AGC's Human Resource and Labor News - September 14, 2017 / Issue No. 06-17 (Print All Articles)

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Construction HR & Training Professionals Gear Up for Industry Conference

Cutoff for hotel reservations is Tuesday, September 19, 2017!

Each October, construction industry professionals in HR, training and workforce development gear up for the industry’s premier learning and networking event, AGC’s Construction HR & Training Professionals Conference, and this year is no different. The 2017 event will be held Oct. 11-13 at the Hyatt Regency Phoenix in Phoenix, Arizona. For more information or to register visit www.agc.org/HR_TED.

Each October, construction industry professionals in HR, training and workforce development gear up for the industry’s premier learning and networking event, AGC’s Construction HR & Training Professionals Conference, and this year is no different.  The 2017 event will be held Oct. 11-13 at the Hyatt Regency Phoenix in Phoenix, Arizona.  For more information or to register visit www.agc.org/HR_TED.

This year’s Conference will kick-off on the afternoon of Oct. 11 with a pre-conference Strategic Management Workshop.  This half-day workshop – suitable for both HR and training professionals – will help participants understand their firm’s top business challenges and align HR and training with strategic corporate goals. This year’s session, “How to Get a Seat at a C Suite Table” presented by Andrew Patron and Sal DiFonzo, will identify proven succession planning tactics, discuss proactive talent development approaches, define compensation concepts, and facilitate industry thinking around organizational development.

During the Conference, sessions for training professionals will cover the most cutting-edge techniques in training and development currently in use and envisioned for the future of the industry while the HR-related sessions will help HR professionals in the industry remain up to date and compliant with employment laws and best practices.  Some sessions this year for training and workforce development professionals include “Creating Internal Subject Matter Experts: The Key to Training Success”, “The Change Order: Rethinking Training and Development”, and “Training Your Next Generation of Leaders & Creating a Winning Succession Plan.” For HR professionals in the industry, some sessions include “On the Top of Camelback Mountain, Or Headed to the Desert Floor? Labor & Employment Law in Year One of The Trump Administration”, “Re-Thinking Recruiting in the Construction Industry: Best Practices and Trends in 2017”, “Health Care for Contractors: Lessons in Managing Risk and Costs”, “New Challenges in Workplace Drug Abuse”, and “The Big Pay Disconnect. Yes, Money Matters.”

Not to be missed this year are the Conference’s five anchor sessions.  During the opening session of the conference, innovation and creativity guru Jeff Tobe, author of Coloring Outside the Lines, will kick off the conference with his session on the Four Pillars of Engagement. Sarah Froning Nodarse, with Willis Towers Watson, will provide attendees with practical methods for ensuring that the key outcomes of diversity, inclusion and safety are accounted for in the organizations’ human capital strategies, workforce planning, and talent management processes. Derrick Duplessy, the founder of the Purpose Rockstar podcast and Executive Director of the Duplessy Foundation, will close the first day of the conference with his session on self-discovery, exploring how attendees can maximize their potential as humans. On the final day of the conference, Andy Patron of FMI will unveil and moderate a panel discussion on the results of their 2017 Talent Development survey of leading construction firms. And to close out the conference, Seniye Groff & Tim Sissel from Fortis Construction will discuss building an on boarding program from the ground up. This session will be informative for anyone trying to identify performance gaps and devise an organizational solution that uses process and training solutions to the table. 

For those seeking to earn professional credentials at the event, Conference attendees who hold a PHR, SPHR or GPHR certification and attend the entire conference and workshop will earn 11 general recertification credits through the HR Certification Institute.  Sessions may also qualify for SHRM-CP and SHRM-SCP recertification.   

For complete session descriptions, schedule, registration, and hotel information, visit the AGC website.

For more information, contact Claiborne Guy at claiborne.guy@agc.org or Carly Trout at carly.trout@agc.org.


Seventy Percent of Contractors Have a Hard Time Finding Qualified Craft Workers to Hire Amid Growing Construction Demand, National Survey Finds

Seventy percent of construction firms report they are having a hard time filling hourly craft positions that represent the bulk of the construction workforce, according to the results of an industry-wide survey released today by Autodesk and the Associated General Contractors of America. Association officials said that many firms are changing the way they operate, recruit and compensate, but cautioned that chronic labor shortages could have significant economic impacts absent greater investments in career and technical education.

Seventy percent of construction firms report they are having a hard time filling hourly craft positions that represent the bulk of the construction workforce, according to the results of an industry-wide survey released today by Autodesk and the Associated General Contractors of America. Association officials said that many firms are changing the way they operate, recruit and compensate, but cautioned that chronic labor shortages could have significant economic impacts absent greater investments in career and technical education.

