AGC's Human Resource and Labor News - March 27, 2013 / Issue No. 2-13 (Print All Articles)

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Union Representation in Construction Slips in 2012, While Earnings Rise

Union representation in the construction industry slipped to 13.7 percent (850,000 workers) in 2012, a decline from 14.9 percent (928,000 workers) in 2011 and equal to the percentage in 2010, the Bureau of Labor Statistics (BLS) reports.

Union representation in the construction industry slipped to 13.7 percent (850,000 workers) in 2012, a decline from 14.9 percent (928,000 workers) in 2011 and equal to the percentage in 2010, the Bureau of Labor Statistics (BLS) reports.  Union membership in the industry dropped from 14 percent (874,000 workers) in 2011 to 13.2 percent (820,000 workers) in 2012.  Total employment in construction fell from 6.244 million workers to 6.205 million.

While union representation in the construction industry declined last year, median weekly earnings of workers in the industry increased from $746 to $768, according to BLS.  Weekly earnings of union-represented workers in construction rose from $1,037 to $1,069, while those of unrepresented workers rose from $698 to $722.

The construction industry continues to have one of the highest union representation rates among private industries reported by BLS, exceeded only by the transportation and utilities industries.  Union representation across all private-sector industries was 7.3 percent in 2012, as compared to 7.6 percent in 2011.

Assessments of BLS industry data should consider that such data cover surveyed employees at all levels and classifications, including personnel that are not typically organized, such as office clerical workers, professional staff and executives.  The data also cover all sectors of the industry, including residential construction.

BLS further reports that the percentage of union-represented workers in construction and extraction occupations – whether employed in the construction industry or another industry – also fell in 2012, from 20.1 percent to 19.9 percent.  The number of workers employed in such occupations declined from 5.575 to 5.567 million.

For the full report from BLS, click here.  For additional breakdowns of BLS data on union representation, including industry data broken down by state, click here.


Laborersí International Vice President Rocco Davis Delivers Up-Beat Message to AGCís Union Contractors

Things are looking up, according to Rocco Davis of the Laborers’ International Union of North America (“LiUNA”) in a March 6 address during AGC of America’s Annual Convention in Palm Springs, CA.  Davis, who serves LiUNA as Vice President, Special Assistant to the General President, and Pacific Southwest Regional Manager, expressed optimism about the industry and about labor relations.

Things are looking up, according to Rocco Davis of the Laborers’ International Union of North America (“LiUNA”) in a March 6 address during AGC of America’s Annual Convention in Palm Springs, CA.  Davis, who serves LiUNA as Vice President, Special Assistant to the General President, and Pacific Southwest Regional Manager, expressed optimism about the industry and about labor relations.

Work hours are starting to rebound in most parts of the country, reported Davis, noting that LiUNA-represented workers logged 40 million “man hours” in 2012.  LiUNA is especially encouraged by expected growth in the energy sector and considers infrastructure investment the key to progress.  He added that LiUNA appreciates its alliance with AGC on efforts to promote infrastructure investment and that the union wants to work with AGC on other areas of common ground as well.

One potential such area identified by Davis is immigration reform.  Like AGC, said Davis, LiUNA is concerned about vicarious liability – i.e., laws that render contractors liable for the violations of their subcontractors – and does not oppose an E-Verify system that is accurate and fair.  However, unlike AGC, LiUNA does oppose a new temporary guest worker program in construction.  There’s no justification for such a program, according to Davis, other than to drive down wages.

Davis also spoke about other areas of common concern, including multiemployer pension reform, clarifying the health care reform law, and avoiding jurisdictional disputes.  On the subject of jurisdictional disputes, Davis commented that LiUNA is taking the lead in streamlining jurisdiction and expressed his union’s interest in respecting area practice.  The Building and Construction Trades Department’s decision to revise the Plan for Settlement of Jurisdictional Disputes to put area practice on the same level of importance as prior decisions of record was a major factor in LiUNA’s decision to rejoin the Department in 2008, said Davis.  Because area practice now has added weight, he added, it is important for contractors to provide written work assignments when LiUNA requests them.  The intent is to build evidence of local practices.  Davis also mentioned that LiUNA has abrogated most of its jurisdictional agreements because they’re antiquated.

“We’re partners with you,” said Davis, and want to help contractors in efforts to increase competitiveness, increase efficiency, upgrade skills, and find new ways to grow.

The convention session at which Davis spoke was hosted by AGC’s Union Contractors Committee and took the place of a regular committee meeting.


