AGC's Human Resource and Labor News - January 11, 2018 / Issue No. 01-18 (Print All Articles)

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December Brought Significant Changes in NLRB Positions and Composition, Including AGC-Supported Reversal of Joint-Employer Ruling

Republicans’ brief control of the National Labor Relations Board ended with the expiration of Chairman Philip Miscimarra’s term on Dec. 16, 2017. In anticipation of the change, the Board issued several employer-friendly decisions with significant impact. The most high-profile among them is a ruling in Hy-Brand Industrial Contractors that overturns the controversial, AGC-opposed joint-employer standard established in Browning-Ferris Industries.

Republicans’ brief control of the National Labor Relations Board ended with the expiration of Chairman Philip Miscimarra’s term on Dec. 16, 2017.  In anticipation of the change, the Board issued several employer-friendly decisions with significant impact.  The most high-profile among them is a ruling in Hy-Brand Industrial Contractors that overturns the controversial, AGC-opposed joint-employer standard established in Browning-Ferris Industries.

In Browning-Ferris, the Board relaxed the standard for determining when a company could be deemed a “joint employer” of another company’s employees and therefore jointly responsible for unfair labor practices and collective bargaining obligations.  Against urgings by AGC and others, the Board held in the 2015 decision that  “joint employer” status may exist even when a company merely exercises indirect control over, or has simply reserved the right to control, essential employment terms of the other company’s employees.  Browning-Ferris appealed the decision to the U.S. Court of Appeals for the District of Columbia Circuit, and AGC submitted an amicus brief with other associations supporting the appeal.  While the appeal was pending, the Board issued its decision in Hy-Brand.  For reasons consistent with the arguments raised by AGC and allies in the Browning-Ferris case, the Board decided to reinstitute the standard that applied for 30 years prior to Browning-Ferris:  a company may be deemed a joint employer under the National Labor Relations Act (NLRA) only if it has actually exercised control over employment terms and has done so directly and immediately in a manner that is not merely limited and routine.  (In light of the Hy-Brand decision, the DC Circuit has remanded the Browning-Ferris case back to the Board for reconsideration.)

Other noteworthy decisions issued just prior to Miscimarra’s departure include the following:

  • Workplace Policies.  On Dec. 14, 2017, the Board issued a decision in The Boeing Company overruling a 2004 decision in Lutheran Heritage Village-Livonia.  In Lutheran Heritage, the Board held that a facially neutral workplace rule or employment policy could be unlawful under the NLRA if an employee would “reasonably construe” the language to prohibit the exercise of their NLRA rights.  The Board has now replaced the “reasonably construe” standard with a new test for assessing facially neutral rules and policies that takes into consideration (1) the nature and extent of the potential impact on employees’ NLRA rights, and (2) the employer’s legitimate justifications for the rule or policy.
  • Bargaining Units.  In a Dec. 15, 2017, decision in PCC Structurals, Inc., the Board overruled the 2011 decision in Specialty Healthcare & Rehabilitation Center of MobileUnder Specialty Healthcare, an employer seeking to expand the bargaining unit in a union’s petition for a representation election must show that the additional employees shared an “overwhelming” community of interest with the employees in the petitioned-for unit.  The Board has now eliminated the “overwhelming” requirement and returned to the traditional community-of-interest standard.
  • Unilateral Changes.  Also on Dec. 15, 2017, in Raytheon Network Centric Systems, the Board overruled a 2016 decision in E.I. du Pont de Nemours.  Du Pont required employers (at least in a 9(a) relationship) to give a union notice and an opportunity to bargain over changes to employment matters, even when the changes are consistent with past practice, if the past practice was created under a management rights clause in an expired collective bargaining agreement or if the actions involve employer discretion.  The Board now holds that no notice or opportunity to bargain is required (1) when the changes are similar in kind and degree with an established past practice or (2) simply because some degree of employer discretion is involved.

Miscimarra’s departure leaves the Board with an even split of two Republicans and two Democrats.  Media reports indicate that Pres. Trump is preparing to nominate management-side attorney John Ring of the law firm Morgan Lewis to fill the vacancy.  Until Ring, or an alternative, is officially nominated by the President and confirmed by the Senate, the Board is not likely to issues decisions in controversial cases.  Meanwhile, the President has appointed Board member Marvin Kaplan (a Republican) to serve as the Board’s acting chairman.