“In the short-term, fewer firms will be able to bid on construction projects if they are concerned they will not have enough workers to meet demand,” said Stephen Sandherr, chief executive officer for the Associated General Contractors.  “Over the long-term, either construction firms will find a way to do more with fewer workers or public officials will take steps to encourage more people to pursue careers in construction.”

Of the more than 1,600 survey respondents, 70 percent said they are having difficulty filling hourly craft positions, Sandherr noted. Craft worker shortages are the most severe in the West, where 75 percent of contractors are having a hard time filling those positions, followed by the Midwest where 72 percent are having a hard time finding craft workers, 70 percent in the South and 63 percent in the Northeast.

The labor shortages come as demand for construction continues to grow.  Sandherr noted that construction employment expanded in 258 out of 358 metro areas that the association tracks between July 2016 and July 2017, according to a new analysis of federal construction employment data the association also released today. Growing demand for construction workers helps explain why 67 percent of firms report it will continue to be hard, or get harder, to find hourly craft workers this year.

Tight labor market conditions are prompting firms to change the way they operate, recruit and compensate workers, Sandherr noted.  Most firms report they are making a special effort to recruit and retain veterans (79 percent); women (70 percent) and African Americans (64 percent).  Meanwhile, half of construction firms report increasing base pay rates for craft workers because of the difficulty in filling positions.  Twenty percent have improved employee benefits for craft workers and 24 percent report they are providing incentives and bonuses to attract workers.

Forty-six percent of firms also report they are doing more in-house training to cope with workforce shortages while 47 percent report they are increasing overtime hours and 41 percent are increasing their use of subcontractors.  In addition, 22 percent report they are increasing their use of labor-saving equipment, 11 percent are using offsite prefabrication and 7 percent are using virtual construction methods like Building Information Modeling, or BIM for short.

“The ongoing labor drought continues to put pressure on the already high-risk, low-margin construction industry,” said Sarah Hodges, director of the construction business line at Autodesk, a leading 3D design, engineering and construction software firm. “As labor challenges continue to grow, technology will play an increasingly important role supporting the existing workforce while inspiring the next generation of industry professionals.”

Sandherr called on federal, state and local officials to act on the measures in the association’s Workforce Development Plan to address the growing worker shortages. In particular, he urged the Senate to pass legislation to reform and increase funding for the Perkins Career and Technical Education Act.

The survey was conducted in July and early August. Click here to see the national survey results, analysis of the data and regional and state-by-state results. Click here for the July 2017 metro construction employment data.


Overtime Rule Invalidated by Federal Court in Texas

On August 31, a federal judge in Texas struck down an Obama administration rule implementing changes to the Fair Labor Standards Act (FLSA) overtime regulations that would have doubled the standard salary threshold for exempt employees. U.S. District Judge Amos Mazzant granted summary judgment to a coalition of states and business groups that had challenged the 2016 rule, agreeing with the plaintiffs that the U.S. Department of Labor (DOL) raised the minimum salary threshold so high that it made the duties test irrelevant.

On August 31, a federal judge in Texas struck down an Obama administration rule implementing changes to the Fair Labor Standards Act (FLSA) overtime regulations that would have doubled the standard salary threshold for exempt employees. U.S. District Judge Amos Mazzant granted summary judgment to a coalition of states and business groups that had challenged the 2016 rule, agreeing with the plaintiffs that the U.S. Department of Labor (DOL) raised the minimum salary threshold so high that it made the duties test irrelevant.

As previously reported, the most significant change made by the rule was a substantial increase of the standard salary threshold for exempt employees – from $455 per week ($23,660 per year) to $913 per week ($47,476 per year).  AGC and its members were concerned that imposing such a large and immediate increase might result in unintended consequences, particularly for small construction companies, construction employers in lower‐wage regions, and construction personnel.

The update to the regulations was originally set to take effect on Dec. 1, 2016, but the district court in Texas previously granted a nationwide preliminary injunction temporarily blocking the rule. Awaiting the court’s final ruling, in late July the Trump administration DOL formally published a Request for Information (RFI) on the 2016 changes. In line with AGC’s regulatory recommendations, the RFI is the first step the DOL is undertaking to seek public input on the 2016 rule and to assist in the development of a future notice of proposed rulemaking (NPRM) revisiting the regulations.

While Judge Mazzant’s most recent decision effectively vacates the rule, the DOL is still moving forward with the RFI, and AGC will continue to provide input to the DOL on the impact further changes to the FLSA might have on the construction industry.

For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.


Minimum Wage for Federal Contractors Raised to $10.35 for 2018

The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) is announcing a minimum wage increase of $0.15 to $10.35 per hour to be paid to workers performing work on direct federal contracts and subcontracts covered by Executive Order 13658. Federally assisted contracts are not affected. The rate goes into effect on January 1, 2018.

