AGC's Human Resource and Labor News - August 19, 2010 / Issue No. 4-10 (Print All Articles)

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AGC Persuades Corps of Engineers to Withdraw PLA Requirement

Solicitations requiring bidders on certain U.S. Army Corps of Engineers (USACE) construction projects to submit an executed project labor agreement (PLA) prompted AGC to write and call agency officials expressing strong concern.  On August 18, the agency called AGC to announce that it was withdrawing the PLA requirement and to thank AGC for educating them on the issue.

Solicitations requiring bidders on certain U.S. Army Corps of Engineers (USACE) construction projects to submit an executed project labor agreement (PLA) prompted AGC to write and call agency officials expressing strong concern.  On August 18, the agency called AGC to announce that it was withdrawing the PLA requirement and to thank AGC for educating them on the issue.

On August 12, AGC sent a letter to the USACE's Mobile District demanding information about the agency's justification for including a PLA mandate in a solicitation for the construction of an Air Force Technical Applications Center at Patrick Air Force Base in Florida. The letter questioned how it determined that the conditions listed in President Obama's executive order on PLAs were present. The requirement, along with similar mandates by other contracting agencies and information about pressure from higher in the Administration, also prompted AGC to send a letter calling on President Obama to protect contracting officers from such political pressure, and to send an "unmistakable and public" message that political appointees should not cross the line between politics and procurement.

AGC's letter to the USACE pointed out that the executive order leaves the agency free to refrain from requiring a PLA on the Patrick Air Force Base project and that it permits the agency to require a PLA only if the USACE has determined that all of the following conditions exist:

  1. The project will cost the federal government $25 million or more;
  2. Use of a PLA on the project will advance the federal government's interest in achieving economy and efficiency in federal procurement;
  3. Use of a PLA on the project will advance the federal government's interest in producing labor-management stability;
  4. Use of a PLA on the project will advance the federal government's interest in ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters; and
  5. Use of a PLA will be consistent with law.

The six-page letter sets out a number of specific issues that the agency should have considered in making its determination and points out the practical implications of government mandates for PLAs.  The letter also points out the possible repercussions of the agency's decision to require all offerors to negotiate and execute a PLA prior to submitting a bid on the project.

AGC raised similar issues in a second August 12 letter sent to high-ranking officials at USACE headquarters.  The letter urges the agency to exercise the broad latitude granted to it by the executive order and its implementing regulations to refrain from imposing any PLA mandates, and to direct its division and district commands to follow suit.  Given the political pressure to consider PLAs, AGC also provided the agency with a recommended approach for conducting a thorough, fact-based analysis of particular criteria for determining the appropriateness of a PLA mandate, demonstrating the many complications inherent in such mandates and the impediments that they present to achieving economy and efficiency in government procurement.

The letters are the latest of AGC's continuing efforts to educate government agencies about PLA issues and implications.  While AGC neither supports nor opposes PLAs in general, AGC strongly opposes government mandates for PLAs on publicly funded construction projects.  AGC is committed to free and open competition in all public construction markets and believes that publicly funded contracts should be awarded without regard to the lawful labor relations policies and practices of the government contractor.

For more information on PLAs, go to AGC's Labor & HR Topical Resources Web page, then select the category "Collective Bargaining" and subcategory "Project Labor Agreements."


Year-to-Date Collective Bargaining Results in Low and No Increases in Wages and Fringe Benefits

Collective bargaining settlements reported to the Construction Labor Research Council (CLRC) between January and June of this year resulted in an average first-year wage-and-benefits increase of $0.55 or 1.1 percent.  This is considerably lower than the $1.49 or 3.1 percent average increase reported for the comparable period last year.  The average second-year increase in newly negotiated multi-year agreements is $0.69 or 1.6 percent, and the average third-year increase is $1.01 or 2.2 percent.  These increases are also lower than those negotiated a year earlier, but by a smaller margin, according to CLRC.  As reported earlier in Human Resource & Labor News, wage-and-benefit increases negotiated in 2009 overall were the lowest in 13 years.

Collective bargaining settlements reported to the Construction Labor Research Council (CLRC) between January and June of this year resulted in an average first-year wage-and-benefits increase of $0.55 or 1.1 percent.  This is considerably lower than the $1.49 or 3.1 percent average increase reported for the comparable period last year.  The average second-year increase in newly negotiated multi-year agreements is $0.69 or 1.6 percent, and the average third-year increase is $1.01 or 2.2 percent.  These increases are also lower than those negotiated a year earlier, but by a smaller margin, according to CLRC.  As reported earlier in Human Resource & Labor News, wage-and-benefit increases negotiated in 2009 overall were the lowest in 13 years.

CLRC found widespread occurrences of small or zero increases during the period.  "Almost a quarter of new agreements were freezes or reductions, and about two-thirds were less than two percent," CLRC reported in its latest Wage amd Benefit Settlements Report.  "Similarly, about two-thirds of the first-year increases were less than one dollar.  Almost all second- and third-year increases were under three percent," CLRC said.  This is not surprising given the economy, nor is the shorter duration of newly negotiated contracts.  Most parties agreed to just one-year agreements, with the vast majority of the remainder agreeing to three-year agreements.

