AGC's Human Resource and Labor News - March 21, 2017 / Issue No. 02-17 (Print All Articles)

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Resolution to Kill “Blacklisting” Rule Passes Congress, Moves to President

AGC and its members are on the verge of a major legislative victory: nullification of the regulations implementing President Obama’s Fair Pay and Safe Workplaces Executive Order, often referred to as the “blacklisting” rule. Following a concerted AGC advocacy effort, the House of Representatives voted to nullify the rule through use of the Congressional Review Act (CRA) on Feb. 2, and the Senate passed the joint resolution by a slim margin on March 9. The legislation now moves to the President Trump’s desk for signature.

AGC and its members are on the verge of a major legislative victory: nullification of the regulations implementing President Obama’s Fair Pay and Safe Workplaces Executive Order, often referred to as the “blacklisting” rule.  Following a concerted AGC advocacy effort, the House of Representatives voted to nullify the rule through use of the Congressional Review Act (CRA) on Feb. 2, and the Senate passed the joint resolution by a slim margin on March 9. The legislation now moves to the President Trump’s desk for signature.

Under the blacklisting rule, both prime and subcontractors would be required to report violations and alleged violations of 14 federal labor laws and “equivalent” state labor laws during the previous three years, and again every six months, on federal contracts over $500,000. Prime contractors would also be responsible for evaluating the labor law violations of their subcontractors at all tiers during both contract solicitation and contract performance. A single alleged violation could lead a contracting officer to either deny a prime contractor the right to compete for a federal contract or to remove a prime or pay information to employees and independent contractors, and it limits the use of mandatory arbitration of employment-related disputes.  Most of the rule’s mandates – all but the paycheck transparency provisions – have been on hold since a federal court issued preliminary injunction in October 2016. 

The CRA enables Congress to invalidate recently-issued federal agency regulations under certain circumstances.  Once Congress passes a joint resolution under the CRA and the President signs it into law, federal agencies may not issue the same or a substantially similar regulation absent authorization from Congress.  Accordingly, use of the CRA to “kill” the blacklisting rule is considered a better outcome than rescission of the executive order and regulations by the new administration.  If the resolution is signed into law as expected, it will also render continued litigation over the matter moot.

For more information, contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org or Denise Gold at 703-837-5326 or goldd@agc.org.


AGC Members Tour Expanded Carpenters Training Center

AGC of America’s Union Contractors Committee and the United Brotherhood of Carpenters (UBC) hosted a special event at the Carpenters International Training Center (CITC) in Las Vegas, NV, during AGC’s Annual Convention on March 8. Convention attendees enjoyed small-group tours of the exceptional, recently expanded 17-acre CITC campus, which now boasts 1.2 million square feet of classrooms, guest rooms, dining rooms, conference rooms, shops, and event space. A reception followed, at which Carpenters General President Doug McCarron, AGC CEO Steve Sandherr, and CITC Executive Director Bill Irwin gave brief remarks.

AGC of America’s Union Contractors Committee and the United Brotherhood of Carpenters (UBC) hosted a special event at the Carpenters International Training Center (CITC) in Las Vegas, NV, during AGC’s Annual Convention on March 8.  Convention attendees enjoyed small-group tours of the exceptional, recently expanded 17-acre CITC campus, which now boasts 1.2 million square feet of classrooms, guest rooms, dining rooms, conference rooms, shops, and event space.  A reception followed, at which Carpenters General President Doug McCarron, AGC CEO Steve Sandherr, and CITC Executive Director Bill Irwin gave brief remarks.

The CITC provides training to trainers and rank-and-file UBC members, plus manages course development, in power-generation, turbine installation, interior systems, concrete formwork, leadership, and much more.  Further information about the CITC is available here.

 



 

 

 


Collective Bargaining in 2016 Yields Average First-Year Increase of 2.6%

Construction-industry collective bargaining negotiations completed during 2016 resulted in an average first-year increase in wages and benefits of $1.18 per hour or 2.6 percent, according to the annual year-end Settlements Report issued by the AGC-supported Construction Labor Research Council. For newly negotiated multi-year contracts, the average negotiated second-year increase was $1.59 or 2.8 percent, and the average third-year increase was $1.61 or 2.9 percent.

Construction-industry collective bargaining negotiations completed during 2016 resulted in an average first-year increase in wages and benefits of $1.18 per hour or 2.6 percent, according to the annual year-end Settlements Report issued by the AGC-supported Construction Labor Research Council.  For newly negotiated multi-year contracts, the average negotiated second-year increase was $1.59 or 2.8 percent, and the average third-year increase was $1.61 or 2.9 percent. 

