AGC's Human Resource and Labor News - November 26, 2013 / Issue No. 6-13 (Print All Articles)

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Register Now for AGC's Dec. 5 & 10 Davis-Bacon Webinar

AGC will conduct a two-part webinar titled Davis-Bacon:  Understanding, Influencing, and Complying with Federal Prevailing Wage Requirements on Dec. 5 and 10, 2013, from 1:00 to 2:30 p.m. Eastern Standard Time.  Understanding and complying with the Davis-Bacon and Related Acts is no simple task. Yet failure to do so can put a contractor at risk for catastrophic consequences — from high-dollar penalties to debarment. This webinar series will provide valuable information to help you avoid those risks, whether you’re new to federal contract compliance or just want a refresher course and update.  It will also help you understand your rights to influence and challenge the wage-and-benefits requirements that affect your firm

AGC will conduct a two-part webinar titled Davis-Bacon:  Understanding, Influencing, and Complying with Federal Prevailing Wage Requirements on Dec. 5 and 10, 2013, from 1:00 to 2:30 p.m. Eastern Standard Time.  Understanding and complying with the Davis-Bacon and Related Acts is no simple task. Yet failure to do so can put a contractor at risk for catastrophic consequences — from high-dollar penalties to debarment. This webinar series will provide valuable information to help you avoid those risks, whether you’re new to federal contract compliance or just want a refresher course and update.  It will also help you understand your rights to influence and challenge the wage-and-benefits requirements that affect your firm.

Past AGC webinar speakers Tim Helm, head enforcer of Davis-Bacon at the U.S. Department of Labor, and Deborah Wilder, prevailing wage attorney and consultant, will be back by popular demand, along with Maria Duffy, the Department’s Davis-Bacon National Survey Coordinator.

The Dec. 5 session will cover Davis-Bacon and Related Acts coverage and specific compliance issues, such as “site of the work” and truck driver issues, qualifying fringe benefits, coverage of survey crews, certified payroll requirements, apprentices and trainees, and lodging and transportation expenses.

The Dec. 10 session will cover wage determinations, including the survey process used to establish them, how to effectively influence the outcome of that process, finding and interpreting wage determinations, applying the correct classification, what to do if a classification is missing, and how to seek reconsideration of a wage determination.

When signing up for the webinar, registrants can purchase the latest edition of AGC’s Davis-Bacon Manual (© 2012) for just $50 extra.

Click here for additional webinar details and registration.

HRCI approval is pending.


OFCCP Releases Updated FAQs on New Disability and Veterans Rules

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued updated guidance on its recently released final rules regarding the employment of veterans and individuals with disabilities.  Both rules go into effect on March 24, 2014.

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued updated guidance on its recently released final rules regarding the employment of veterans and individuals with disabilities.  Both rules go into effect on March 24, 2014.

The updated Frequently Asked Questions (FAQs) address such issues as the proper way contractors should apply the seven percent utilization goal for individuals with disabilities and the eight percent hiring goal for veterans to their workforce.  The FAQs also address the difference between jobs filled and the number of people hired – two new data collection requirements under the rules for covered contractors.  In addition, the guidance clarifies that contractors may, in job announcements, refer to covered veterans and individuals with disabilities in an abbreviated fashion as long as the abbreviation is commonly understood by those seeking employment, specifically stating that using “D” and/or “V” is not permissible.

FAQs for the veterans rule and FAQs for the disability rule are located on OFCCP’s website.  For additional resources, visit www.agc.org/topicalresourcesThe primary category is “EEO” and the secondary category is “Affirmative Action/EEO.”


AGC Webinar Educates Federal Contractors on OFCCP's New Disability and Veterans Rules

Recently, AGC hosted a webinar on the Office of Federal Contract Compliance Program’s (OFCCP) New Disability and Veterans Rules: What They Mean for Federal Construction Contractors.   The new rules, which go into effect on March 24, 2014, update the affirmative action requirements for direct federal contractors with regard to veterans and individuals with disabilities.  The webinar recording is available for purchase in the AGC Bookstore to view on-demand.