Of the 80 settlements covered by the report, 33 were from the East North Central Region, which covers Illinois, Indiana, Michigan, Minnesota, Ohio, west Virginia, and Wisconsin.   The average first-year increase in that region was about double the national average at $1.11 or 2.0 percent. 

The complete report - which provides an early indication of 2010 bargaining results and will be followed by further reports later this year -- is posted along with other CLRC reports on the Labor & HR Topical Resources page of AGC's website at www.agc.org/labor/topicalresources.  Select "Collective Bargaining" from the first pull-down menu and "Collective Bargaining Agreement Data" from the second for links to the reports.  For a searchable database of collectively bargained wage and fringe benefit rates, go to www.agc.org/cbrates

Collective bargaining AGC Chapters are reminded to kindly send all settlements information to CLRC promptly upon completion.  Information may be submitted by e-mail at clrc@clrc.biz, by fax to (202) 347-8442, or by mail to 1750 New York Ave., NW, Washington, DC  20006. 


AGC Union Contractors Exchange Views with Carpenters and Operating Engineers General Presidents at New England Regional Meeting

AGC held a regional meeting with the National Construction Alliance II (NCA II) - a partnership of the Carpenters and Operating Engineers unions - on August 4 in Boston, Mass..  Meeting participants discussed such issues as the multiemployer pension plan crisis, restrictive work rules and subcontracting clauses, increasing productivity, jurisdictional disputes, national heavy-highway agreements, and the NCA II unions' relationship with the AFL-CIO's Building and Construction Trades Department.

AGC held a regional meeting with the National Construction Alliance II (NCA II) - a partnership of the Carpenters and Operating Engineers unions - on August 4 in Boston, Mass..  Meeting participants discussed such issues as the multiemployer pension plan crisis, restrictive work rules and subcontracting clauses, increasing productivity, jurisdictional disputes, national heavy-highway agreements, and the NCA II unions' relationship with the AFL-CIO's Building and Construction Trades Department.

Members and Chapter staff from collective bargaining Chapters in the New England area and New York attended, along with Operating Engineers General President Vince Giblin, Carpenters General President Doug McCarron, AGC Union Contractors Committee Chairman Jim Clemens and Staff Associate Denise Gold, NCA II Executive Vice President Ray Poupore, and other labor representatives.  The meeting was AGC's fourth regional meeting with NCA II.  The meetings, which began last year, are intended to provide AGC Chapters with an opportunity to communicate directly with union leaders about contractors' local and regional concerns directly and to engage in a dialogue to solve problems together. 

The conversation began with a common concern raised by contractors at such meetings:  the unsustainable nature of the system currently used in the union sector for providing retirement benefits.  Giblin responded that much of the widespread fear is exaggerated and that defined benefit plans should be assessed individually.  Many are actually in good shape, he asserted, observing that the Operating Engineers Central Pension Fund - a large, national fund - is comfortably in the "green zone" because trustees have taken aggressive steps to recoup losses.  McCarron indicated greater concern about the industry's pension funding woes, noting that AGC and the trades have been working closely together to lobby for pension relief in Congress.  Echoing sentiments expressed by Giblin at prior meetings with AGC, and to the likely dismay of the contractors in attendance, McCarron stated that he favors a defined benefit model over a defined contribution model, because "people have a hard time taking care of their money."  Instead of shifting responsibility to the workers, plan trustees need to manage the funds better, he said.  They need to take an active role and make tough decisions.  One way to improve the situation is to merge plans to save on administration costs, both general presidents said. 

Contractors also appealed to the general presidents to help them find ways to be more cost-competitive.  McCarron reported on efforts to work with management consulting firm FMI to identify opportunities for increasing worker productivity.  "We're working together...to try to change the culture to improve productivity," said McCarron, and that increased productivity will lead to increased competitiveness. 

One contractor asserted that this is not enough and that what is needed in his area is relief on restrictive subcontracting and jurisdictional clauses.  He shared a recent experience in which the local union's refusal to grant relief caused loss of the entire job to open-shop contractors.  We need to look at these situations on a case-by-case basis, Giblin responded.  He added that, at the national level, NCA II has learned from recent job losses and has made accommodations where necessary to get a job and where strategically possible.  McCarron maintained that work preservation efforts like subcontracting clause concessions and  job targeting programs must be accompanied by "aggressive organizing of the subcrafts" to be successful.  He referenced the Carpenters' drywall industry organizing drive as an example.

Inefficient, outdated work rules are another hindrance to union contractor competitiveness, said one chapter executive.  Project labor agreements - which often include inefficient work rules - exacerbate the problem in the area, he said.  Also, out-of-towners often receive "sweetheart deals."  He suggested an "experiment" of suspending the work rules for a year.  McCarron said he thought that this was a good idea to try on a pilot project basis.

Reiterating statements made at prior AGC-NCAII meetings, the general presidents reported that they have no intention of reaffiliating with the BCTD at this time.  The BCTD's resolution to charter a new Carpenters union and similar threats are not the way to tempt the two unions to return, they said.

Another message espoused by the general presidents at prior meetings that arose again was the message that contractors may and should communicate directly with the general presidents' offices.  In the context of problems with labor trustees on Taft-Hartley fringe benefit funds, this is particularly important, Giblin noted, since management trustees have a fiduciary duty to protect the trust fund.  Both Giblin and McCarron expressed the view that they are "not typical" general presidents in that they are not as "hands-off" and that they have "zero tolerance for the nonsense."  Giblin closed the meeting with a commitment to return for further discussion in the future. 

