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On Jan. 14, ABC submitted comments to the U.S. Department of Labor’s Occupational Safety and Health Administration on its Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings proposed rule, urging the agency to withdraw the current rule as proposed and revise it to allow greater flexibility for affected industries, and at a minimum develop a separate standard for the construction industry. OSHA’s proposed rule would apply to all employers conducting outdoor and indoor work in all general industry, construction, maritime and agriculture sectors where OSHA has jurisdiction and require employers to develop programs and implement controls to protect employees from heat hazards. In addition, as a steering committee member, ABC joined the Construction Industry Safety Coalition and the Coalition for Workplace Safety comment letters.

ABC’s states in its comment letter:

“ABC strongly supports worker health and safety and protection from heat injury and illness, while maintaining flexibility for the fluid nature of the construction environment. Throughout the heat rulemaking, ABC has continued to urge OSHA to focus on the key concepts of ‘water, rest, shade’ and provide construction employers the necessary flexibility to make such a standard effective.

“ABC believes employers should equip their employees and leadership teams to develop their own health and safety plans, unique to their jobsites. We also provide tools to employers so that they can equip and empower supervisors to recognize the signs and symptoms of heat illness as well as provide necessary rest, water and shade that is dependent on local conditions. ABC’s members work to ensure that jobsites are safe and strive to implement the most appropriate practices for working in extreme heat conditions that focus on the individual worker.

“Unfortunately, the more than 1,000-page proposed rule imposes prescriptive, complicated requirements on construction industry employers, limiting all flexibility, which could weaken contractor efforts to prevent heat stress for workers. Flexibility is limited because OSHA has imposed rigid requirements, which include heat triggers, the acclimatization schedule for new and returning employees, mandatory rest breaks and the use of a heat safety coordinator, among others. OSHA failed to recognize the practical applications needed on construction jobsites. Employers and employees need flexibility to account for differences among worksites, geographical locations, work responsibilities and available technology. Additionally, construction jobsites vary in size, time, scope and duration, and flexibility is needed to ensure feasibility for compliance.

“As a member of the CISC steering committee, ABC has consistently urged OSHA to develop a separate regulatory approach for the construction industry. To combine all employers conducting outdoor and indoor work in general industry, construction, maritime and agriculture sectors into one regulatory approach is misguided. ABC and its coalition partners urged OSHA to recognize that there are significant differences in the types of job tasks, the work performed and even the environmental conditions in which construction industry employees work. Moreover, there is existing precedent for the agency to develop a separate standard for the construction industry based on previous rulemakings.

“ABC strongly urges OSHA to withdraw the current rule as proposed and revise it to allow greater flexibility for affected industries, and at a minimum develop a separate standard for the construction industry.”

ABC’s comments also state that the proposed rule’s heat triggers are unworkable; rest breaks should be flexible; the proposed rule’s acclimatization schedule for new and returning employees will be particularly onerous for the construction industry; OSHA lacks the statutory authority to define “employee representative”; OSHA should clarify who can serve as the heat safety coordinator; effective two-way communication should be practicable; and the proposed rule’s prescriptive requirements will create challenges for small businesses.

Learn more about ABC’s position on the proposed rule in its comment letter.

ABC will continue to monitor this rulemaking and provide updates in Newsline.

Background:

On Oct. 27, 2021, OSHA issued an Advance Notice of Proposed Rulemaking on Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings, which requested information on how to implement regulations to protect workers from hazardous heat. ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments in response to the ANPRM on Jan. 26, 2022.

On April 12, 2022, OSHA announced a National Emphasis Program on Outdoor and Indoor Heat-Related Hazards, which sets out a targeted enforcement effort and reiterates OSHA’s compliance assistance and outreach efforts.

On July 27, 2023, OSHA issued a heat hazard alert to remind employers of their obligation to protect workers against heat illness or injury in outdoor and indoor workplaces. The department also announced that OSHA will intensify its enforcement where workers are exposed to heat hazards, with increased inspections in high-risk industries like construction and agriculture. These actions will fully implement the agency’s National Emphasis Program on heat, announced in April 2022, to focus enforcement efforts in geographic areas and industries with the most vulnerable workers. On Sept. 29, OSHA issued new resources to protect workers from the effects of heat.

In December 2023, ABC submitted comments as a steering committee member of the CISC and the CWS in response to OSHA’s potential standard for Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings following its review of the Small Business Advocacy Review Panel materials and the SBAR Panel’s final report. In September, the SBAR Panel hosted six video conferences to gather input from small entity representatives. An ABC member participated as a SER during one of the video conferences. The panel’s final report was issued on Nov. 3.