Recently, AGC hosted a webinar on the Office of Federal Contract Compliance Program’s (OFCCP) New Disability and Veterans Rules: What They Mean for Federal Construction Contractors.   The new rules, which go into effect on March 24, 2014, update the affirmative action requirements for direct federal contractors with regard to veterans and individuals with disabilities.  The webinar recording is available for purchase in the AGC Bookstore to view on-demand.

Tami Earnhart, employment lawyer with Ice Miller LLP and co-author of AGC’s Affirmative Action for Construction, highlighted the changes that were made by the agency to increase the affirmative action obligations of federal contractors with regard to these two protected groups.  During the presentation, Ms. Earnhart identified which contractors are covered by the rules, provided detailed information on the self-identification invitation process for each rule, written affirmative action program requirements for applicable contractors and new record retention requirements.  In addition, Ms. Earnhart addressed OFCCP’s new 7% utilization goal for individuals with disabilities and 8% hiring benchmark for veterans.

Ms. Earnhart discouraged employers from implementing certain requirements prior to the March 24 effective date, including the self-identification invitation process.   She stated that doing so may cause contractors to inadvertently violate other federal employment laws.

For more than two years, AGC has worked with OFCCP as well as other federal agencies and legislative officials to block or lessen the burden of these rules on federal construction contractors.  While disappointed that OFCCP did increase its requirements, AGC was pleased to find that the agency also abandoned much, if not most, of the burdens it had originally proposed.  For more information on AGC’s impact on the outcome of the rules, click here.  For more information on complying with the requirements of OFCCP, visit AGC’s Labor & HR Topical Resources web page.  The primary category is “EEO” and the secondary category is “Affirmative Action.”

NOTE: AGC’s Affirmative Action Manual for Construction (Third Edition) is currently in production and will be available in the AGC bookstore January 1, 2014.  This new edition covers OFCCP’s NEW disability and veterans rules, auditing practices of construction contractors, new enforcement directives and more.


AGC Continues Successful Campaign Against Government-Mandated PLAs

AGC continues to monitor federal contracting agencies’ PLA policies and practices and to educate agencies about the problems with PLA mandates and bid preferences.  AGC’s efforts include over 80 letters and survey responses sent during the Obama Administration urging agencies not to impose such mandates or preferences.  In most cases, the letters were sent in response to agency announcements that a PLA mandate or preference was under consideration for a particular project or an anticipated set of projects in a particular area.  Of those, only one PLA mandate has been issued to date.

AGC continues to monitor federal contracting agencies’ PLA policies and practices and to educate agencies about the problems with PLA mandates and bid preferences.  AGC’s efforts include over 80 letters and survey responses sent during the Obama Administration urging agencies not to impose such mandates or preferences.  In most cases, the letters were sent in response to agency announcements that a PLA mandate or preference was under consideration for a particular project or an anticipated set of projects in a particular area.  Of those, only one PLA mandate has been issued to date.

The letters explain why AGC believes that publicly funded contracts should be awarded without regard to contractors’ lawful labor relations policies and why agencies should defer to contractors’ judgment as to whether a PLA is appropriate for a given project.  AGC sends such letters only when supported by the AGC chapter(s) in the area.

The most recent letters were sent to specific districts of the U.S. Army Corps of Engineers seeking public comment regarding the potential use of a PLA mandate on particular planned projects, including the Sacramento District regarding a project at Beale Air Force Base, the Nashville District regarding a project at Center Hill Dam, and the Vicksburg District regarding a project at the West Bank Levee.  In addition to the Corps, AGC has sent letters to the General Services Administration, the Naval Facilities Engineering Command, the Department of Veterans Affairs, the Department of Labor, the Federal Aviation Administration, and the Federal Highway Administration.  Each letter is tailored for the particular project and circumstances under review.