New Proposal to Reform Multiemployer Retirement Plans Will Help Hard Hit Construction Industry

The chief executive officer of the Associated General Contractors of America, Stephen E. Sandherr, issued the following statement in response to the release of the National Coordinating Committee for Multiemployer Plans Retirement Security Review Commission’s proposed plan for preserving, remediating and innovating multiemployer retirement plans: “The Commission’s plan represents a pragmatic, reasonable and – most importantly for taxpayers – self-sufficient approach to preserving and protecting nearly half a trillion dollars worth of multiemployer retirement plans.

The chief executive officer of the Associated General Contractors of America, Stephen E. Sandherr, issued the following statement in response to the release of the National Coordinating Committee for Multiemployer Plans Retirement Security Review Commission’s proposed plan for preserving, remediating and innovating multiemployer retirement plans: “The Commission’s plan represents a pragmatic, reasonable and – most importantly for taxpayers – self-sufficient approach to preserving and protecting nearly half a trillion dollars worth of multiemployer retirement plans.”

“These retirement plans, many of which are funded by construction firms, are needed to ensure long-term security for tens of thousands of construction workers. As important, the retirement plans’ funds provide a vital source of capital for domestic investments in everything from small businesses to major infrastructure projects. The steps outlined in the Commission’s plan give employers and their workers the tools they need to protect their retirement plans.”

Read the full press release here. The news was covered by Bloomberg BNA’s Construction Labor Report and For Construction Pros, among others.


AGC Member Testifies at House Pension Hearing

On March 5, the U.S. House Education and Workforce’s Subcommittee on Heath, Employment, Labor and Pensions held a hearing titled, “Challenges Facing Multi-employer Pension Plans: Reviewing the Latest Findings by PBGC and GAO."

On March 5, the U.S. House Education and Workforce’s Subcommittee on Heath, Employment, Labor and Pensions held a hearing titled, “Challenges Facing Multi-employer Pension Plans: Reviewing the Latest Findings by PBGC and GAO.”  Harold Force, president of Force Construction Co. in Columbus, Ind., testified on behalf of AGC of America and was the sole employer witness.  The Hearing focused on recent reports from the Pension Benefit Guaranty Corporation (PBGC) and preliminary findings of a General Accountability Office (GAO) report on the status of multi-employer pension plans. Mr. Force gave an employer perspective of plans with funding deficiencies and on the need to reform the system before it is too late.

The PBGC testified that many plans were hit hard from the recession and without Congressional action, the PBGC could become insolvent in the next 10 years – particularly if several large plans that are currently headed toward insolvency do, in fact, fail. The findings highlight the dire funding status of many plans and reiterate the need for bold and decisive reform of the system.  AGC has been working for over a year with stakeholders on recommendations for Congress to reform the system. Mr. Force testified that, without giving plan trustees more flexibility, the system that many construction employers depend on to provide employee pensions could be in jeopardy.

AGC is working with Congressional leaders on legislation to address the multi-employer pension system and will work with them on enacting reform in the coming months. For more information on the hearing, you can visit the committee website, along with an archived webcast of the hearing.

For more information, please contact Jim Young at (202) 547-0133 or youngj@agc.org.


NLRB Recess Appointment Challenge Likely Headed to Supreme Court

On March 12, the Obama administration stated it would petition the Supreme Court to review the recent U.S. Court of Appeals for the D.C. Circuit decision, Noel Canning v. NLRB, a key case (of several separate cases) challenging the validity of three “recess appointments” President Obama made to the National Labor Relations Board in January 2012.

On March 12, the Obama administration stated it would petition the Supreme Court to review the recent U.S. Court of Appeals for the D.C. Circuit decision, Noel Canning v. NLRB, a key case (of several separate cases) challenging the validity of three “recess appointments” President Obama made to the National Labor Relations Board in January 2012.   The D.C. court ruled that the appointments were “constitutionally invalid” because the Senate was actually not in recess when the appointments were made.  Accordingly, the five-member Board lacked a quorum when it decided the underlying legal issues affecting employer Noel Canning.

Immediately after the Jan. 25 court decision, NLRB Chairman Marc Pearce responded to the ruling by issuing a statement asserting his belief that the appointments will ultimately be upheld and reporting that, in the meantime, the Board will continue to issue decisions.  President Obama followed shortly thereafter by re-nominating Sharon Block and Richard Griffin to the NLRB; the third original recess appointee Terence Flynn resigned last year over an unrelated ethics inquiry.   The ongoing legal challenge will test President Obama’s executive power and a Supreme Court ruling could have significant implications, calling into question the validity of all decisions made by the Board in the past year, as well as the validity of the appointment of Richard Cordray to the Consumer Financial Protection Bureau, which was made under the same circumstances as the Board appointments.

