also protect workers’ right to have their voice heard when determining workplace representation.”
Background on the final rule:
On March 29, OSHA announced its Worker Walkaround Representative Designation Process final rule and ABC issued a news release opposing the rule.
OSHA Resources on the final rule:
On Nov. 13, 2023, ABC submitted comments urging the DOL to withdraw its Worker Walkaround Representative Designation Process proposed rule. ABC also signed on to comments submitted by the Coalition for Workplace Safety and Construction Industry Safety Coalition.
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.
According to the regulatory agenda, the final rule is slated for December 2024..
Personal Protective Equipment in Construction
On July 20, 2023, OSHA issued a proposed rule clarifying the requirements for the fit of personal protective equipment in construction. Read the DOL’s press release.
On Sept. 18, ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments to OSHA in response to the PPE proposed rule and urged the agency to clarify what it means by the terms “properly fit” and “additional hazards” and that the clarification includes specificity so that covered industries better understand their compliance obligations. In addition, the CISC urges OSHA to clarify how it will enforce this regulation and delineate objective measures regarding what constitutes “improper fit.”
Powered Industrial Truck Design Standard Update
On May 17, 2022, ABC, as a steering committee member of CISC, submitted comments to OSHA voicing compliance and cost concerns on the proposed rule on powered industrial trucks design standard update.
According to the regulatory agenda, OSHA plans to issue a final rule in 2024.
Welding in Construction Confined Spaces
In 2025, 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.
According to the regulatory agenda, OSHA plans to issue an interim final rule in 2024.
Infectious Diseases
In 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.
Wage and Hour Division
Updating the Davis-Bacon and Related Acts Regulations
On Aug. 23, 2023 the U.S. Department of Labor officially published its final rule, Updating the Davis-Bacon and Related Acts Regulations, in the Federal Register. The regulation’s drastic revisions to existing rules regarding government-determined prevailing wage rates that must be paid to construction workers on federal and federally assisted construction projects funded by taxpayers took effect on Oct. 23.
ABC issued a statement opposing the new rule. All contracts entered into after Oct. 23 are subject to the new rule’s provisions. Additionally, in certain situations the rule may apply to existing contracts. This includes if a contract is changed to include substantial Davis-Bacon-covered work not within the scope of the original contract, if an option to extend a contract’s term is exercised and for ongoing contracts not tied to completion of a particular project.
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.
ABC issued a press release on the challenge, stating:
“Far from ‘updating’ the DOL’s enforcement of the Davis-Bacon Act, the final rule returns to failed policies of the 1970s and unlawfully expands coverage of prevailing wage requirements onto new projects and industries and increases its regulatory burden on small construction contractors working on federally funded contracts,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “The DOL’s final rule forces ABC to take legal action to address its numerous illegal provisions and protect its members, the free market and taxpayers from the devastating impacts of this regulation.”
ABC applauded a June 26, 2024, decision by the U.S. District Court for the Northern District of Texas granting a nationwide preliminary injunction that blocks some provisions in the U.S. Department of Labor’s final rule expanding the Davis-Bacon Act.
Associated General Contractors of America’s lawsuit asserted that the Biden administration lacks the legal authority to expand the law to cover manufacturing facilities miles away from projects and delivery truck drivers spending any amount of time on a jobsite, or to retroactively impose the measure on already-executed contracts, among other things. The court granted AGC’s motion for a nationwide preliminary injunction, temporarily blocking the AGC-challenged provisions.
“The preliminary injunction issued in response to AGC’s federal lawsuit is a victory for the construction industry and the rule of law. It strikes down the Biden administration’s effort to do an end-run around Congress via regulatory action that benefits special interests,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs.
“ABC’s pending federal lawsuit, filed in East Texas, targets other provisions in the DOL’s extreme overhaul of more than 50 Davis-Bacon Act regulations that undermine commonsense reforms put in place by the Reagan administration. We are hopeful ABC’s lawsuit will also prevail over the Biden administration’s regulatory overreach,” said Brubeck.
For more information on the final rule, see ABC’s previous Newsline article , ABC General Counsel Littler Mendelson’s analysis and ABC’s online resources at abc.org/davisbacon.
ABC also held a members-only webinar on the final rule on Aug. 21, and the recording is now available on the ABC Academy.
On Oct. 19, ABC member Mario Burgos testified on behalf of the association before the U.S. House Committee on Small Business to urge lawmakers to rein in the Biden administration’s inscrutable and burdensome wage determination practices under the Davis-Bacon and Related Acts.