AGC neither supports nor opposes contractors’ voluntary use of PLAs on government projects, but strongly opposes any government mandate for contractors’ use of PLAs. AGC is committed to free and open competition for publicly funded work, and believes that the lawful labor relations policies and practices of private construction contractors should not be a factor in a government agency’s selection process.

For more information on AGC’s efforts opposing government mandated PLAs and for related resources, click here.


AGC Submits Comments on Affordable Care Act Employer Reporting Requirements

In response to a request for comments from the U.S. Internal Revenue Service (IRS), AGC submitted comments regarding the proposed employer reporting requirements under the Affordable Care Act (ACA) – also known as the health care reform law.  The reporting requirements will be used to verify the individual and employer mandates.  The concerns of AGC’s member companies were addressed via joint comments submitted by the Employers for Flexibility in Health Care (E-FLEX) – a coalition group of leading trade associations, large businesses and employer-sponsored health plans.  AGC also submitted an independently-drafted letter specifically addressing the needs of construction employers requirement to make contributions to multiemployer health plans pursuant to a collective bargaining agreement (CBA).

In response to a request for comments from the U.S. Internal Revenue Service (IRS), AGC submitted comments regarding the proposed employer reporting requirements under the Affordable Care Act (ACA) – also known as the health care reform law.  The reporting requirements will be used to verify the individual and employer mandates.  The concerns of AGC’s member companies were addressed via joint comments submitted by the Employers for Flexibility in Health Care (E-FLEX) – a coalition group of leading trade associations, large businesses and employer-sponsored health plans.  AGC also submitted an independently-drafted letter specifically addressing the needs of construction employers requirement to make contributions to multiemployer health plans pursuant to a collective bargaining agreement (CBA).

Both letters were submitted in response to proposed regulations requiring large employers to share with full-time employees and the IRS information about health care coverage offered the previous year.  The proposed regulations state that employers must, on a monthly basis, provide a list of all full-time employees, the coverage offered to those employees and the costs of the coverage.  Additional proposed regulations require insurers, as well as self-insured plans and multiemployer health plans, to report, in detail, the coverage provided to participants. The IRS would use the data provided by employers and plans to verify compliance with the law’s employer and individual mandates. By statute, both the employer and insurer requirements are scheduled to begin in 2016.  

The E-FLEX comment letter requests a more streamlined approach to the reporting process in order to help employers and individuals retain their existing coverage. The letter also asks the Obama administration to reevaluate the necessity of the data that is being collected from employers with regard to what is actually needed to administer the law. 

AGC’s comment letter complements the E-FLEX letter by specifically addressing the impact of the proposed regulations on employers that contribute to multiemployer plans. Often, the health plan information needed to satisfy the reporting requirements proposed in the rules is not readily available to these employers, making it more difficult to accurately report on the coverage provided to their employees. As a result, AGC asked that these employers be allowed to satisfy the reporting requirements by reporting that they contribute to a multiemployer group health plan for all employees who perform work under a CBA. In addition, AGC asked for a permanent extension of a previously announced safe harbor for employers that contribute to multiemployer group health plans with regard to the requirement to provide minimal essential coverage to full time employees and their dependents. The current transition relief, which expires in 2014, states that an applicable large employer will not be subject to a penalty for failing to offer minimum essential coverage to a full-time employee and his or her dependents if the employer is required to make a contribution to a multiemployer plan with respect to the full-time employee pursuant to a CBA, if coverage under the multiemployer plan is offered to the full-time employee and his or her dependents, and if the coverage offered is affordable and provides minimum value.

AGC will continue to monitor for any new developments and will notify members once final regulations are issued.  For additional information and resources on the employer requirements of the ACA, visit AGC’s ACA compliance assistance webpage at www.agc.org/healthcarereform.