AGC, with the help of AGC-supported Coalition for a Democratic Workplace (CDW) and the U.S. Chamber of Commerce, were instrumental in the D.C. Circuit decision and continue to evaluate the legal strategy moving forward.  In addition, legislation has been introduced in the U.S. House, H .R. 1120 – the Preventing Greater Uncertainty in Labor-Management Relations Act – which would prohibit the Board from taking any action that requires a quorum until the Senate confirms members or the Supreme Court makes a decision on the constitutionality of the appointments.

If you have any questions, please contact Jim Young at youngj@agc.org or (202) 547-0133.


NLRB Holds that Dues Check-Off Survives Contract Expiration

An employer must continue to honor a dues check-off provision in a collective bargaining agreement (CBA) even after the CBA expires, the National Labor Relations Board recently ruled, overturning 50 years of precedent.  The Board now holds that an employer may unilaterally cease dues check-off only when collective bargaining negotiations have reached a valid impasse.

An employer must continue to honor a dues check-off provision in a collective bargaining agreement (CBA) even after the CBA expires, the National Labor Relations Board recently ruled, overturning 50 years of precedent.  The Board now holds that an employer may unilaterally cease dues check-off only when collective bargaining negotiations have reached a valid impasse.

Generally, an employer violates Section 8(a)(5) of the National Labor Relations Act if it changes union-represented employees’ wages, hours, and other terms and conditions of employment (i.e., mandatory subjects of bargaining) on its own accord, without first bargaining to impasse with the union.  If the CBA is a “9(a) agreement” – which characterizes all CBAs outside the construction industry and a minority of CBAs in the construction industry – then this rule normally applies even after the CBA has expired.  However, the Board has carved out some exceptions to this rule.  In the 1962 Bethlehem Steel case, the Board made dues check-off such an exception.  In that case, and consistently since that case, the Board held that an employer’s obligation to deduct union dues from employees’ wages terminates upon expiration of the contract that establishes the obligation. 

In the present case, WKYC-TV, Inc., the Board decided to re-examine the Bethlehem Steel rule and found “compelling statutory and policy reasons to abandon” that rule.  The Board stated that “requiring employers to honor dues-checkoff arrangements post-contract expiration is consistent with the language of the Act, its relevant legislative history, and the general rule against unilateral changes in terms and conditions of employment.”  Accordingly, the Board overruled Bethlehem Steel and its progeny.  However, because employers have long relied on Bethlehem Steel, the court decided that it would not apply the new rule in the present case or in pending cases, but only in new cases going forward.

The impact of the case on AGC’s union-contractor members is not universal.  First, as referenced above, most construction-industry CBAs are not 9(a) agreements.  Rather, they are “8(f)” (a.k.a. “pre-hire”) agreements.  The Board did not address whether its new rule would apply in an 8(f) context.  However, because employers with 8(f) agreements do not have a duty to bargain after CBA expiration, the new rule probably does not apply.  On the other hand, it is theoretically possible that the present Board would deem an employer to have a duty to bargain in good faith to impasse after expiration of even an 8(f) agreement once the employer chooses to begin bargaining.

It is also worth noting that the validity of the present decision, along with all of the Board’s decisions since August 2011, is in question due to challenges to the legitimacy of certain Board members’ appointments.  Click here for the latest information on that matter.


Employers Required to Use New Form I-9 Beginning on May 7

On March 8, the U.S. Citizenship and Immigration Services (USCIS) published a revised Form I-9, the Employment Eligibility Verification form.

On March 8, the U.S. Citizenship and Immigration Services (USCIS) published a revised Form I-9, the Employment Eligibility Verification form. The new form, which expires on March 31, 2016, is available for immediate use by employers; however, employers who need time to make changes to their current business processes to incorporate the use of the new form may continue to use other previously accepted versions of the form until May 7, 2013. After May 7, all employers must use the revised Form I-9 for each new employee hired in the United States.

The revised Form I-9 has several new features, including new fields and a new format designed to reduce errors.  The instructions to the form also more clearly describe the information employees and employers must provide in each section.

English and Spanish versions of the new form are available online at www.uscis.gov.

For more information on Form I-9 and immigration compliance for employers, visit AGC’s Labor and HR Topical Resources webpage or www.USCIS.gov/I-9central.


IRS Expands Amnesty Program for Identifying Misclassified Independent Contractors; Still Risky

On Feb. 27, the Internal Revenue Service (IRS) announced the expansion of its Voluntary Classification Settlement Program (VCSP), which allows eligible employers the opportunity to participate in a low-cost option for correcting the status of misclassified workers from independent contractors to employees for future tax years.

