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On Jan. 12, the U.S. Department of Labor’s Wage and Hour Division released its final rule to update and clarify its interpretation of joint-employer status under the Fair Labor Standards Act.
ABC applauds the Trump administration for issuing the final rule, which will bring additional clarity to a confusing area of the law, help alleviate unnecessary barriers to and burdens on contractor and subcontractor relationships throughout the construction industry, reduce needless litigation and encourage innovation in the economy.
According to a DOL news release, the final rule includes a four-factor balancing test for determining FLSA joint-employer status in situations where an employee performs work for one employer that simultaneously benefits another entity or individual. The balancing test examines whether the potential joint employer:
ABC’s general counsel, Littler Mendelson P.C., published an analysis with more information on the DOL final rule.
ABC submitted comments in support of the proposed changes during the DOL’s rulemaking process.
The final rule is expected to be published in the Federal Register on Jan. 16 and will go into effect 60 days after the date of publication.
In addition to the DOL rulemaking, the National Labor Relations Board is expected to release its final rule on the joint employer standard, and the U.S. Equal Employment Opportunity Commission intends to issue a proposed rule on its interpretation of when an entity qualifies as a joint employer under the federal EEO laws.
On Jan. 9, ABC filed comments to the National Labor Relations Board in support of a proposed rule that would implement three amendments to the representation election regulations under the National Labor Relations Act. Specifically, the proposal includes amendments to the NLRB’s blocking charge policy, voluntary recognition bar and Section 9(a) recognition in the construction industry.
In its comment letter, ABC wrote:
ABC strongly supports the NLRB’s proposed changes to the three representation rules in the NPRM. In particular, ABC applauds the long overdue overruling of the Staunton Fuel decision, which purported to permit contract language alone to create a Section 9(a) bargaining relationship in the construction industry. Courts have repeatedly rejected the NLRB’s holding in Staunton Fuel, requiring instead that a Section 9(a) relationship can only be established upon a showing of actual evidence of union majority status. The NLRB’s proposed rule is consistent with this judicial authority and with longstanding principles of majority status under Section 9(a).
ABC also supports the NLRB’s proposed change to the blocking charge policies. ABC agrees that the current blocking charge policy impedes, rather than protects, employee free choice. Finally, ABC supports the NLRB’s proposed modification to the immediate voluntary recognition bar.
ABC supports the NLRB’s proposals contained in the NPRM, which are more consistent with the statutory policies of the NLRA than current NLRB rules on these subjects and better protect the Section 7 rights of employees.
Additionally, the ABC led-Coalition for a Democratic Workplace submitted comments in support of the NLRB proposal.
ABC’s general counsel, Littler Mendelson P.C., published an analysis with more information on the proposed rule.
ABC will continue to keep members informed of any developments about this proposal in Newsline.
On Dec. 16, the U.S. Department of Labor’s Wage and Hour Division published its final rule clarifying and updating the regulations governing regular rate requirements under the Fair Labor Standards Act.
According to a DOL news release, the final rule, officially titled the Regular Rate Under the Fair Labor Standards Act, defines what forms of payment employers include and exclude in the FLSA’s “time and one-half” calculation when determining workers’ overtime rates. The final rule also includes additional clarification about other forms of compensation, including payment for meal periods and "callback" pay. The final rule will go into effect on Jan. 15, 2020.
On June 12, ABC submitted comments in support of the regular rate proposed rule.
For more information on the final rule, see the WHD website and Littler Mendelson’s analysis.
The conference report for the National Defense Authorization Act for fiscal year 2020, which authorizes funding for the Department of Defense and other national security programs, contains several provisions that have an impact on contractors and apprenticeship programs in the United States. The legislation passed the House on Dec. 11 and is expected to be enacted into law.
Included in the conference report is a requirement that the U.S. comptroller general conduct a report on DoD contractor violations under the Occupational Safety and Health Act of 1970 or the Fair Labor Standards Act of 1938. It also directs the comptroller general to conduct a study on the contracted practices of the U.S. Army Corps of Engineers that specifically focuses on how the Corps complies with and enforces the Davis-Bacon Act.