On Nov. 15, Rep. Lloyd Smucker, R-Pa., introduced a resolution ( H.J. Res.103) under the Congressional Review Act providing for congressional disapproval of the final rule. Smucker’s Nov. 20 press release promoting the CRA highlights opposition from lawmakers, taxpayer watchdogs and dozens of construction industry groups to the rule. If a CRA joint resolution of disapproval is approved by both houses of Congress and signed by the president, or if Congress successfully overrides a presidential veto, the rule at issue cannot go into effect or continue in effect. Rep. Smucker’s CRA is not likely to succeed in the current Congress.
Further, the DOL has provided compliance resources on the final rule.
Independent Contractor
On March 25, 2024, the U.S. House of Representatives Committee on Education and the Workforce passed H.J. Res. 116, the Congressional Review Act resolution introduced by Rep. Kevin Kiley, R-Calif., providing for congressional disapproval of the rule submitted by the U.S. Department of Labor relating to Employee or Independent Contractor Classification Under the Fair Labor Standards Act , in a 21-13 vote. ABC sent a letter in support of the resolution to the committee ahead of the vote, urging members to report it for a full house vote. ABC also sent a letter to all members of the House and U.S. Senate urging them to pass the CRA to nullify the DOL’s rule, which went into effect on March 11.
On March 5, ABC, its Southeast Texas chapter, the Coalition for Workforce Innovation and five other organizations filed an amended complaint in the U.S. District Court for the Eastern District of Texas, arguing that the 2024 independent contractor final rule is unlawful and a violation of the Administrative Procedure Act. “Replacing the commonsense 2021 final rule was the wrong move by the DOL and has created an ambiguous standard for determining employee or independent contractor status under the Fair Labor Standards Act,” said ABC in the business coalition’s statement.
In January, ABC, its Southeast Texas chapter, CWI and the Financial Services Institute filed a motion in the U.S. Court of Appeals for the Fifth 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 so that the district court may consider whether the 2024 final rule complies with the APA 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 later 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 ABC inthe business coalition’s statement.
On Jan. 9, the DOL announced the independent contractor final rule, which rescinded the ABC-supported 2021 final rule and replaced it with a confusing multifactor analysis to determine whether a worker is an employee or an independent contractor. Immediately following the release of the final rule, ABC issued a statement opposing it, saying that "it will cause workers who have long been properly classified as independent contractors in the construction industry to lose opportunities for work.”
DOL resources on the final rule:
To learn more about the rule, watch the ABC-members only archived webinar in the Academy, "Learn What the DOL's Final Independent Contractor Rule Means for ABC Members."
Overtime
On June 28, 2024, the U.S. District Court for the Eastern District of Texas issued a decision in the Texas Attorney General's case challenging the U.S. Department of Labor's final rule on Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. The judge in the case issued a limited preliminary injunction blocking implementation of the rule for employees of the state of Texas only.
For the rest of the employer community in Texas and throughout the nation, the rule went into effect on July 1, which increases the minimum salary threshold for exemption to $43,888, and the threshold for highly compensated employees increases to $132,964.
Issued on April 23, the DOL’s new 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 increases from the current level of $107,432 to $132,964 on July 1, 2024, and then to $151,164 on Jan. 1, 2025. Salary thresholds will then be automatically updated every three years, regardless of economic circumstances. ABC issued a news release opposing the rule.
Overtime resources:
On May 22, ABC joined a coalition of business groups in filing a complaint in the U.S. District Court for the Eastern District of Texas, Sherman Division, challenging the DOL’s overtime rule. Read ABC’s news release announcing the lawsuit and learn more about the pending overtime lawsuits. ABC will continue to provide updates on any new developments regarding the pending legal challenges.
Virtually all of ABC’s members employ workers who qualify for exempt status, and like the unlawful 2016 overtime rule, the DOL’s 2024 rule will reclassify a substantial amount of ABC member employees who currently qualify for exempt status as nonexempt. 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.
In addition, the 2024 rule’s radical increase in the salary threshold for exemption will further complicate 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. The rule’s triennial automatic indexing provision will exacerbate the harmful impact on businesses and add to rampant inflation that is already harming the economy.
On Nov. 7, 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.
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 Dec. 14, 2023, the DOL issued the final rule, which is effective Feb. 12, 2024, and will apply to solicitations issued on or after the effective date of the final regulations issued by the Federal Acquisition Regulatory Council. Learn more about DOL’s final rule.