IRS Announces COLA Increases for Dollar Limitations on Benefits and Contributions

  On October 31, 2013 the Internal Revenue Service (IRS) announced the cost-of-living adjustments impacting tax-qualified pension plans for 2014. Increases were not made to the individual limits on deferrals and catch-up contributions. However, the IRS increased from last year most of the general pension plan limitations, including the limit on annual compensation, as the cost-of-living index increase met the statutory thresholds that trigger adjustments. The following table highlights some of the key limits that affect tax-qualified pension plans.

On October 31, 2013 the Internal Revenue Service (IRS) announced the cost-of-living adjustments impacting tax-qualified pension plans for 2014. Increases were not made to the individual limits on deferrals and catch-up contributions. However, the IRS increased from last year most of the general pension plan limitations, including the limit on annual compensation, as the cost-of-living index increase met the statutory thresholds that trigger adjustments. The following table highlights some of the key limits that affect tax-qualified pension plans.

Code Section

2014

2013

401(a)(17)/404(l)Annual Compensation

$260,000

$255,000

402(g)(1)Elective Deferrals

$17,500

$17,500

414(v)(2)(B)(i)Catch-up Contributions

$5,500

$5,500

415(b)(1)(A)Defined Benefit Plan Limit

$210,000

$205,000

415(c)(1)(A)Defined Contribution Plan Limit

$52,000

$51,000

457(e)(15)Deferral Limits

$17,500

$17,500

414(q)(1)(B)Highly Compensated Employee Threshold

$115,000

$115,000

409(o)(1)(C)ESOP Limits

$1,050,000

$210,000

$1,035,000

$205,000

416(i)(1)(A)(i)Key Employee

$170,000

$165,000

408(p)(2)(E)SIMPLE Max. Contributions

$12,000

$12,000

414(v)(2)(B)(ii)SIMPLE Catch-up Contributions

$2,500

$2,500

408(k)(2)(C)SEP Min. Compensation

$550

$550

408(k)(3)(C)SEP Max. Compensation

$260,000

$255,000

1.61-21(f)(5)(i)Control Employee

$105,000

$100,000

1.61-21(f)(5)(iii)Control Employee

$210,000

$205,000

Social Security Tax Wage Base

$117,000

$113,700

 

Editor’s Note: This article was drafted by Ogletree Deakins, a labor and employment law firm that represents management. This information should not be relied upon as legal advice.


Double Breasting Calls for Double Caution, Cases Show

Union contractors facing increasing cost competition from open-shop contractors are often tempted to set up a separate nonunion firm and operate on a double-breasted, or dual shop, basis.  While establishment of such operations can be accomplished lawfully and effectively, the road has many pitfalls.  Two recent cases coming out of different federal appeals courts illustrate how uneven the terrain can be.

Union contractors facing increasing cost competition from open-shop contractors are often tempted to set up a separate nonunion firm and operate on a double-breasted, or dual shop, basis.  While establishment of such operations can be accomplished lawfully and effectively, the road has many pitfalls.  Two recent cases coming out of different federal appeals courts illustrate how uneven the terrain can be.

In Lippert Tile Co., Inc. v. Int’l Union of Bricklayers, the U.S. Court of Appeals for the Seventh Circuit (IL, IN, WI) held that a union and an open-shop tile installation company were “single employers” rendering the open-shop company subject to terms of the union company’s collective bargaining agreement (CBA).  Four years into operating Lippert Tile as a union contractor, the two brothers who owned the company decided to establish a separate open-shop firm called DeanAlan to capture the market it was missing by being 25-45 percent more expensive than its open-shop competition.  The brothers also established a third company, the Lippert Group, to provide management services to both tile installation firms.  The union with which Lippert Tile had a bargaining relationship filed a grievance with the Joint Arbitration Committee under the CBA seeking union benefits for DeanAlan’s nonunion tile installers.  The Committee issued an award in favor of the union.  The companies petitioned a federal district court to vacate the award on the basis that the grievance was not arbitrable – i.e., that the Committee did not have authority over DeanAlan and the Lippert Group because they were not parties to the CBA.  The union argued that the three companies constitute a single employer, making all three subject to the CBA’s arbitration provisions.  The district court agreed, and the appeals court affirmed the decision.