The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) is announcing a minimum wage increase of $0.15 to $10.35 per hour to be paid to workers performing work on direct federal contracts and subcontracts covered by Executive Order 13658. Federally assisted contracts are not affected. The rate goes into effect on January 1, 2018.

Executive Order 13658 was signed by President Obama in 2014, and its corresponding regulations implemented an hourly minimum wage for workers performing work on covered federal contracts of $10.10 per hour beginning on January 1, 2015.  The order mandated that the Secretary of Labor determine a new minimum wage annually, based on the annual percentage increase in the Consumer Price Index for urban wage and clerical workers.  Notice is required to the public at least 90 days before the new wage goes into effect each year. 

Impacted workers include those whose wages are governed by the Davis-Bacon Act, the Service Contract Act, and non-exempt workers whose wages are governed by the Fair Labor Standards Act (FLSA) for all time spent directly supporting a covered contract.  FLSA-covered workers who do not spend at least 20% of the workweek directly supporting a covered contract are excluded. 

Covered contractors with existing projects or awards are entitled to an adjustment by federal agencies if the annual inflation increase was not covered by the existing contract or award. 

For more information on Executive Order 13658 including AGC’s impact on the final rule, click here or contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.


Judge Finds Contractor Responsible for Davis-Bacon Workers’ Actual Lodging Expenses

A U.S. Department of Labor administrative law judge (ALJ) has held that the employer, not the workers, primarily benefited from lodging used by itinerant workers hired to work on a federal dredging project away from their home communities. As a result, the employer was required under the Davis-Bacon Act to cover the full cost of the employees’ lodging expenses.

A U.S. Department of Labor administrative law judge (ALJ) has held that the employer, not the workers, primarily benefited from lodging used by itinerant workers hired to work on a federal dredging project away from their home communities.  As a result, the employer was required under the Davis-Bacon Act to cover the full cost of the employees’ lodging expenses.

The ALJ issued the decision in the closely watched Weeks Marine case on remand from a 2015 decision by the Department’s Administrative Review Board (ARB).  As previously reported, the ARB held that a “balancing of benefits” or “primary benefits” test applies to determine whether lodging expenses of employees working at a jobsite beyond commuting distance of their homes.  If the lodging is primarily for the benefit and convenience of the employer, then the employer must cover the cost.  More specifically, the employer must cover the actual cost, not just a reasonable cost of lodging.  The employer is not required to cover the cost if the lodging is primarily for the benefit and convenience of the workers, and either the company regularly furnishes such lodging to all of its workers or such lodging is customarily furnished by other employers in the same type of business.  The ARB remanded the case back to the ALJ to determine whether the facts in the present case established that the lodging primarily benefited the employer or the workers.

In finding that the lodging primarily benefited the employer, the ALJ noted that Weeks Marine needed to rely on out-of-town workers because the local workforce lacked the qualifications to perform the specialized work involved.  She also considered the fact that the company paid for part of the workers’ travel-related expenses by providing transportation and subsistence allowances (in accordance with the terms of its collective bargaining agreement) to support the finding.  In addition, she considered “secondary benefits” that accrued to the company because local lodging allowed the employees to work longer shifts that enabled timely completion of the project.  The ALJ disregarded various evidence establishing how the lodging benefited the workers as well as evidence that the workers, consistent with the itinerant nature of work in the dredging industry, expected to be responsible for their lodging costs beyond the subsistence allowance. 

Weeks Marine intends to seek review by the ARB again.  AGC will continue to monitor the case and to report on significant developments.  AGC is also continuing to explore opportunities to shape Davis-Bacon reform on this issue and numerous others.

For more info, contact Denise Gold, Associate General Counsel, at goldd@agc.org or (703) 837-5326.


AGC Urges DOL to Modernize Davis-Bacon Certified Payroll Reporting Requirements

AGC of America submitted a letter to the U.S. Department of Labor (DOL) Wage and Hour Division (WHD) on September 5 recommending several specific ideas on how to reform and modernize the weekly pay and certified payroll submission requirements as mandated by the Davis-Bacon and related Acts (DBRA).

AGC of America submitted a letter to the U.S. Department of Labor (DOL) Wage and Hour Division (WHD) on September 5 recommending several specific ideas on how to reform and modernize the weekly pay and certified payroll submission requirements as mandated by the Davis-Bacon and related Acts (DBRA).

Provisions of the Copeland Act statutorily require contractors and subcontractors performing work on federally financed or assisted construction contracts to "furnish weekly a statement with respect to the wages paid each employee during the preceding week" so that WHD and federal contracting agencies can review and determine that employees have received legally required wages and fringe benefits under the Davis-Bacon and related Acts (DBRA). Processing and submitting payroll data on a weekly basis is burdensome, costly, and out of touch with modern business practices. Additionally, while WHD has affirmed that electronic submission of payroll data is sufficient for compliance, AGC continues to hear that not all contracting agencies make electronic submission an easy or valid option.