According to the regulatory agenda, the FAR Council plans to issue a proposed rule implementing DOL's regulations in December 2024.
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 is in effect for reports filed on or after Aug. 28, 2023.
In October 2022, ABC submitted a comment letterto 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 Dec. 14, 2023, the DOL’s Office of Apprenticeship announced a proposed rule that would make significant and controversial revisions to the National Apprenticeship System.
On Dec. 18, ABC issued a press release in response to the ABC-opposed proposal:
“ABC supports government-registered apprenticeship programs and offers more than 450 such education programs across the country as part of its all-of-the-above approach to meet the workforce needs of the construction industry,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “ABC is thoroughly reviewing the Biden DOL’s overreaching, 779-page proposal and is concerned that aspects of the proposed rule will limit the number of apprentices and employers participating in GRAPs.
“The misguided proposal will discourage employer participation in the GRAP system by adding more bureaucracy and paperwork requirements while also eliminating flexible competency-based approaches to workforce development that benefit apprentices and employers,” said Brubeck. “As currently written, the Biden’s proposal threatens to undermine significant investments recently made by taxpayers in infrastructure, clean energy and manufacturing projects procured by government and private owners.”
On June 17, 2024, the DOL sent the final rule to the Office of Information and Regulatory Affairs at the Office of Management and Budget for final review, the last step in the regulatory process before implementation. According to the regulatory agenda, the DOL plans to issue the final rule in August 2024.
Results from ABC’s February 2024 survey of contractors and ABC chapter GRAP providers confirmed that the proposed rule will strongly discourage GRAP participation, with 96% of respondents stating new recordkeeping and reporting requirements will make them less likely to participate in or start their own GRAP.
ABC’s 2024 analysis of DOL data found that construction industry GRAPs enrolled only 250,000 apprentices and graduated just 45,000 apprentices in 2023, confirming that current GRAP system is unable to meet construction industry workforce needs on their own.
On March 18, ABC submitted 45 pages of comments on the proposed rule and released a statement, criticizing the proposal’s limitations on flexibility and calling on the DOL to withdraw the rule’s concerning provisions. ABC members also submitted at least 1,450 unique comments opposing the rule via ABC’s grassroots campaign utilizing ABC’s Action app and Action Center.
ABC also signed comments submitted by the Jobs and Careers Coalition.
On March 6, Vice President Kamala Karris and U.S. Department of Labor Acting Secretary Julie Su announced President Joe Biden’s new Executive Order on Scaling and Expanding the Use of Registered Apprenticeships in Industries and the Federal Government and Promoting Labor-Management Forums, with the stated goal of expanding the usage of government-registered apprenticeship programs by the federal government. The order, as outlined in ABC’s Newsline article, directs federal agencies to identify where they can implement new requirements or incentives for federal contractors and recipients of federal financial assistance to employ workers who are active participants or graduates of a GRAP.
While specific details on how these new requirements will be implemented are not yet available until a rulemaking is completed, in a March 6 statement ABC expressed concerns that any new mandates or incentives on federal contracts and grants will reduce competition from contractors that choose not to participate in the GRAP system or lack access to these programs.
U.S. Department of Treasury
Inflation Reduction Act Prevailing Wage and Apprenticeship Regulations
On June 18, the U.S. Treasury Department’s Internal Revenue Service announced its final rule, which requires private developers to follow onerous project labor agreement, prevailing wage and apprenticeship policies when building clean energy projects funded by more than $270 billion in tax credits via the ABC-opposed Inflation Reduction Act. Read ABC’s news release opposing the final rule.
Unfortunately, many concerning provisions of the proposed rule flagged by industry and clean energy advocates during the comment period were not appropriately addressed in the final rule, which increases risk and uncertainty for developers seeking tax credits and contractors delivering these important projects. Coupled with construction materials inflation of more than 40% since February 2020 and a labor shortage, this Biden administration’s latest regulation means clean energy projects are much more expensive, and many of those projects will be mothballed or cancelled.
According to the final rule, developers must certify that their contractors pay all construction workers prevailing wages and benefits determined by the U.S. Department of Labor in accordance with the federal Davis-Bacon Act. Developers must also ensure that contractors utilize apprentices enrolled in government-registered apprenticeship programs for 15% of all construction labor hours performed on a project, among other requirements. Project developers that satisfy both of these new provisions are eligible for a 500% increase in various clean energy construction project tax credits compared to baseline tax credits offered to developers under prior regulations widely used by industry. In addition, developers that require contractors to execute PLAs with labor unions are immune from new monetary penalties if the developer and its contractors fail to meet cumbersome prevailing wage and apprenticeship rules.