No specific dates or locations are currently set for future AGC-NCAII regional meetings.  However, McCarron and Giblin will speak at AGC's Annual Convention on March 21, 2011, in Las Vegas, Nev..  All convention registrants are invited to attend.  For more information on the convention, go to http://convention.agc.org/.


NLRB Finds Regional Carpenters Council was Bound to National Construction Agreement and Plan for Settlement of Jurisdictional Disputes

The National Labor Relations Board has refused to rule on a jurisdictional dispute between the Carpenters and Laborers on a project covered by the National Construction Agreement (NCA), finding that all parties were bound to submit jurisdictional disputes to the Plan for the Settlement of Jurisdictional Disputes (Plan), despite claims by the Carpenters council that it was not so bound.

The National Labor Relations Board has refused to rule on a jurisdictional dispute between the Carpenters and Laborers on a project covered by the National Construction Agreement (NCA), finding that all parties were bound to submit jurisdictional disputes to the Plan for the Settlement of Jurisdictional Disputes (Plan), despite claims by the Carpenters council that it was not so bound.

The case concerns a dispute over scaffolding tending work at the REC Silicon Plant expansion project in Moses Lake, Wash., in 2009. Fluor Constructors was the general contractor on the project and was signatory to the NCA, a project labor agreement (PLA) between the Building & Construction Trades Department, AFL-CIO, (BCTD) and the North American Contractors Association, for the project.  Fluor awarded scaffolding work to Brand Energy Services, and Brand became signatory to the NCA.  Brand was already signatory to an area agreement with the Pacific Northwest Regional Council of Carpenters (Regional Carpenters) covering Washington.  NRCC was not signatory to the NCA, but the United Brotherhood of Carpenters (UBC) international was signatory.  The Laborers International Union of North America was also signatory to the NCA.  The NCA provides for the resolution of jurisdictional disputes under the Plan, while Brand's area agreement provides for a different dispute resolution mechanism.

Brand assigned the disputed work to employees represented by Regional Carpenters.  The Laborers then claimed the work, leading Regional Carpenters to threaten to picket and Brand to request the Board to hear the dispute under Sec. 10(k) of the National Labor Relations Act.  Days later, the Laborers filed a request for resolution under the Plan.  The Plan arbitrator determined that Brand's assignment was improper and that the Laborers should perform the work.

The Board will rule on a jurisdictional dispute only if it first finds that all parties have not agreed to an alternative method for voluntary adjustment of such disputes.  The Laborers argued that all parties had agreed to use the Plan, but Regional Carpenters and Brand maintained that Regional Carpenters had not agreed to use the Plan and that Brand was bound to competing dispute mechanisms.

The Board agreed with the Laborers for several reasons.  First, the Board found that Regional Carpenters were bound to the Plan by virtue of the NCA, rejecting Regional Carpenters' argument that the plain language of the NCA binds only "local unions," which it is not.  The Board found that Regional Carpenters is encompassed within the term "local unions" as used in the NCA.  The conduct of Regional Carpenters in accepting the benefits of the NCA on the project and referring employees to work on it for Brand as well as two other contractors further supported the conclusion that it was bound to the NCA.  The Board also noted that the NCA's Joint Labor-Management Administrative Committee issued an interpretation finding that the NCA binds not only the signatory international unions and their respective locals, but also "any and all other subordinate or intermediate bodies/organizations of the signatory International Union(s) regardless of the nomenclature used by said International Union(s)."  Furthermore, the NCA must be presumed to cover regional union entities or its "supremacy" clause - which asserts that it supersedes other "local, regional/area, or national agreements" - would be meaningless.  An "inferiority" clause in the area agreement - expressly stating that, in the event the employer enters into a PLA, the PLA provisions will take precedence over any conflicting provisions in the area agreement - further supports the conclusion.  In addition, the Board rejected Regional Carpenters' claim that the UBC is not its agent and could not bind it to the NCA, finding that Regional Carpenters' bylaws indicate otherwise.

Second, the Board found that Regional Carpenters is bound to the Plan by virtue of a "Participation Agreement" it signed in 2007.  The Participation Agreement (a solidarity charter) permitted Regional Carpenters to participate in the Washington State Building and Construction Trades Council despite the UBC's nonaffiliation with the BCTD.  Because the Participation Agreement  states that the "traditional dispute resolution procedures under the [BCTD] shall apply to jurisdictional disputes among and between the affiliates of the [BCTD], their affiliated subordinate bodies and the Local Union and its subordinate bodies" and the BCTD constitution requires use of the Plan, the Board found that the Participation Agreement independently bound Regional Carpenters to the Plan.  It again rejected an argument that Regional Carpenters does not constitute a covered "local union."

Accordingly, the Board found that all parties are bound to the Plan and effectively dismissed Regional Carpenters' case.  Pacific Northwest Regional Council of Carpenters, 355 NLRB No. 45 (6/11/2010).

Editor's note:  In the time since the dispute occurred, Regional Carpenters has withdrawn from the Washington State Building and Construction Trades Council, and the UBC has repudiated the NCA.