On Feb. 27, the Internal Revenue Service (IRS) announced the expansion of its Voluntary Classification Settlement Program (VCSP), which allows eligible employers the opportunity to participate in a low-cost option for correcting the status of misclassified workers from independent contractors to employees for future tax years.  The program requires a payment of just over one percent of the wages paid to the reclassified worker for the past year with no interest, penalties, or risk of a future audit related to the workers in question for any prior years.  While this option may seem enticing to employers, it does not come without risks.  The program offers employers a safe harbor from further penalties by the IRS, but it does not provide a safe harbor from investigation or penalties by other government agencies.  Details regarding the program’s modifications can be found on the IRS website.

In 2011, the U.S. Department of Labor (DOL) signed a memorandum of understanding (MOU) with the Internal Revenue Service (IRS) that is aimed at improving departmental efforts to end the misclassification of workers as independent contractors.  The MOU will enable DOL and the IRS to share information and coordinate law enforcement in what DOL says will “level the playing field for law-abiding employers and ensure that employees receive the protections to which they are entitled under federal and state law.”

As a result of the MOU, employers that participate in the program may very well be providing the best evidence for alleged wrongdoing, which may or may not be determined by the investigating agency as willful.  Again, the investigating agencies include several sub-agencies within DOL and numerous state agencies which will now share information between each other and all have the authority to independently audit a company’s practices.  While the VCSP program seems appealing, participation may have far-reaching and unintended consequences for even well-intentioned employers.

In addition, state labor commissioners and other agency leaders have also signed MOUs with DOL.  These agreements were established as a part of DOL’s Misclassification Initiative aimed at restricting the lack of access to various employee benefits and protections to which workers may be entitled as regular employees, but not as independent contractors, while simultaneously curbing the losses of Social Security, Medicare and unemployment insurance taxes that employers are required to pay for employees.

As a result of the initiative, employers are urged to conduct self-audits to evaluate the level of vulnerability should a worker or the government claim a worker’s status as an employee instead of an independent contractor.  Questions to consider include, but are not limited to, whether or not:

  •  the worker’s services are an integral part of the organization’s activities;
  • the worker has a significant investment in facilities or equipment;
  • the worker has an opportunity for profit or loss in a business sense;
  • the worker exercises the initiative, judgment and foresight of a business owner;
  • the working relationship is permanent or indefinite, rather than for a pre-determined time; and
  • the worker has meaningful control over the details of the work.

Upon completion of a self-audit, employers with misclassified workers are best advised to consult an employment attorney licensed to practice in the state before taking any action.

For assistance in determining a worker’s status as an employee or independent contractor, employers may use DOL’s e-Laws Advisor to help classify workers appropriately according to the Fair Labor Standards Act, a law that is enforced by DOL’s Wage and Hour Division.  For additional guidance on worker misclassification issues, AGC’s pre-recorded webinar series, “Advanced Issues about Worker Misclassifications: What Every Contractor Needs to Know” will help employers through the process of correctly identifying workers as employees or independent contractors as well as exempt or non-exempt and can be purchased from the AGC Bookstore.  Additional resources are available to AGC members and chapters on AGC’s Labor & HR Topical Resources webpage under the main category “Other Legal Issues” and subcategory “Independent Contractors.”


Federal Contractors: Beware of OFCCPís New Compensation Audit Procedures

On Feb. 26, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced that effective Feb. 28, 2013, there are significant changes in how the OFCCP addresses compensation in compliance audits and enforcement proceedings.

On Feb. 26, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced that effective Feb. 28, 2013, there are significant changes in how the OFCCP addresses compensation in compliance audits and enforcement proceedings.  These changes effectively open virtually every federal contractor’s actions, policies and practices that affect compensation to scrutiny, review and possible challenge by OFCCP.

The announced changes include the following:

  1. OFCCP will formally rescind the “Voluntary Guidelines” and “Compensation Standards” issued by OFCCP in 2006.  OFCCP has criticized these documents as improperly limiting OFCCP’s ability to conduct full investigations of compensation matters; and

  2. The OFCCP has issued new guidance, effective on Feb. 28, 2013, specifying the procedures that OFCCP’s investigators will follow to review federal contractors’ systems and practices for paying workers.  The guidance is included in the newly-issued OFCCP Policy Directive 307.

This marks a significant change and expansion in OFCCP’s approach to compensation.  As a result, federal contractors can expect a much more intensive review of all systems and practices relating to compensation during OFCCP audits that commence on and after Feb. 28.  Federal contractors should undertake immediate steps to ensure that they fully understand the breadth and scope of these new changes, and to assess the possible impact on their organization.