The conference report also affects the use of qualified apprentices by military construction contractors, requiring contractors to establish goals for apprentices to consist of 20% of the total workforce employed on a contract and defines qualified apprentice as an employee participating in a Department of Labor registered apprenticeship or certain high-quality industry-recognized apprenticeship programs.
Crane operators engaged in construction activity are required by OSHA to be certified by an entity accredited by a nationally recognized accrediting agency. On Nov. 26, the U.S. Department of Labor’s Occupational Safety and Health Administration issued a temporary enforcement policy for crane operator certifications issued by Crane Institute Certification, which no longer holds such accreditation. As stated in the OSHA press release, “To avoid industry confusion and potential disruptions of construction crane projects, OSHA has issued an enforcement policy for crane operator certifications issued by CIC.”
The OSHA temporary enforcement policy explains the following:
Background
Subpart CC—Cranes and Derricks in Construction requires crane operators to be certified by a certification body “accredited by a nationally recognized accrediting agency,” according to 29 CFR 1926.1427(d). The Crane Institute Certification had previously been accredited by an organization that appeared to meet that requirement. However, CIC has informed OSHA it is not currently accredited by a nationally recognized accrediting agency. CIC also stated that it expects to receive that accreditation within the next few months. Therefore, operator certifications currently being issued by CIC do not meet the requirements of OSHA’s standard. Nevertheless, OSHA understands that CIC was previously accredited, and even after its accreditation lapsed, many employers may have acted in good faith by obtaining crane operator certifications from CIC that they believed would comply with OSHA’s requirements. The agency wishes to avoid unnecessary disruptions in the industry.
Temporary Enforcement Citation Policy
To eliminate construction industry confusion going forward, OSHA will consider whether crane operators acting in good faith obtained certifications issued by CIC prior to Dec. 2, 2019, believing they met the requirements of the standard. Where such good faith is found, employers should not be cited for violating the operator certification requirement of 29 CFR 1926.1427(d). This policy will only apply until the expiration date listed on each certificate, and that date cannot exceed the five-year maximum specified in 29 CFR 1926.1427(d)(4). OSHA will not accept CIC certification (including recertification) issued on or after Dec. 2, 2019, as evidence of compliance with OSHA’s operator certification requirements in 29 CFR 1926.1427. Please contact the Directorate of Construction if there are any questions during compliance inspections about the validity of crane operator certifications issued by CIC.
OSHA intends to revisit this policy when CIC produces evidence that it is accredited in accordance with the requirements found in 29 CFR 1926.1427(d).
On Dec. 5, ABC submitted comments to the U.S. Department of Labor’s Wage and Hour Division in support of its proposal to revise the DOL’s regulation for computing overtime compensation for salaried nonexempt employees who work hours that vary each week (i.e., a fluctuating workweek) under the Fair Labor Standards Act.
According to a DOL news release, the proposal clarifies that bonus and premium payments on top of fixed salaries are compatible with the fluctuating workweek method of compensation, and that supplemental payments must be included when calculating the regular rate of pay as appropriate under the FLSA. The proposed rule also adds examples to the regulation to illustrate the fluctuating workweek method of calculating overtime where an employee is paid a night shift differential and a productivity bonus in addition to a fixed salary.
In its comment letter, ABC applauded the department’s efforts to clarify that bonus payments, premium payments and other additional pay incentives over and above any fixed salary are consistent with the fluctuating workweek method of compensation. ABC further agrees with the department’s rejection of any distinction between “hours-based” or “productivity-based” incentive compensation in applying the fluctuating workweek method of payment.
ABC also pointed out in its letter that it would be helpful for the department to clarify that examples given in the final rule are just that: examples. The department should make clear that examples given do not impose limitations, restrictions or other conditions on applying the overtime calculation.