Supreme Court Invalidates Decisions of Two-Member NLRB; Senate Confirms Two New NLRB Members

On June 17, the U.S. Supreme Court issued an opinion in New Process Steel v. NLRB holding that the National Labor Relations Board lacked authority to issue decisions from the end of 2007 to March 2010, when the five-member Board had only two members.  The decision effectively invalidates nearly 600 Board decisions issued during the 27-month period.

On June 17, the U.S. Supreme Court issued an opinion in New Process Steel v. NLRB holding that the National Labor Relations Board lacked authority to issue decisions from the end of 2007 to March 2010, when the five-member Board had only two members.  The decision effectively invalidates nearly 600 Board decisions issued during the 27-month period.

On December 20, 2007, when the Board had one vacancy and anticipated two more, it delegated its powers to a group of three.  On December 31, 2007, one member of the three-member group's term expired, but the remaining two members - Democrat Wilma Liebman and Republican Peter Schaumber -- proceeded to issue decisions as a two-member quorum of a three-member group.  This continued until President Obama made two recess appointments  -- controversial Democrat Craig Becker and Democrat Mark Pearce - in March 2007.

The Court held that the National Labor Relations Act, which provides that "three members of the Board shall, at all times, constitute a quorum of the Board," requires that the Board continuously maintain a membership of three in order to exercise the delegated authority. 

The decision is highly significant to the litigants in the cases decided during the 27-month period, and the fate of those cases is uncertain.  However, the decision is not likely to have a significant impact on the construction industry as a whole, given that the two-member Board - which represented opposing parties and which was cognizant of the possibility of decisions being overturned - avoided deciding highly controversial, high-impact cases.

Less than a week after release of the Court's decision, on June 22, the Senate -- in a surprising turn of events - confirmed Pearce for a regular appointment along with Republican Brian Hayes.  The Senate took no action on Becker.

This gives the Board the following composition:

  1. Chairman Liebman: Democrat - confirmed through August 2011
  2. Member Schaumber: Republican - confirmed through August 2010
  3. Member Pearce: Democrat - confirmed through December 2013
  4. Member Hayes: Republican - confirmed through December 2012
  5. Member Becker: Democrat - recess appointment that expires at the end of 2011

With the impending expirations of Liebman's and Schaumber's terms and the general counsel vacancy created when Bush-appointee Ronald Meisburg stepped down on June 20, it is likely that further political jockeying is in store.


DOL Revises Interpretation of "Clothes," Changing Time Considered Compensable

Recently, the U.S. Department of Labor's (DOL) Wage & Hour Division issued an Administrator's Interpretation to provide guidance on whether protective gear is considered "clothes" in Section 203 (o) of the Fair Labor Standards Act (FLSA).  In addition to defining "clothes," the interpretation clarifies whether time spent by employees washing or changing clothes, or "donning and doffing" protective gear and other equipment is compensable.  This interpretation reverses prior opinion letters issued by DOL and affects collective bargaining agreements (CBAs) where such time may have once been considered unpaid.

Recently, the U.S. Department of Labor's (DOL) Wage & Hour Division issued an Administrator's Interpretation to provide guidance on whether protective gear is considered "clothes" in Section 203 (o) of the Fair Labor Standards Act (FLSA).  In addition to defining "clothes," the interpretation clarifies whether time spent by employees washing or changing clothes, or "donning and doffing" protective gear and other equipment is compensable.  This interpretation reverses prior opinion letters issued by DOL and affects collective bargaining agreements (CBAs) where such time may have once been considered unpaid.

Administrator's Interpretation No. 2010-2 (AI) specifically states that the definition of "clothes" does not include "protective equipment worn by employees that is required by law, by the employer, or due to the nature of the job."  As a result, the FLSA exemption for changing into and out of "clothes" does not include donning and doffing protective equipment, according to DOL, and such time is therefore compensable, even if it was to be unpaid under the terms of a CBA.

The AI also states that while time spent changing "clothes" - not protective equipment - can still be unpaid according to the terms of a CBA, "subsequent activities, including walking and waiting, are compensable."  Such activities, like walking or transporting to a jobsite and waiting in line at a time clock, now begin a continuous workday.  According to DOL, unionized employees cannot bargain away these rights, so a CBA provision stating that time spent donning and doffing such equipment is not compensable, or one stating that time spent transporting and waiting is not compensable, is now invalid.

Although agency guidance like the AI is not binding on courts, they are often given deference by courts and they may provide employers that follow them with a defense if sued.

For more information on the FLSA, visit the DOL website or AGC's Labor and HR Topical Resources page on the AGC website.


Labor Department Clarifies Definition of "Son or Daughter" in FMLA

On June 22, 2010, the U.S. Department of Labor's (DOL) Wage and Hour Division, through an Administrative Interpretation (AI), clarified the definition of "son or daughter" as it relates to the Family and Medical Leave Act of 1993 (FMLA).  The AI clarifies the rights of certain caregivers in a parental role, such as relatives and same-sex partners, giving them access to  protected leave to care for or bond with a child as outlined in the FMLA.

On June 22, 2010, the U.S. Department of Labor's (DOL) Wage and Hour Division, through an Administrative Interpretation (AI), clarified the definition of "son or daughter" as it relates to the Family and Medical Leave Act of 1993 (FMLA).  The AI clarifies the rights of certain caregivers in a parental role, such as relatives and same-sex partners, giving them access to  protected leave to care for or bond with a child as outlined in the FMLA.