Government-mandated PLAs box out almost 90% of the U.S. construction workforce that does not belong to union––an especially irresponsible decision when the construction industry faces a labor shortage of more than half a million people. In addition, PLA schemes increase costs 12% to 20% by imposing inefficient work rules and discouraging competition from quality contractors that have been successfully building clean energy projects for decades.
The final rule is effective 60 days after it is be published in the federal register on June 25, 2024, but developers are currently following the previous proposed rule requirements issued by the IRS.
In October 2023, ABC conducted a survey of contractor members regarding the proposed rule. In the survey, 98% of respondents stated that prevailing wage and apprenticeship mandates imposed by the Inflation Reduction Act will make them less likely to bid on clean energy projects. On Oct. 31, ABC utilized this survey data in comments to the U.S. Treasury Department’s Internal Revenue Service in response to the proposed rule. Read ABC’s news release on the comments.
ABC also led a coalition of 13 construction and business associations in comments urging the IRS to provide regulatory clarity and to abandon its illegal and coercive scheme to push clean energy project developers into requiring PLAs.
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 will be issuing additional detailed analysis in the coming weeks to complement the July 11 ABC members-only webinar on the final rule. In the interim, ABC members and developers are encouraged to review the IRS press release, IRS PWA Overview, IRS PWA Fact Sheet, IRS FAQs, and White House Fact Sheet. The U.S. DOL’s Prevailing Wage and the Inflation Reduction Act Overview and the U.S. Treasury and U.S. DOL Blog Post on Project Labor Agreements may be of additional interest.
Review additional 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 . Effective Jan. 22, 2024, following a multi-year rulemaking by the Federal Acquisition Regulatory Council, federal agencies are 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.
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.
On March 28, 2024 ABC and the Florida First Coast chapter filed suit against the federal government seeking to overturn the final rule. ABC’s complaint asserts that President Joe Biden lacks the legal and constitutional authority to impose the mandate as it will injure economy and efficiency in federal contracting and illegally steer construction contracts to certain unionized contractors. ABC issued a press release regarding the challenge, stating:
“ABC seeks a national injunction against President Biden’s executive overreach, which makes a mockery of federal procurement laws and rewards powerful special interests with government construction contracts at the expense of taxpayers and the principles of fair and open competition in government procurement,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “ABC has heard from large and small federal contractors—including firms signatory to union agreements—and concerned federal agency contracting officers that the Biden administration’s controversial PLA policy has already stifled competition and raised costs on federal construction contracts in Florida and across the country. This policy will continue to do so absent a successful legal challenge.”
ABC’s April 26, 2024, motion for preliminary injunction against the rule contains affidavits from 10 large and small nonunion and union federal contractors injured by this rule. ABC expects a ruling on the preliminary injunction in late July or early August.
ABC National staff and an ABC member testified at the June 27, 2024, U.S. House Oversight and Accountability Committee’s subcommittee hearing on the Biden/Harris administration’s controversial policies promoting and mandating PLAs on federal and federally assisted projects. As spotlighted in this recap, the hearing, “Cutting Competition in Contracting: The Administration’s Pricey Project Labor Agreement Mandate”—held by the Subcommittee on Cybersecurity, Information Technology, and Government Innovation—gave ABC an important platform to shed light on the Biden administration’s controversial pro-PLA policies.
Previously, on Oct. 18, 2022, ABC filed extensive formal comments in response to the FAR Council’s ABC-opposed Aug. 19, 2022 proposal.
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 via 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 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.
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.
According to the regulatory agenda, the FAR Council plans to issue the final rule in December 2024.
Cyberthreat and Incident Reporting and Information Sharing
On Oct. 3, 2023, the Federal Acquisition Regulatory Council issued a proposed rule on cyberthreat and incident reporting and information sharing aimed at implementing Executive Order 14028, Improving the Nation’s Cybersecurity.
The proposal, which would apply to contractors doing business with the federal government, would require contractors to take additional steps to ensure effective response to cybersecurity incidents and investigation of potential incidents. The proposal would also require contractors to provide federal law enforcement agencies as well as the contracting agency with full access to applicable information, information systems and contractor employees in response to any cybersecurity incidents.