Building Trades Leader to Speak at AGC Convention Next Month

AGC of America’s 99th Annual AGC Convention in New Orleans, LA, will feature a session called “State of the (Building Trade) Unions” where the Brent Booker, secretary-treasurer of North America’s Building Trade Unions, will speak. The session is scheduled for Monday, Feb. 26, 3:00-4:30 p.m. All Convention registrants are invited to attend. While organized labor represents a minority of workers in construction, its actions have a significant impact on the industry and on the nation in general, making this session of interest to both union and nonunion contractors and chapters alike.

AGC of America’s 99th Annual AGC Convention in New Orleans, LA, will feature a session called “State of the (Building Trade) Unions” where the Brent Booker, secretary-treasurer of North America’s Building Trade Unions, will speak.  The session is scheduled for Monday, Feb. 26, 3:00-4:30 p.m.  All Convention registrants are invited to attend.  While organized labor represents a minority of workers in construction, its actions have a significant impact on the industry and on the nation in general, making this session of interest to both union and nonunion contractors and chapters alike. 

Members of AGC’s Union Contractors Committee and chapter staff are also encouraged to attend an open meeting of the Union Contractors Steering Committee to be held on Tuesday, Feb. 27, 9:00-10:00 a.m.  The meeting will include a roundtable discussion of current union contractor activities and concerns. 

Visit convention.agc.org for more information about the Convention and the many reasons to attend.


DOL Drops Six-Factor Unpaid Intern Test

On Dec. 19, 2017, the U.S. Court of Appeals for the Ninth Circuit became the fourth federal appellate court to expressly reject the U.S. Department of Labor’s (DOL) six-part test for determining whether interns and students are employees under the Fair Labor Standards Act (FLSA). On January 5, 2018, the DOL clarified that going forward, the Department will conform to these appellate court rulings by using the same “primary beneficiary” test that these courts use to determine whether interns are employees under the FLSA.

On Dec. 19, 2017, the U.S. Court of Appeals for the Ninth Circuit became the fourth federal appellate court to expressly reject the U.S. Department of Labor’s (DOL) six-part test for determining whether interns and students are employees under the Fair Labor Standards Act (FLSA). On January 5, 2018, the DOL clarified that going forward, the Department will conform to these appellate court rulings by using the same “primary beneficiary” test that these courts use to determine whether interns are employees under the FLSA.

The new seven-factor “primary beneficiary” test looks at whether the intern or the employer is the primary beneficiary of the relationship. The DOL believes the new test will offer more flexibility without a single determining factor and that the determination of whether an intern or student is an employee under the FLSA depends on the unique facts and circumstances of each case. The seven factors to consider in determinations are:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The DOL said that its Wage and Hour Division will update its enforcement policies to align with recent case law, eliminate unnecessary confusion among the regulated community, and provide the Division’s investigators with increased flexibility to holistically analyze internships on a case-by-case basis.

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


DOL Reissues 17 Wage and Hour Opinion Letters

On January 5, 2018, the U.S. Department of Labor (DOL) reissued 17 previously withdrawn opinion letters addressing a wide range of topics under the Fair Labor Standards Act (FLSA). Fifteen of the 17 letters were originally issued during the final days of the George W. Bush administration but were withdrawn by the Obama administration in 2009 “for further consideration” and “a further response in the near future.” Instead of providing a further response, however, the Obama administration stopped issuing opinion letters altogether and began releasing broader “Administrator’s Interpretations” that laid out how the department viewed employers’ specific obligations under the law. In June 2017, Secretary Acosta announced that he would reinstate the practice of issuing opinion letters.