As it relates to children, the FMLA generally requires that companies with 50 or more employees entitle workers up to 12 workweeks of leave for the birth or placement of a son or daughter, to bond with a newborn or newly placed son or daughter, or to care for a son or daughter with a serious health condition.  The definition of "son or daughter" under the FMLA includes not only a biological or adopted child, but also a "foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis."  While it was presumably the intent of lawmakers for the term "in loco parentis" to include children who were not in traditional nuclear households (i.e., biological mother and father), the law left many unanswered questions for non-traditional families with children.

According to Administrator's Interpretation No. 2010-3, the FMLA regulations "do not require an employee who intends to assume the responsibilities of a parent to establish that he or she provided both day-to-day care and financial support in order to be found to stand in loco parentis to a child."  While whether an employee stands in loco parentis to a child will depend on particular facts, the AI lists several examples of possible cases of in loco parentis, including: 

  • a grandparent who is assuming ongoing responsibility for raising a child because the parents are incapable of providing care;
  • an aunt who assumes responsibility for raising a child after the death of a child's parents;
  • an employee who provided day-to-day care for his or her unmarried partner's child (with whom there is no biological relationship) but does not financially support the child;
  • an employee who will share equally in the raising of an adopted child with a same-sex partner, but who does not have a legal relationship with the child; and
  • divorced and remarried parents where both the biological parents and stepparents will all four have equal rights to take FMLA leave to care for the child.

Another example is shared in a statement by labor secretary Hilda L. Solis, where an uncle who is caring for a young niece and nephew when their single parent has been called to active military duty may exercise his right to family leave.

The AI specifically mentions that an employee who cares for a child while the child's parents are on a vacation would not be considered to be in loco parentis to the child.

For more information on the FMLA, visit the Wage and Hour Division's FMLA web page or AGC's Labor and HR Topical Resources web page.


Labor Department Revises Child Labor Law, Leaves AGC-Supported Apprentice Exemption in Place

The U.S. Department of Labor (DOL) Wage and Hour Division has issued a final rule to revise the Fair Labor Standards Act as it pertains to workers under age 18. It will place a few more restrictions on tasks that cannot be performed by 16- and 17-year-olds working in construction but leaves in place, for now, an exemption for 16- and 17-year-old apprentices and student learners.

The U.S. Department of Labor (DOL) Wage and Hour Division has issued a final rule to revise the Fair Labor Standards Act as it pertains to workers under age 18. It will place a few more restrictions on tasks that cannot be performed by 16- and 17-year-olds working in construction but leaves in place, for now, an exemption for 16- and 17-year-old apprentices and student learners.

An April 17, 2007, an Advanced Notice of Proposed Rulemaking had outlined a plan to adopt new Hazardous Occupational Orders (HOs) that would have removed the current exemption for 16- and 17-year-old apprentices and student learners that allows them to work in construction, as recommended by a 2002 National Institute for Occupational Safety and Health (NIOSH) report.  AGC of America submitted comments protesting the planned change, noting, among other items, both the importance of apprenticeship, pre-apprenticeship, and training programs to the future of the construction industry and the lack of hard data on the occupational illness, injury and fatality rates among 16- and 17-year-old apprentices and student learners.

In issuing the final rule, DOL called NIOSH’s rationale for its recommendations, “vague” or “not provided.” The DOL made it clear that while there may be future changes to the exemptions, “it is important to consider and develop criteria for determining when apprenticeship and student-learner exemptions are appropriate.” DOL further noted that such criteria must be consistent with the established national policy of balancing the benefits of employment opportunities for youth with the most effective safety protections, and that it is considering creating new HOs.

AGC will continue to work with DOL both to protect the safety and health of all construction industry workers as well as to ensure youths’ continued access to apprenticeship and training programs.

The final rule also:

  • Expanded work tasks deemed safe for 14- and 15-year-olds to include sales, clerical, and clean-up work. However, it left in place the ban on youths under 16 working in construction. The only exception would be for office or sales work that is not performed on a construction job site (e.g., a 14-year-old could file papers at a construction company’s main office, but not at a job site trailer.)
  • Incorporates a 2008 amendment that substantially increased the maximum permissible civil money penalty an employer may be assessed for child labor violations that cause the death or serious injury of a young worker.
  • Revises HO 7 both to remove an exception and expand the types of power-driving hoisting equipment minors are forbidden to use.
  • Revises HO 14 to expand the prohibition on band saws, circular saws, and guillotine shears to include chain saws, reciprocating saws, wood chippers, and abrasive cutting discs, no matter what material is being cut.

As a result of the final rule, DOL has released an updated version of the interactive Child Labor Rules Advisor that to answer questions about workers and businesses that are subject to federal child labor rules.  The Child Labor Rules Advisor is one of a series of elaws Advisors developed by DOL to help employers and employees understand federal employment laws. 

The rule affecting 29 CFR Parts 570 and 579 of the Fair Labor Standards Act becomes effective July 19, 2010. Complete text of the final rule can be found in the May 20, 2010 Federal Register.