More information on the fluctuating workweek proposal can be found in the DOL’s news release and on its website.
On Sept. 27, the DOL issued a final rule on overtime, officially named Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, which updates and revises the “white-collar” overtime exemption regulations under the Fair Labor Standards Act. The final rule goes into effect on Jan. 1, 2020.
Overall, the final overtime rule addresses many of the concerns expressed by ABC in its May 21 comment letter in response to the department’s March 22 proposed rule.
The final rule increases the minimum salary level for exemption from $455 per week ($23,660 annualized) to $684 per week ($35,568 annualized). This level is lower than the threshold of $47,476 in the Obama-era 2016 overtime final rule. In Nov. 2016, a federal court blocked the Obama rule from taking effect nationwide.
In addition, the final rule increases from $100,000 to $107,432 the total annual compensation required for employees to qualify under the shorter highly compensated test. The 2019 proposed rule raised the highly compensated salary threshold to $147,414 per year, which ABC opposed. ABC’s comment letter argued that the DOL should retain the highly compensated salary threshold at the 2004 level of $100,000.
The final rule also allows employers to use commissions, bonuses, and other nondiscretionary incentives that are paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices. According to a Littler Mendelson P.C. analysis, “If incentive payments fall short by even $1, however, employers will owe overtime pay to shorted employees for the entire prior year. Under the final rule, employers will have only a single pay period for a final make-up payment to ensure exempt employees receive the full $35,568 for the year.” ABC’s comment letter argued that the 10% cap should be lifted, or at a minimum raised to 25%.
For more information about the overtime rule and what it means for the construction industry, watch ABC’s webinar What Does the New DOL Final Overtime Rule Mean for Construction Industry Employers?, which is available in the ABC Academy for Construction Ethics, Compliance & Best Practices.
To learn more about the overtime rule, see the following DOL’s resources Fact Sheet and Small Entity Compliance Guide. Also visit the DOL website on overtime.
This article is intended for informational purposes only and does not constitute legal advice or opinion.
On Nov. 20, the Trump administration released its Fall 2019 Unified Agenda of Regulatory and Deregulatory Actions. The agenda lists upcoming rulemakings and other regulatory actions from each agency that the administration expects to publish through the end of the year and into 2020. U.S. Department of Labor In the Fall Unified Agenda, DOL’s Employment and Training Administration announced plans to issue the apprenticeship final rule, titled Apprenticeship Programs, Labor Standards for Registration, Amendment of Regulations, in April 2020. This proposed rule, which was issued in June, came at the instruction of President Trump’s Executive Order 13801, Expanding Apprenticeships in America, which asks the secretary of labor, in consultation with the secretaries of education and commerce, to consider proposing regulations that establish guidelines for third parties to certify industry-recognized apprenticeship programs. ABC submitted comments on the proposed rule.
The Occupational Safety and Health Administration plans to issue a proposed rule to amend the Welding and Cutting Standard in construction to eliminate any perceived ambiguity about the definition of "confined space" that applies to welding activities in construction. The agency expects to release the proposal in February 2020. OSHA is also expected to issue a proposed rule with corrections and amendments to the August 2010 final standard for cranes and derricks, which includes a large number of provisions designed to improve crane safety and reduce worker injury and fatality, in May 2020.
In June 2020, OSHA expects to issue a proposed rule on occupational exposure to crystalline silica to determine if revisions to Table 1 in the standard for construction may be appropriate. ABC submitted comments on OSHA’s request for information on table 1 of the silica standard as part of the Construction Industry Safety Coalition.
In Oct. 2018, OSHA issued a memorandum clarifying its position on workplace safety incentive programs and post-incident drug testing included in the Obama administration’s 2016 Improve Tracking of Workplace Injuries and Illnesses final rule, also known as the Electronic Injury Reporting and Anti-Retaliation final rule. OSHA plans to issue a proposed rule in November 2020 to memorialize its memorandum position regarding post-incident drug testing or safety incentive programs.