On January 5, 2018, the U.S. Department of Labor (DOL) reissued 17 previously withdrawn opinion letters addressing a wide range of topics under the Fair Labor Standards Act (FLSA).  Fifteen of the 17 letters were originally issued during the final days of the George W. Bush administration but were withdrawn by the Obama administration in 2009 “for further consideration” and “a further response in the near future.” Instead of providing a further response, however, the Obama administration stopped issuing opinion letters altogether and began releasing broader “Administrator’s Interpretations” that laid out how the department viewed employers’ specific obligations under the law. In June 2017, Secretary Acosta announced that he would reinstate the practice of issuing opinion letters.

An opinion letter is an official, written opinion by the Wage and Hour Division of how a particular law applies in specific circumstances presented by an employer, employee or other entity requesting the opinion. The reissued letters cover a wide range of topics under FLSA of interest to all industries, with one addressing the exempt status of project superintendents in the commercial construction industry.

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


Construction Support Staff Wages Expected to Rise by 3.3% This Year

Construction Support Staff Wages Expected to Rise by 3.3% This Year

Construction support staff wages rose by 3.5% in 2016 and contractors are projecting those wages to increase an average of 3.3% in 2017, according to the latest Contractor Compensation Quarterly (CCQ) published by PAS, Inc. Based on over 175 companies in the 14th edition of the Construction Support Staff Salary Survey, PAS reports that pay increases have been fairly consistent the past few years. Although, PAS points out that historically predictions are typically about low, so year-end 2017 could exceed 3.3% and look similar to 2016’s 3.5% increase.

Construction support staff wages rose by 3.5% in 2016 and contractors are projecting those wages to increase an average of 3.3% in 2017, according to the latest Contractor Compensation Quarterly (CCQ) published by PAS, Inc. Based on over 175 companies in the 14th edition of the Construction Support Staff Salary Survey, PAS reports that pay increases have been fairly consistent the past few years. Although, PAS points out that historically predictions are typically about low, so year-end 2017 could exceed 3.3% and look similar to 2016’s 3.5% increase.

 

PAS also reveals a number of benefit survey trends in this edition of CCQ, reporting that the percentage of firms reducing their level of benefits in 2017 was 1.5%. Voluntary benefits (health, retirement, paid time off, etc.) have gone from an average of 19% of payroll in 1988 to 24.8% in 2017 and for PPO’s, the average deductible for a family is now $3,100 and for an individual is $1,469.

Jeff Robinson, president of PAS, Inc., is a regular presenter at AGC's Construction HR and Training Professionals Conference


DOL Proposes New Rules Expanding Association Health Plan Options

On January 4, 2018, following Presidential Executive Order (EO) 13813, the U.S. Department of Labor (DOL) announced its plan to expand access to healthcare through small business health plans. EO 13813, “Promoting Healthcare Choice and Competition Across the United States,” directed the U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury to develop rules to expand association health plans (AHPs), short-term limited duration insurance, and health reimbursement arrangements (HRAs).

On January 4, 2018, following Presidential Executive Order (EO) 13813, the U.S. Department of Labor (DOL) announced its plan to expand access to healthcare through small business health plans.  EO 13813, “Promoting Healthcare Choice and Competition Across the United States,” directed the U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury to develop rules to expand association health plans (AHPs), short-term limited duration insurance, and health reimbursement arrangements (HRAs).

The DOL’s proposed rule pertains to AHPs only by modifying the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (ERISA) regarding entities (AHPs) that could sponsor group health coverage.  This change would allow employers to band together to offer health coverage if they either are: “(1) in the same trade, industry, line of business, or profession; or (2) have a principal place of business within a region that does not exceed the boundaries of the same State or the same metropolitan area (even if the metropolitan area includes more than one State).” The proposed rule would also allow working business owners, such as sole proprietors and other self-employed individuals, to act as employers for purposes of participating in an AHP and treated as employees of their businesses for purposes of being covered by the group or association’s health plan.

The proposal could increase the flexibility for small employers to join groups or associations to offer insured health coverage in the large group market at potentially more favorable pricing with less restrictive requirements, but questions remain, such as the impact state laws might still have, especially for plans that are not fully insured and generally remain subject to state insurance laws. 

Comments are due by March 6, 2018. AGC will provide input to the DOL on the proposal and notify members of all developments.

For more information, contact Jim Young at youngj@agc.org or 202-547-0133 or Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.


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