Much more information about the Fair Labor Standards Act and hiring workers under age 18 can be found in the Compliance Assistance section of the DOL web page.

The DOL’s YouthRules! Website has produced a self-assessment tool for nonagricultural employers to determine if they are compliance with the law regarding workers under age 18.


DOL Issues Guidance on Breaks for Nursing Mothers Under the FLSA

Recently, the U.S. Department of Labor's (DOL) Wage and Hour Division posted a new fact sheet that provides guidance to employers on the break time requirement for nursing mothers to express milk in the Patient Protection and Affordable Care Act.  The Act became effective on March 23, 2010, and amended Section 7 of the Fair Labor Standards Act (FLSA).

Recently, the U.S. Department of Labor's (DOL) Wage and Hour Division posted a new fact sheet that provides guidance to employers on the break time requirement for nursing mothers to express milk in the Patient Protection and Affordable Care Act.  The Act became effective on March 23, 2010, and amended Section 7 of the Fair Labor Standards Act (FLSA). 

Regarding the time and location of breaks, DOL has not specified any minimum number of, frequency of, or duration for these breaks.  However, the fact sheet explains that "employers are required to provide a reasonable amount of break time to express milk as frequently as needed by the nursing mother," and "the frequency of breaks needed to express milk as well as the duration of each break will likely vary." As previously determined, a bathroom, even if private, is not a permissible location and the space provided - even if temporarily created or converted into a space for expressing milk and made available when needed - must be functional as a space for expressing breast milk, be shielded from view, and free from any intrusion from co-workers and the public.

The fact sheet also explains how employers with 50 or fewer employees are to determine if they may be excluded from complying with the new law if it would impose an undue hardship.  Employers must count all of their employees, regardless of the work site, and while exempt employees are included in the count, the provision does not apply to employees who are exempt from overtime under the FLSA, even if the employer is determined to be a covered employer.

Employers are advised to check state laws regarding the necessary requirements for nursing mothers, particularly because this new federal mandate does not preempt state laws with more generous provisions. 

For more information, read AGC's article "New Health Care Law Requires Accommodations for Nursing Mothers; May Pose Challenge for Construction Industry."


Homeland Security Department Revises Rule on Electronic Processing and Storage of I-9 Forms

The Department of Homeland Security has issued a final rule to revise the regulations regarding completion and retention of I-9 forms. The revision gives employers the discretion to sign and retain I-9 forms electronically. 

The Department of Homeland Security has issued a final rule to revise the regulations regarding completion and retention of I-9 forms. The revision gives employers the discretion to sign and retain I-9 forms electronically. 

In June 2006, DHS issued an interim final rule that permitted electronic signature and storage of I-9 forms.  The interim rule amended DHS regulations to permit employers to complete, sign, scan and store the I-9 forms electronically, including existing I-9 forms.  In this final rule, DHS made minor modifications to clarify certain provisions.  Specifically, employers:

  • Must complete a form I-9 within three business (not calendar) days;
  • May use paper, electronic systems, or a combination of paper and electronic systems;
  • May change electronic storage systems as long as the systems meet the performance requirements of the regulations;
  • Need not retain audit trails of each time a Form I-9 is electronically viewed, but only when the Form I-9 is created, completed, updated, modified, altered or corrected; and
  • May provide or transmit a confirmation of a Form I-9 transaction, but are not required to do so unless the employee requests a copy.

The final rule also makes "technical and conforming" amendments to the regulations including the requirement that an electronic I-9 storage system be searchable "by any data element," requiring only an indexing system that "permits the identification and retrieval for viewing or reproducing of relevant documents and records maintained in an electronic storage system."

The final rule is effective August 23, 2010. Complete text of the final rule can be found in the July 22, 2010 Federal Register.

More information about I-9 forms and Employment Eligibility Verification is available on the U.S. Citizenship and Immigration Services website at www.uscis.gov/I-9 and in the Labor and HR Topical Resources section of the AGC website.


OFCCP Plans to Strengthen the Affirmative Action Obligations Related to Individuals with Disabilities

The Department of Labor's Office of Federal Contractor Compliance Programs (OFCCP) issued an Advanced Notice of Proposed Rulemaking (ANPRM) on July 23, 2010, soliciting comments about the agency's plans to strengthen regulations related to affirmative action for individuals with disabilities under the Rehabilitation Act.  The OFCCP notes that, according to the Bureau of Labor Statistics, the percentage of individuals with disabilities in the workforce in March 2010 was only 22.5, as compared to 70.2 percent of individuals who are not disabled.  The OFCCP clearly intends to impose additional requirements on federal contractors, the most significant of which may be the requirement to create job groups and compare the percentage of individuals with disabilities in each job group with the availability of individuals with disabilities within the contractor's recruitment area.  Contractors concerned about the potential changes have a unique opportunity to comment on such changes before the regulations are written.

The Department of Labor's Office of Federal Contractor Compliance Programs (OFCCP) issued an Advanced Notice of Proposed Rulemaking (ANPRM) on July 23, 2010, soliciting comments about the agency's plans to strengthen regulations related to affirmative action for individuals with disabilities under the Rehabilitation Act.  The OFCCP notes that, according to the Bureau of Labor Statistics, the percentage of individuals with disabilities in the workforce in March 2010 was only 22.5, as compared to 70.2 percent of individuals who are not disabled.  The OFCCP clearly intends to impose additional requirements on federal contractors, the most significant of which may be the requirement to create job groups and compare the percentage of individuals with disabilities in each job group with the availability of individuals with disabilities within the contractor's recruitment area.  Contractors concerned about the potential changes have a unique opportunity to comment on such changes before the regulations are written.