For all three contract years, the average increases negotiated in 2016 were higher than those negotiated in 2015 and in 2014, in terms of both dollar amounts and percentages.  CLRC has observed a “gradual, steady upward trend” in first-year increases negotiated since 2011. However, CLRC further observed, “the most common settlement in 2016 fell in the 2.1-2.5 percent range, lower than the results for both 2014 and 2015.”

Regionally, the areas reporting the lowest average first-year increase in 2016 on a percentage basis were the New England Region (CT, MA, ME, NH, RI, VT) and the East North Central Region at 2.4 percent each, and on a dollar-amount basis was the Southeast Region (AL, FL, GA, KY, MS, NC, SC, TN, VA) at $0.89.  The South Central Region (AR, LA, NM, OK, TX)  reported the highest average first-year increase on a percentage basis at 3.0 percent, and the Southwest Pacific Region (AZ, CA, HI, NV) reported the highest on a dollar-amount basis at $1.57.

By craft, the lowest average first-year increase was negotiated with the Insulators at 1.8 percent or $0.82.  On a dollar-amount basis, the highest average was negotiated with the Boilermakers at $1.71.  On a percentage basis, four crafts shared the highest average of 2.9 percent:  the Carpenters, Cement Mason, Electricians, and Operating Engineers.

The full report, along with other CLRC reports, is available in AGC’s online Labor & HR Topical Resources library at https://www.agc.org/topicalresources under the main category “Collective Bargaining” and subcategory “Collective Bargaining Agreements Data.”  (You must be logged in as an AGC member.)  The report contains additional data and charts, as well as information about custom research and CLRC’s consulting services.  Collective bargaining chapters are reminded to please send settlements contract data directly to CLRC promptly upon settlement of negotiations.


Court Says Employer Must Make Benefit Fund Contributions Even After Union Decertified

In the first holding of its kind by any United States Court of Appeals, the Seventh Circuit has ruled that employers are still obligated to contribute to union health and welfare and pension funds under the terms of a collective bargaining agreement even after the union is decertified and the collective bargaining agreement is rendered void by operation of law.

In the first holding of its kind by any United States Court of Appeals, the Seventh Circuit has ruled that employers are still obligated to contribute to union health and welfare and pension funds under the terms of a collective bargaining agreement even after the union is decertified and the collective bargaining agreement is rendered void by operation of law.

In the case of Midwest Operating Engineers Welfare Fund, et al. v. Cleveland Quarry, et al., three related employers were signatory to five-year agreements with a union that had been certified as the “9a” representative of their employees. Because federal law only allows a collective bargaining agreement to serve as a “contract bar” to decertification for a maximum of three years, the employees covered by the agreements were free to decertify the union during the term of the collective bargaining agreements rather than having to wait until the collective bargaining agreements were close to expiration. The employees at all three of the defendant employers voted to decertify the union a year before the agreements were due to expire.

Decertification renders a collective bargaining agreement void by operation of law, meaning that a union is no longer allowed to enforce an agreement after the union is decertified. However, in the Cleveland Quarry case, the U.S. Court of Appeals for the Seventh Circuit (which covers Wisconsin, Illinois, and Indiana, and which includes the troubled Teamsters Central States Pension Fund) held that a Taft-Hartley multiemployer benefit fund can still enforce a collective bargaining agreement rendered void by decertification until the agreement’s expiration date, despite language in the agreement stating that the employers were obligated to make contributions to the fund only for hours worked “under the terms of the agreement.” Although this is the only case of its kind in the United States, it is binding on federal district courts in each of the states in the circuit.

The takeaway from this decision is to include language in collective bargaining agreements that clearly terminates the employer’s obligation to contribute if the employees decertify the union, the union disclaims interest, or if the agreement is otherwise terminated by agreement of the parties or by operation of law. Absent this explicit language, employers operating in the Seventh Circuit – at least those operating on a “9a” rather than an “8f” basis – now face a substantial risk that their obligations to union benefit funds will continue even if their obligations to the union and the employees under those agreements cease.

The employers in the case petitioned for a rehearing, which was denied.  They are now considering an appeal to the U.S. Supreme Court.

Editor’s Note:  This article was written by the attorney representing the employers in the case, Andrew J. Martone of the law firm Hesse Martone, P.C., and edited and published with permission.  Andy can be reached at (314-862-0608) or andymartone@hessemartone.com.