On Aug. 30, 2024, the OSHA published its Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings proposed rule. Read ABC’s release on the proposed rule. The deadline for the public to submit written comments on the proposed rule was extended to Jan. 14, 2025, from the original deadline of Dec. 30. 

Elements of the proposal include the following:

  • Training requirements for supervisors, heat safety coordinators and employees;
  • Developing and implementing a worksite heat injury and illness prevention plan (a written plan must be created for employers with more than 10 employees);
  • An initial heat trigger with a heat index of 80°F (or equivalent wet bulb globe temperature). Requirements for employers include providing drinking water, break areas for indoor and outdoor worksites, acclimatization of new and returning employees, paid rest breaks if needed and more;
  • A high heat trigger with a heat index of 90°F (or equivalent wet bulb globe temperature). Requirements for employers include mandatory rest breaks of 15 minutes at least every two hours (an unpaid meal break may count as a rest break); warning signs for excessively high heat areas and more;
  • Two different options for acclimatization procedures for new and returning workers; and
  • Additional recordkeeping requirements.

OSHA resources on the proposed rule:

On Jan. 17, ABC sent a letter to the U.S. House of Representatives Ways and Means Committee emphasizing the significance of making permanent the provisions of the Tax Cuts and Jobs Act for America’s working families as the committee held a hearing focused on the family and business provisions included in the Tax Cuts and Jobs Act.

In the letter, ABC urged the committee to support the following critical tax policies, which are vital to the continued success and economic prosperity of our industry:

  • Maintaining parity for pass-through entities (TCJA Section 199A)
  • Continuation of TCJA estate tax treatment
  • Revived expensing of R&D costs
  • Restoration of 100% bonus depreciation
  • Opposition to exclusionary labor mandates in IRA green tax credits

In the hearing, there was increased focus on addressing the looming expiration of the Section 199A deduction, which, if allowed to expire, would result in a 20% increased tax on pass-throughs, while C-corps and publicly traded companies will continue to enjoy their lower, 21% permanent rate.

Chairman Jason Smith, R-Mo.:

“Small businesses are facing a 43.4% tax rate if the 199A small business deduction, as I refer to it, expires. This looming threat impacts decisions they’re making today about whether to invest, grow, hire.”

Rep. Vern Buchannan, R-Fla.:

“As chairman of the Florida Chamber, I can tell you we had 130,000 businesses, 90% to 95% of them were pass-through entities. And you’re dealing with these potential tax hikes, that’s what scares a lot of people.”

Rep. Kevin Hern, R-Okla.:

“Certainty is important. And we’re getting ready to see the largest tax increase in American history starting January 2026 if we don’t do something. … [Section] 199A, it puts parity between small business pass-throughs and C corporations, and 99% of businesses in America are pass-throughs. Are there some larger than others? Absolutely. Are we going to be punitive to those who have fought and grown their businesses as I did, from one person to 1,200 employees? Are we evil because we created jobs?”

Rep. Beth Van Duyne, R-Texas, referencing the 199A roundtable ABC participated in last year:

“As part of my work on the Main Street Tax Team, we were able to get out of D.C. and talk to real business owners. We heard about the successes of policies such as Section 199A, which created over $66 billion in savings for Main Street businesses. One of the businesses I met with was Republic National Distributing Co., where I held a roundtable including 25 small businesses, including roofers, community banks and realtors. These are the businesses across the United States who are benefiting from this, and this is why Congress must act.”

ABC will continue to advocate for the extension of the pro-growth policies of the Tax Cuts and Jobs Act, as lawmakers consider legislative action in the 119th Congress.

In a win for federal contractors, on Jan. 13, the Federal Register published notification of the Federal Acquisition Regulatory Council’s withdrawal of a controversial ABC-opposed proposed rule, Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk.

At the direction of President Joe Biden’s Executive Order 14030, on Nov. 14, 2022, the FAR Council issued a proposed rule to amend the Federal Acquisition Regulation to require contractors awarded at total of $50 million in federal contracts annually to disclose their direct and some indirect greenhouse gas emissions and set GHG emission reduction targets.

Under the proposed rule, certain federal contractors would be required to inventory the annual GHG emissions of their operations, supply chain, employees and final products in certain circumstances. The proposal required federal contractors to disclose this information to the federal government and set targets for reducing GHG emissions. Federal contractors that failed to comply with these requirements would have been deemed nonresponsible and ineligible for federal awards.

On Feb. 13, 2023, ABC submitted comments opposing the proposal’s overly burdensome, costly and punitive approach to regulating GHG emissions of federal contractors.