Currently, employers that have a direct contract (including a construction contract) with the federal government or its agencies that is valued at $10,000 or more, or that have a subcontract of the same value required to complete a direct federal contract, are required to engage in affirmative action related to individuals with disabilities.  Such federal contractors (or subcontractors) with 50 or more employees and a contract of $50,000 or more are also required to create an affirmative action program containing certain required provisions.  The required provisions currently do not include a statistical analysis of the workforce to determine whether the workforce reflects the available workers in the recruitment area.  The preparation of a compliant plan is fairly straightforward and the obligations are very similar to the obligations most employers have under the Americans with Disabilities Act (with a few exceptions).

Based on the ANPRM, the nature of the affirmative action obligations under the Rehabilitation Act are likely to change.  The list of questions on which the OFCCP is soliciting comments is lengthy.  Some sample questions include:

  • If OFCCP were to require Federal contractors to conduct utilization analyses and to establish hiring goals for individuals with disabilities, comparable to the analyses and establishment of goals required under the regulations implementing Executive Order 11246, what data should be examined in order to identify the appropriate availability pool of such individuals for employment?
  • Would the establishment of placement goals for individuals with disabilities measurably increase their employment opportunities in the Federal contractor sector? Explain why or why not.
  • What experience have Federal contractors had with respect to disability employment goals programs voluntarily undertaken or required by state, local or foreign governments?
  • What specific employment practices have been verifiably effective in recruiting, hiring, advancing, and retaining individuals with disabilities?

Other questions revolve around the burden that additional requirements would place on small businesses, the benefit of partnering with community organizations, and making the application process more accessible.  Interested employers can find the full list in the ANPRM at http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480b1fd5a.

One question notably missing from the list is how a required statistical analysis, or any other new requirement, would affect construction contractors.  Federal construction contractors are currently excluded from the detailed statistical analysis requirements under the affirmative action regulations related to women and minorities (although they are required to monitor their achievement of certain goals).  There is no indication in the ANPRM that such an exclusion is being considered in the regulations for individuals with disabilities.  If an exclusion is not provided, the additional statistical analysis would require a detailed analysis of a construction contractor's workforce, regardless of where projects are located or how long such projects last.  Given the nature of the industry, this would place a more significant burden on construction contractors than other service contractors.

Any changes will not take effect until at least early- to mid-2011.  However, comments on the questions posed by the OFCCP and the potential changes are being taken for a short time period before the proposed regulations are written.  If you are interested in commenting on these potential changes, you should submit comments on or before September 21, 2010.  Comments may be submitted electronically (see http://www.regulations.gov/search/Regs/home.html#home and use RIN number 1250-AA02) or submitted directly to Barbara J. Bingham, Acting Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, Room N3422, 200 Constitution Avenue, N.W., Washington, D.C. 20210.  An opportunity to comment will also be available once the OFCCP issues the proposed regulation.

Editor's note:  This article was written by guest author Tami Earnhart.  Ms. Earnhart is a partner in Ice Miller's Labor and Employment Group.  She represents employers in all aspects of employment and labor law, including discrimination and other litigation, claims filed with administrative agencies, audits by administrative agencies, and labor arbitrations.  She helps employers avoid employment disputes, when possible, and advises companies in making personnel decisions and creating policies in compliance with state and federal laws, including affirmative action policies and programs.  She is also a contributing author of AGC's Affirmative Action Manual for Construction and has served as a speaker in AGC audio conferences and webinars on employment law matters.


Temporary Pension Relief Legislation Enacted

On June 25, President Obama signed into law H.R. 3962, the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (the Act), a stand-alone measure to prevent a scheduled cut in Medicare reimbursements to physicians and to provide short-term funding relief to both single- and multi-employer pension plans.  The Act contains several provisions to help multiemployer pension funds hit hard by 2008-2009 investment losses.  However, it does not contain the preferred measures sought by AGC and its coalition partners and passed by the House earlier this year.

On June 25, President Obama signed into law H.R. 3962, the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (the Act), a stand-alone measure to prevent a scheduled cut in Medicare reimbursements to physicians and to provide short-term funding relief to both single- and multi-employer pension plans.  The Act contains several provisions to help multiemployer pension funds hit hard by 2008-2009 investment losses.  However, it does not contain the preferred measures sought by AGC and its coalition partners and passed by the House earlier this year. 

Key multiemployer pension funding adjustments permitted by H.R. 3962 include:

  • Expanded 30-year amortization of net investment losses incurred in either or both of the first two plan years ending after August 31, 2008;
  • Expanded 10-year smoothing of investment losses incurred in either or both of the first two plan years ending after August 31, 2008; and
  • Expanded asset smoothing corridor to 130 percent for either or both of the first two plan years ending after August 31, 2008.