The Wage and Hour Division is expected to issue final rules for its regular rate and joint employer status under the Fair Labor Standards Act rulemakings in November and December 2019, respectively. ABC submitted comments on both regular rate and joint employer proposals in June. Additionally, WHD plans to issue an RFI on the Family and Medical Leave Act of 1993 to solicit comments on ways to improve its regulations to better protect and suit the needs of workers and reduce administrative and compliance burdens on employers. The department plans to issue the RFI in November 2019. For more information on upcoming DOL rulemakings, see the department’s Fall 2019 agenda. National Labor Relations Board It is expected the NLRB will issue its final rule on the joint employer standard in December 2019. ABC and the ABC-led Coalition for a Democratic Workplace submitted comments in support of the NLRB’s joint employer proposal. The NLRB also plans to revise its representation election regulations. The rulemaking is expected to be split into two phases and focus on amendments to the board’s representation case procedures adopted by the 2014 “ambush” election final rule and amendments relating to the procedures for the conduct of representation elections under the board’s representation case procedures. The NLRB plans to issue the final rules in November 2019 and January 2020, respectively.
In February 2020, the NLRB also plans to issue a proposed rule establishing standards under the National Labor Relations Act for access to an employer's private property. Environmental Protection Agency Following the September 2019 final rule repealing the 2015 Clean Water Rule, also known as the Waters of the United States final rule, the Environmental Protection Agency and U.S. Army Corps of Engineers expect to issue a final rule in January 2020 to re-evaluate and revise the definition of WOTUS in accordance with Executive Order 13778. Equal Employment Opportunity Commission The Equal Employment Opportunity Commission intends to issue a set of proposed rules in January 2020 to amend its regulation of employer-sponsored wellness programs. In August 2017, the U.S. District Court for the District of Columbia invalidated the EEOC’s final regulations on the operation of voluntary wellness programs under the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act, and ordered the EEOC to reconsider the rulemakings. In accordance with the court’s ruling, the EEOC rescinded portions of its ADA and GINA wellness rules on Dec. 20, 2018.
The EEOC also intends to issue a proposed rule in December explaining the agency’s interpretation of when an entity qualifies as a joint employer based on the definitions of the statutory terms "employee" and/or "employer" under the federal EEO laws.
Give your craft trainees the experience of lifetime a by sponsoring them as competitors in the 2020 National Craft Championships, which will be held in Nashville, Tennessee, during ABC Convention 2020, March 23-27. The intent-to-compete deadline is Dec. 13, 2019. Click here to register your competitor! When you visit ncc.abc.org, take a minute to read about the new written exam opportunity.
The NCC is offering two team competitions for journey-level workers. The commercial team competition includes a carpenter, electrician, plumber and a sheet metal/HVAC tech. The industrial team competition has been reinvented and now includes a pipefitter, electrician and an insulator.
What’s new in 2020? NCC offers Commercial Metal Stud Framing and Drywall as a full competition after a successful demonstration this year and introduces TIG Welding as a new demonstration that will grow into a competition in 2021. Visit ncc.abc.org to see all the 2020 craft trainee and apprentice competitions.
Some competitions have size limitations, so don't delay in sending your intent-to-compete forms. Competitors may be sponsored by an ABC chapter, ABC chapter-approved training sponsor or by an ABC member firm.
In August, ABC launched the “One Post a Day” social media campaign to share positive messages with ABC chapters every day that showcase our commitment to the merit shop construction industry as well as safety and workforce development.
This campaign has been successful and, based on recent feedback, we decided to make some changes to make it even more targeted and effective. Moving forward, we will only be sharing social media content based around larger industry initiatives, such as Safety Week, Careers in Construction Month and Women in Construction Week, to name a few. This means you’ll be receiving content a few times throughout the year rather than every day as we’ve done previously.
Be on the lookout for emails about these initiatives come 2020, and feel free to reach out to Rebecca Gale, communications manager, should you have any questions.