Under the single-employer doctrine, two companies will be treated as a single entity when they are sufficiently integrated.  The Supreme Court has held that a court should examine four factors in determining whether the entities are so integrated:  (1) interrelation of operations, (2) common management, (3) centralized control of labor relations, and (4) common ownership. Courts look at the totality of circumstances; no single factor controls the decision.

Assessing the first factor in the Lippert case, the court found that the companies shared many daily operations.  For example, the Lippert Group maintained business records, processed payroll, handled billing, and managed bank accounts for both Lippert Tile and DeanAlan.  More importantly, Lippert Group personnel made critical decisions as to whether Lippert Tile or DeanAlan would bid on a particular project and, if so, what to bid.  Also, while the companies did not share office space, they leased office and warehouse space in the same buildings as one another.  They also served the same geographic and trade markets.  Thus, the court found that this factor weighed in favor of single employer status.  The court came to the same conclusion on the second and fourth factors, noting that the companies failed to point to any actual managerial functions that are performed separately and to dispute common ownership.  Regarding the third factor, the court noted that it was “not entirely clear who was responsible for day-to-day labor relations decisions” in the companies.  However, the brothers’ decision to create a new firm for the purpose of serving the non-union market was sufficient cause for the court to find centralized control of labor relations.  Accordingly, the court concluded that “for all practical purposes, the Companies function as a single entity” and that the Committee had the power to decide whether the double-breasting practice was a violation of the CBA.

In Roofers Local No. 210 v. A.W. Farrell & Son, Inc., the U.S. Court of Appeals for the Second Circuit applied the same analysis to a different set of facts and came to a different conclusion.  The case involved a union and a nonunion roofing contractor owned by family members.  The union company, A.W. Farrell & Son, was owned by the father of two siblings who own the open-shop company, Roof Craft Systems.  The union with which A.W. Farrell & Son had a CBA and trustees to the union’s benefit funds sued the companies after the union signatory failed to make certain benefit fund contributions.  The plaintiffs sought to make Roof Craft Systems liable for the unpaid contributions on the basis that the two companies should be deemed “single employers” or “alter egos.” 

The district court assessed the four single-employer factors listed above along with two additional factors used by this court in past cases:  (5) “the use of common office facilities and equipment,” and (6) “family connections between or among the various enterprises.”  The court found evidence going in both directions.  Some factors pointed to single employer status, such as common administrative offices and personnel, common employment policies, the father providing financing for his kids to acquire Roof Craft Systems, and shared equipment during Roof Craft System’s start-up phase.  But other factors pointed to finding no single employer status, such as exclusive control over Roof Craft System’s day-to-day roofing operations and employment decisions by one of the siblings, the absence of common roofing employees, and the companies’ targeting of different parts of the local market.  Given past case law in the circuit holding that “the law only treats the employees of a corporate entity as the employees of a related entity under extraordinary circumstances,” the court concluded that the plaintiffs did not meet their burden of proof to establish single employer status.  The appeals court found no cause to overturn the trial court’s conclusion.

The district court also ruled for the companies on the alter ego claim.  As the court explained, an alter ego analysis, like a single employer analysis, considers whether “two enterprises have substantially identical management, business purpose, operation, equipment, customers, supervision, and ownership.”  They differ in that an alter ego analysis focuses on “the existence of a disguised continuance or an attempt to avoid the obligations of a collective bargaining agreement through a sham transaction or technical change in operations.”  Based on the analysis of the six “single employer” factors above, along with the lack of evidence compelling a finding that A.W. Farrell established Roof Craft to avoid CBA obligations, the appeals court likewise found no cause to overturn the trial court’s conclusion that the plaintiffs failed to establish their alter ego argument for holding Roof Craft Systems liable for A.W. Farrell’s unpaid contributions.