Union Representation in Construction Up 0.6% from Last Year

Union representation in the construction industry (covering all occupations) rose from 14.0% in 2015 to 14.6% in 2016, according to an annual report issued by the Bureau of Labor Statistics (“BLS”) January 26. The number of union-represented employees in the industry also rose over the year, from 992,000 to 1,095,000, while the total number of workers in the industry rose from 7,109,000 to 7,488,000. Union membership in the industry similarly increased, from 13.2% to 13.9%.

Union representation in the construction industry (covering all occupations) rose from 14.0% in 2015 to 14.6% in 2016, according to an annual report issued by the Bureau of Labor Statistics (“BLS”) January 26.  The number of union-represented employees in the industry also rose over the year, from 992,000 to 1,095,000, while the total number of workers in the industry rose from 7,109,000 to 7,488,000.  Union membership in the industry similarly increased, from 13.2% to 13.9%.

Among workers in construction and extraction occupations, whether employed in the construction industry or another industry, union representation and membership increased by an even greater margin in 2016.  Representation rose from 18.3% to 19.4%, and membership rose from 17.2% to 18.4%.  The total number of workers in such occupations increased from 6,193,000 to 6,387,000.

Over the past decade, the percentage of union-represented employees in the industry has gone up and down, starting at 13.6% in 2006 and peaking at 16.2% in 2008, as shown in the graph below.

BLS reports that the construction industry continues to be among the private industries with the highest rates of union membership.  The industry’s 13.9% union membership is outpaced only by the utilities (21.5%), transportation and warehousing (18.4%), and telecommunications (14.6%) industries. Union membership across all private-sector industries dropped to just 6.4% in 2016, down from 6.7% the year before. 

The report also addresses earnings.  According to BLS, the median weekly earnings of all employees in the construction industry rose from $784 to $822 in 2016.  Union-represented workers’ earnings were 47% higher than nonunion workers’ earnings in the industry, but they rose at a slightly lower rate over the year.  Union-represented workers’ weekly earnings increased about 4.8% to $1,146 from $1,093, while nonunion workers’ increased about 5% to $780 from $743. 

The median weekly earnings for workers employed in construction and extraction occupations across industries rose from $749 to $784 in 2016.  Here, union-represented workers’ weekly earnings rose significantly more than nonunion workers’ over the year, increasing about 7.3% from $1,064 to $1,142, as compared to nonunion workers’ earnings, which increased about 3.6% from $695 to $719.

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 staff.  The data also cover all sectors of the industry, including residential construction.

For the full report from BLS, click here.  For access to historical data on these topics, click here.


Construction Executive Pay Expected to Rise by 4% This Year

Company revenue size is the most relevant demographic factor in determining how a construction company pays its executives as compared to other construction companies, reports PAS, Inc. in its latest Contractor Compensation Quarterly (CCQ).  When it comes to open-shop craft compensation in infrastructure construction, though,  location and type of construction are most relevant.

Company revenue size is the most relevant demographic factor in determining how a construction company pays its executives as compared to other construction companies, reports PAS, Inc. in its latest Contractor Compensation Quarterly (CCQ).  When it comes to open-shop craft compensation in infrastructure construction, though,  location and type of construction are most relevant.

This edition of the CCQ advises that PAS-surveyed contractors said that they expect to increase executives’ pay by an average of 3.7 percent in 2017.  Based on historical experience, PAS anticipates that the average will likely come in around 4.0 percent or higher for the year.  This is about the same as actual raises granted in 2016, which averaged 3.9 percent.  The report includes average, median, and other data on base salary for 15 common executive positions in the commercial construction industry.  “In general terms,” according to the CCQ, “the larger the contractor, the higher the compensation.”

The CCQ also provides information on a new survey conducted by PAS, one capturing wage rates paid to open-shop craft workers employed on heavy civil, highway, municipal and related infrastructure projects that are not covered by prevailing wage mandates.  It includes average, median, and other data on wage rates for 43 such craft positions.  Using excavator operators as an example, the CCQ further shows how pay varies by type of construction within the sector.

PAS’s complete Executive Compensation Survey for Contractors report – which also covers fringe benefit information and data broken down by type of construction, geographic location, company revenue, and other characteristics – is available for purchase from PAS.  For more information, go to www.pas1.com, or call 1-800-553-4655 and ask about the AGC-member discount.


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