AGC’s comment letter urges WHD to consider changing the weekly pay requirement to no less than bi-weekly and concurrently allowing contractors until before the next regular payment date of the payroll period to submit payroll reports.  AGC also asks WHD to require all agencies accept electronic certified payrolls for compliance or work with the Federal Acquisition Regulatory (FAR) Council if WHD lacks the authority to do so. Several of these requests require statutory update to the DBRA itself and AGC calls on WHD to consider regulatory action and work with the U.S. Congress to improve the requirements of the laws in a manner that is beneficial to both construction contractors and the agency.

For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.


PBGC Report Shows Continuing Problems with Multiemployer Pension Plans

AGC Calls on Congress to Make Additional Reforms

On August 3, 2017, Pension Benefit Guaranty Corporation (PBGC) issued its FY 2016 Projections Report detailing an increasing multiemployer pension program deficit with the probability of PBGC insolvency by 2025 without action. The deficit increased to $59 billion in 2016 and is projected to increase to $80 billion by 2026. According to the report, 100 plans are expected to become insolvent over the next 20 years, a handful of them being in the construction industry.

On August 3, 2017, the Pension Benefit Guaranty Corporation (PBGC) issued its FY 2016 Projections Report detailing an increasing multiemployer pension program deficit with the probability of PBGC insolvency by 2025 without action. The deficit increased to $59 billion in 2016 and is projected to increase to $80 billion by 2026. According to the report, 100 plans are expected to become insolvent over the next 20 years, a handful of them being in the construction industry.

While the Multiemployer Pension Reform Act of 2014 was meant to address many of the troubled plans, it was slow to be implemented and used by the Obama Administration. The law allowed plans heading toward insolvency to apply to the Treasury Department for benefit reductions if those reductions would allow the plan to remain solvent. To date, 15 plans have applied to Treasury with three applications having been accepted, several others remain under review.

AGC continues to monitor the viability of the PBGC and will oppose schemes to place excessive fees or premiums on plans to fund the failing PBGC. AGC is also advocating that Congress authorize a new type of multiemployer pension plan design, composite plans, that could provide an additional voluntary option to provide a lifetime benefit for employees, requires no government funding, and provides a much needed relief for employers and has been supported by labor and management. AGC hopes congress could begin consideration of the proposal this fall.

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


OMB Halts New EEO-1 Pay Data Collection Requirements; Original EEO-1 Reporting Still in Effect

On August 29, the Office of Management and Budget (OMB) informed the Equal Employment Opportunity Commission (EEOC) that it is initiating a review and immediate stay of the effectiveness of the pay data collection aspects of the EEO-1 form that was revised on September 29, 2016, in accordance with its authority under the Paperwork Reduction Act (PRA). OMB’s decision follows AGC’s regulatory recommendations, specifically that the new EEO-1 requirements were unnecessary and burdensome. “Among other things, OMB is concerned that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues,” the office said in its memo to the EEOC.

On August 29, the Office of Management and Budget (OMB) informed the Equal Employment Opportunity Commission (EEOC) that it is initiating a review and immediate stay of the effectiveness of the pay data collection aspects of the EEO-1 form that was revised on September 29, 2016, in accordance with its authority under the Paperwork Reduction Act (PRA). OMB’s decision follows AGC’s regulatory recommendations, specifically that the new EEO-1 requirements were unnecessary and burdensome. “Among other things, OMB is concerned that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues,” the office said in its memo to the EEOC.

OMB’s action does not completely rescind the revised EEO-1 Report, but it does relieve employers of their obligation to file the new “Component 2” (W-2 pay and FLSA hours worked information). The previously approved EEO-1 form which collects data on race, ethnicity and gender by occupational category will remain in effect. Employers should plan to comply with the earlier approved EEO-1 (Component 1) by the previously set filing date of March 2018.

Component 1 is simply the “old” format that employers used to file the last round of reports in September 2016. Those reports tally ethnicity, race, and gender data, by EEO-1 category for each physical location. A link to EEOC’s Frequently Asked Question about the EEO-1 filing can be found here:  https://www.eeoc.gov/employers/eeo1survey/faq.cfm.

AGC opposed the new data collection, calling upon the Trump administration and Congress to rescind the Obama administration Presidential Memorandum ordering the new EEO-1 form, and the form itself. AGC submitted comprehensive comments explaining its position to the EEOC in April and August 2016. AGC also testified against this new requirement before Congress in September 2016. 

AGC commends OMB and the EEOC for providing contractors with the necessary regulatory relief and will notify members of any further developments.

For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.


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