As these (and many other cases) demonstrate, the assessment of whether a dual shop operation is lawful is highly fact specific and can be unreliable.  Union contractors considering establishment of such an operation, as well as those considering helping a family member start a nonunion firm in the same business, should proceed with caution and seek the advice of qualified legal counsel early on.


AGC’s HR & Training Conference Provides Unique Experience for Construction Industry HR and Training Professionals

AGC’s 2013 HR Construction HR & Training Professionals Conference wrapped up Oct. 17 after two days of education, sharing of best practices and networking in Chicago, Ill.  The conference continues to be a must-attend event for HR and training professionals in the construction industry.

AGC’s 2013 HR Construction HR & Training Professionals Conference wrapped up Oct. 17 after two days of education, sharing of best practices and networking in Chicago, Ill.  The conference continues to be a must-attend event for HR and training professionals in the construction industry.

This year’s conference was preceded by a pre-conference Strategic Management Workshop for construction HR and training professionals.  During the workshop’s opening session, HR, T&D and the CEO, presenter Jathan Janove of Ogletree Deakins was entertaining and engaging as he demonstrated techniques for addressing the critical needs of the CEO when it comes to HR and training matters.  In other sessions, Construction industry HR professionals Catherine Hambley of Granite Construction and Suzi Benoit of Wright Ryan Construction shared their company’s experience with developing a high performance culture and aligning performance evaluations with company strategy.

The official opening day of the Conference started off with Melissa King and Cari Williams, training professionals with DPR Construction, sharing best practices for Infusing People Skills into a Traditionally Technical Environment.   Both presenters discussed DPR’s philosophy that “who we build is as important as what we build.”  The speakers also addressed their internal process for conducting regular employee satisfaction surveys, and how they use the results to help guide the direction of DPR’s professional development program each year.  Additional sessions throughout the day covered such tops as Developing Practical Market-based Pay Programs, Managing Absences for Employees with Long-term Illnesses, Building and Sustaining Long-term Project Teams, and Best Practices for Encouraging Employee Participation in the Company’s Contributory Retirement Plan.

Compliance was also a big focus at the conference, particularly concerning the Affordable Care Act (ACA) as well as new affirmative action requirements imposed by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP).  The OFCCP rules deal with the recruitment and promotion of veterans and individuals with disabilities.  To help companies comply with the requirements of the ACA, AGC offered a session that relates specifically to the ACA issues faced by construction employers – multiemployer plans, seasonal workers and the Act’s effect on the execution of the Davis-Bacon Act.  The presenters were Adam Bonsky of the Fringe Benefits Group and Mary Komornicka of Larkin and Hoffman. To assist with compliance with the new OFCCP regulations, attendees filled three related sessions.  In one session, L. Steven Platt, attorney with Clark Hill, highlighted the requirements of the new veteran and disability regulations.  Mr. Platt later joined economists Dubravka Tosic and Bo Shippen, both with ERS Group, to explain OFCCP’s new outlook on compensation analysis.  During the session, the three speakers shared examples and best practices for administering and evaluating compensation programs that are nondiscriminatory.  In addition, Mike Meagan, recruiter and diversity manager for Penhall Construction, shared techniques used by his company to successfully recruit veterans.

There were several engaging and interactive sessions at the conference as well. For example, HR consultant Nora Akins provided a hands-on demonstration of “The Supervisor Game.”  While playing the game, attendees learned fun techniques for training supervisors to be an extension of the HR department.  Attendees were out of their seats and role-playing during the session on Using Improvisation to Make Learning Stick lead by training consultant and former construction industry worker Brent Darnell.  During the closing session, FMI consultant Randy Nemchin unveiled FMI’s long awaited Talent Development Survey 2013.  The report is based on responses nationwide from a mix of general contractors and construction managers at firms of all sizes and specialties.

The conference was sponsored by the National Center for Construction Education & Research, PAS, Inc., eMars, Workplace HR, ClickSafety, ERS Group and Skillsoft.

Planning for the 2014 conference is underway, so stay tuned for details.


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