The FAR’s attempt to standardize and enhance cybersecurity comes at the same time as the U.S. Department of Defense prepares to update its Cybersecurity Maturity Model Certification program, which will assess defense contractors’ compliance and implementation of cybersecurity requirements. The CMMC proposed rule was published on Dec. 26, 2023.
On Feb. 26, ABC joined the U.S. Chamber of Commerce and eight other groups in submitting comments on the proposed rule. The organizations called for more clarity (e.g., definitions), expressed concerns about costs and asked questions regarding capacity and other process and organizational issues. The comments urged flexible implementation of CMMC program requirements.
According to the regulatory agenda, the DOD plans to issue the final rule in November 2024.
ABC will continue to provide resources for complying with federal cybersecurity requirements, including a July 25 webinar on the CMMC available in the ABC Academy and a Cybersecurity Resources Guide.
National Labor Relations Board
Joint Employer
On July 19, 2024, the National Labor Relations Board moved to withdraw its appeal of the U.S. District Court for the Eastern District of Texas’ decision to vacate the 2023 Joint Employer final rule, which means the court’s favorable decision will become final. The Board had appealed the decision on May 7.
On March 8, the district court vacated the 2023 final rule. Under the court’s decision, the ABC-supported 2020 Joint Employer Final Rule, which provides clear criteria for companies to apply when determining their joint employer status, remains in effect today.
ABC issued a release stating, “We are pleased the Board decided to withdraw its appeal of the court’s decision and that the court’s ruling to block the NLRB’s radical and overbroad joint employer standard is now final,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “The 2023 final rule would have disrupted long-established, efficient operational processes that are followed by construction service providers who work together to build America. And it clearly would have had a harmful effect on a significant segment of the construction industry: small businesses.
“Because the ABC-supported 2020 final rule remains in effect, contractors will be better able to work and coordinate with multiple employers without fear of being unexpectedly and unfairly found to be joint employers,” said Brubeck. 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.
‘Ambush’ Election Rule
Despite years of litigation, the Biden administration’s NLRB has revived a controversial policy from the Obama era in the form of its Representation-Case Procedures final rule. The direct final rule, issued without notice or the opportunity to comment, essentially restores provisions of the “ambush” election rule of 2014 and rescinds the remaining ABC-supported provisions of the 2019 final rule. The rule applies to representation petitions filed on or after Dec. 26, 2023, and employers will have less time to respond to representation petitions. In response to this move, ABC stated:
“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.
More information:
Federal Trade Commission
Ban on Noncompete Agreements
On July 3, the U.S. District Court for the Northern District of Texas issued a limited preliminary injunction and stay of the Federal Trade Commission’s noncompete final rule, holding that the FTC exceeded its statutory authority and violated the Administrative Procedure Act. The Court limited the scope of the injunctive relief to named plaintiff Ryan LLC and plaintiff-intervenors the Chamber of Commerce of the United States of America; the Business Roundtable; the Texas Association of Business; and the Longview Chamber of Commerce.
“For any employer that was not a plaintiff or plaintiff-intervenor in the action, the noncompete rule is still set to take effect on Sept. 4, 2024, although the court’s opinion clearly casts doubt on the long-term viability of the noncompete rule,” said ABC general counsel Littler Mendelson’s analysis.
On May 14, ABC joined a broad group of trade associations in filing an amicus brief in support of plaintiffs’ request for injunctive relief against the Federal Trade Commission’s final rule to ban noncompete clauses.
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.
On April 23, the Federal Trade Commission voted 3-2 to issue its final rule to ban noncompete clauses.
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.
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.”
FTC Resources on the Final Rule:
To learn more about the final rule and what happens next, read ABC general counsel Littler Mendelson’s analysis.
In April 2023, ABC submitted comments in opposition to the FTC’s unprecedented proposal to ban noncompetes. ABC also joined the U.S. Chamber of Commerce and 280 business groups in submitting comments urging the FTC to rescind the proposed rule.
Environmental Protection Agency
Waters of the United States
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 theJanuary 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
National Environmental Policy Act Implementing Regulations Revisions Phase 2—A final rule to further revise NEPA regulations of federal environmental reviews was issued on May 1 and was scheduled to take effect July 1. ABC previously joined a coalition of trade associations in submitting comments opposing the rule, which will unnecessarily delay permitting for critical infrastructure projects. ABC also issued a press release condemning the final rule. Read more.
ABC will continue to provide updates on these and other rulemakings in Newsline.