To qualify for the relief provisions, plans must meet a solvency test and agree to benefit restrictions.  The solvency test requires that the plan's actuary certify that the plan is projected to have sufficient assets to pay all expected benefit payments and other expenditures over 30 years.  The benefit restrictions prohibit plans electing the relief from adopting any benefit improvements within two years of a plan year to which the relief provisions apply, unless certain conditions are satisfied. 

While the relief enacted is not the preferred solution, AGC and the coalition are seeking "technical corrections" legislation along with Congressional guidance to help ensure that regulatory agencies will interpret the Act in a manner consistent with the intended relief.  AGC and the coalition are also continuing to work on additional, longer-term relief for more troubled multiemployer plans, including a "partitioning" proposal included in the pending bills H.R. 3936 and S. 3157.  To support this effort by contacting your members of Congress through AGC's online Legislative Action Center, click here.

To view an analysis of the Act issued by the National Coordinating Committee for Multiemployer Plans, the coalition coordinator, click here.  To view the Senate Finance Committee's summary of the Act or the complete legislative text, click hereFor more information, contact Karen Lapsevic, AGC's Director, Tax, Fiscal Affairs, and Infrastructure Finance, at 202-547-4733 or lapsevick@agc.org.


COBRA Subsidy Expires; Extension Seems Unlikely

The eligibility period required for certain individuals to receive a 65 percent premium subsidy to help pay for continuing health coverage, also known as COBRA, has been extended several times but will likely not be extended again.  Although Congress recently passed the Continuing Extension Act of 2010, extending the COBRA subsidy eligibility period to May 31, when addressing the matter after the Memorial Day break, the Senate decided to remove a further extension from pending legislation in order to save $7 billion.  This decision leaves many workers who were involuntarily terminated after May 31 and who desire to continue their employer-sponsored health care coverage to pay the full cost of COBRA.  Those who were involuntarily terminated on or prior to the expiration date and currently receive the COBRA subsidy may continue with the subsidized coverage, but will lose the benefit once they reach the maximum subsidy coverage period of 15 months.

The eligibility period required for certain individuals to receive a 65 percent premium subsidy to help pay for continuing health coverage, also known as COBRA, has been extended several times but will likely not be extended again.  Although Congress recently passed the Continuing Extension Act of 2010, extending the COBRA subsidy eligibility period to May 31, when addressing the matter after the Memorial Day break, the Senate decided to remove a further extension from pending legislation in order to save $7 billion.  This decision leaves many workers who were involuntarily terminated after May 31 and who desire to continue their employer-sponsored health care coverage to pay the full cost of COBRA.  Those who were involuntarily terminated on or prior to the expiration date and currently receive the COBRA subsidy may continue with the subsidized coverage, but will lose the benefit once they reach the maximum subsidy coverage period of 15 months.

Should a decision to extend the COBRA subsidy occur later, AGC will provide an update and refer employers to appropriate compliance assistance tools, including model notices.  In the meantime, employers are encouraged to review notices sent to COBRA-eligible employees on or after June 1, 2010, to verify that they are not promised the 65 percent subsidy.  For additional information and questions regarding COBRA and the premium subsidy, contact the U.S. Department of Labor Employee Benefits Security Administration at 1-866-444-3272.


AGC HR and Training Conference to Highlight Link between Coaching, Workplace Performance and Corporate Results

At AGC's 2010 HR Professionals Conference and Training & Development Conference, participants will learn the importance of coaching to transform employee potential into workplace performance, and ultimately, corporate results.  Kelly S. Riggs of Vmax Performance Group in Broken Arrow, Oklahoma, will address both groups in a joint, keynote session on October 19, in Scottsdale, Ariz.

At AGC's 2010 HR Professionals Conference and Training & Development Conference, participants will learn the importance of coaching to transform employee potential into workplace performance, and ultimately, corporate results.  Kelly S. Riggs of Vmax Performance Group in Broken Arrow, Oklahoma, will address both groups in a joint, keynote session on October 19, in Scottsdale, Ariz. 

Few people disagree with the premise that great leadership skills are critical to creating a high-performance organization, but surprisingly, many companies invest very little in the development of effective leaders.  This is particularly shortsighted given the overwhelming research that connects leadership skills to employee engagement, and employment engagement to productivity, profitability, attendance, workplace safety, and customer satisfaction.

Research shows that the quality of workplace performance is directly proportional to the leadership skills of a manager - much like the leadership skills of a sports coach is the critical link to a sports team's success.  For example: 

  • An ineffective coach can fail to recruit (or hire) talented players just as an ineffective manager can fail to hire talented employees.  
  • An ineffective coach can fail to develop players to reach their potential just as an ineffective manager can fail develop employees to reach their potential.
  • An ineffective coach can fail to win games even with a talented team of individual players just as an ineffective manager can dramatically hamper the workplace performance of the most talented employees.
  • An ineffective coach can provide inadequate leadership, communicate poorly, and fail to support his or her players just as an ineffective manager can fail to lead, communicate with, and support his or her employees.

Regardless of how technically proficient a manager may be, he or she must learn to coach in order to transform employee potential into real improvements in workplace performance. While great teams never arise out of mediocre players, neither do great teams arise out of mediocre coaches.

Kelly's high-energy presentation will define the three keys to powerful coaching and teach HR and training professionals how to identify employees at every talent level who will benefit from effective coaching.  Information on both conferences can be found at www.agc.org/HR_TD.


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