Editor’s note:  This article was provided by the law firm of FortneyScott.  FortneyScott is a Washington, D.C.-based law firm counseling and advising clients on the full spectrum of workplace-related matters.  FortneyScott is a frequent speaker and sponsor of AGC training events for HR professionals in the construction industry.


Labor Department Issues New FMLA Regulations; New Forms & Poster Required

On Feb. 6, the U.S. Department of Labor’s Wage and Hour Division (WHD) celebrated the 20th anniversary of the Family and Medical Leave Act (FMLA) by issuing new regulations along with an updated poster and forms.

On Feb. 6, the U.S. Department of Labor’s Wage and Hour Division (WHD) celebrated the 20th anniversary of the Family and Medical Leave Act (FMLA) by issuing new regulations along with an updated poster and forms.  The regulations cover leave related to members or veterans of the military as well as the disclosure of genetic information obtained by employers for FMLA purposes.  FMLA covered employers are required to begin using the new forms and poster no later than March 8, 2013.  The poster must be displayed in a conspicuous location where employees and applicants can see it, including locations where there are no employees eligible for FMLA.  

The regulations expand Qualified Exigency Leave.  Qualified Exigency Leave may be used when an eligible employee’s spouse, child or parent is deployed to a foreign country as part of his or her service in the armed forces or National Guard and Reserves.  The regulations expand Qualified Exigency Leave by increasing the amount of leave permitted to spend time with a military member when he or she is on “rest and recuperation” leave from five to fifteen days.  In addition, the new regulations allow an employee to take leave to care for a military member whose parent is not capable of self-care, provided the need for care is caused by the military member’s deployment.

The regulations also update Military Caregiver Leave.  Military Caregiver Leave may be used when employees take leave to care for a spouse, child, parent, or next of kin of a covered servicemember.  The regulations expanded Military Caregiver Leave by expanding the definition of “covered servicemember” to include not only current members of the armed forces, National Guard and Reserves, but also veterans.  The veteran must have been released from military service within the previous five years, but cannot have been dishonorably discharged.  When a covered servicemember is undergoing treatment for a serious medical condition, a spouse, child, parent or next of kin may take FMLA leave to care for that person.   

In addition, the regulations also confirm employers’ confidentiality obligations under the Genetic Information Nondiscrimination Act of 2008 (GINA).  As a result, employers are permitted to disclose genetic information or family history obtained by the employer so long as it is consistent with the FMLA.

As with all other forms of FMLA leave, there is no requirement that leave under these circumstances be paid, however, employers must generally protect the employee’s job during the leave period.  Eligibility for each type of leave requires an employee to have been employed at the same employer for 12 months and have worked at least 1,250 hours for that employer in the immediately preceding 12 months.  Employers are advised to consult both state and local FMLA laws that may have more lenient requirements or provide greater leave entitlement to workers.

For more information on the FMLA, visit the Labor & HR Topical Resources section of the AGC website. The primary category is “Leave” and the secondary category is “Family and Medical Leave Act.”


Whistleblower Complaint Procedures for Affordable Care Act Announced

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has published an interim final rule that governs whistleblower complaints filed under Section 1558 of the Affordable Care Act (ACA).

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has published an interim final rule that governs whistleblower complaints filed under Section 1558 of the Affordable Care Act (ACA).  Section 1558 of the ACA provides protection to employees against retaliation by an employer for reporting alleged violations of Title I of the act or for receiving a tax credit or cost-sharing reduction as a result of participating in a health insurance exchange or marketplace.

Title I violations include a range of insurance company accountability policies such as the prohibition of lifetime limits on coverage and exclusions due to pre-existing conditions. If an employee reports a violation of one of these policies or requirements, the act’s whistleblower provision prohibits employers from retaliating against the employee. If an employee is retaliated against in violation of the whistleblower provision, he or she may file a complaint with, and ultimately receive relief from, OSHA or the courts.

The ACA authorizes the secretary of labor to conduct investigations into complaints and issue determinations, which are functions delegated to OSHA. OSHA’s interim final rule establishes the procedures and time frames for the filing and handling of such complaints, including investigations by OSHA, appeals of OSHA determinations to an administrative law judge for a hearing, review of such decisions by the Administrative Review Board and judicial review of the secretary’s final decision.

A fact sheet about filing whistleblower complaints under the Affordable Care Act is available on the labor department’s website.  For additional information on the Affordable Care Act, visit theLabor and HR Topical Resources page of the AGC website. The primary category is “Other HR Issues” and the secondary category is “Health Care Reform.”


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