“The withdrawal of the FAR Council’s GHG proposal is welcome news for federal contractors that cited its burdensome compliance requirements as untenable for the construction industry,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “Many ABC federal contractor compliance professionals are committed to reducing carbon emissions, but expressed concerns about the ability of contractors to accurately calculate the GHG emissions of a project’s workforce and its construction materials and supply chain.”

While ABC understands the need for sensible environmental policies that balance the protection of the environment with the objectives and costs of regulatory compliance, ABC’s comments outlined how the proposed rule failed to strike that balance.

Citing a lack of sufficient time to finalize the proposed rule, “particularly given the large volume of public comments and the policy issues they raised,” the FAR Council said in a notice that it is withdrawing the proposal on Jan. 13.

In that notice, the council said, “[T]he agencies’ overall analysis of public comments indicates evolving practices and use of standards in industry, and since the publication of the proposed rule, differing domestic and international regulations covering greenhouse gas disclosures have been created.”

A final FAR Council GHG rule would have likely run into legal challenges by federal contractors and trade associations. For now, the rule is dead, but it is possible certain blue states and communities may pursue similar GHG disclosure requirements for state and local contractors.

ABC will continue to monitor and provide feedback on this issue.

In a win for ABC and its members, on Dec. 26, a 5th Circuit Court panel reinstated the nationwide injunction against the Corporate Transparency Act’s beneficial ownership information reporting requirement.

On Dec. 3, a federal judge in the U.S. District Court for the Eastern District of Texas issued the nationwide preliminary injunction against enforcement of the BOI reporting requirements, but upon appeal by the government, the 5th Circuit Court granted a stay on the injunction. The reinstatement of the injunction provides small businesses with necessary relief while litigation continues.

The same panel announced that it would hear arguments on March 25 on whether to keep the injunction in place while the case is heard by the full court, guaranteeing that the injunction will remain in place through at least the end of March 2025. As a result, covered entities do not need to file their beneficial ownership information reports prior to that proceeding.

“A nationwide injunction of the CTA’s reporting requirements will allow small business contractors to breathe easy as we await a decision from the court,” said Kristen Swearingen, ABC vice president of legislative & political affairs. “The CTA’s onerous reporting requirements would impact small business operations, forcing companies to dedicate time and resources to comply or risk lofty penalties. ABC applauds the decision by the 5th Circuit Court panel and urges the court to keep the injunction in place and side with the small business community when delivering its final decision.”

Background on the Corporate Transparency Act

On Jan. 1, 2021, Congress enacted into law the Corporate Transparency Act, which establishes a new framework for the reporting, maintenance and disclosure of beneficial ownership information in order to better enable critical national security, intelligence and law enforcement efforts to counter money laundering, the financing of terrorism and other illicit activity.

ABC, along with a coalition of small business organizations, submitted a letter to congressional leadership expressing concerns on the amendments incorporating the CTA into the 2021 National Defense Authorization Act, stating the enactment of the CTA would decrease privacy protections and slow the economic recovery of Main Street businesses.

ABC responded to Treasury’s Financial Crimes Enforcement Network notice of proposed rulemaking seeking public input on how best to implement the reporting requirements of the CTA, as well as the CTA’s provisions regarding FinCEN’s maintenance and disclosure of reported information in comments. ABC’s comments noted that the framework prescribed by the CTA will require millions of small businesses, including nearly every employer with 20 or fewer employees, to report to FinCEN certain personal information of their beneficial owners and update that information periodically throughout the life of the business.

ABC also argued that America’s small businesses—which make up most of ABC’s members—are typically not staffed or equipped to understand and comply with reporting obligations similar to those under the CTA. However, per the CTA, failure to comply can result in significant fines and imprisonment for these small business owners.

According to a notice from the S-Corp Association posted on Dec. 23, an appellate court ruled in favor of the federal government in reversing a nationwide injunction against the Corporate Transparency Act. The decision means that the CTA’s reporting requirements are now back in full effect, giving the approximately 20 million entities who have not yet submitted their filings just a few days to do so.

The injunction that’s currently in place was ordered by a Texas court, which found that the CTA is “likely unconstitutional” and that Congress went beyond its authority in enacting the statute. The government quickly requested that the injunction be stayed pending a final ruling.

According to the U.S. Department of Treasury’s Financial Crimes Enforcement Network webpage, in light of the Dec. 23 federal Court of Appeals decisionthe Beneficial Ownership Information Reporting Requirements are now in effect, with deadline extensions: “Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)” Further information on BOI reporting requirements can be found on FinCEN’s website.

In response, S-Corp, in addition to more than a dozen organizations and 25 states, filed amicus briefs urging the 5th Circuit to keep the injunction in place. Our argument was that doing so would give millions of businesses more time to learn about their new filing obligations while giving the courts time to make a final ruling. As a practical matter, lifting the injunction this close to the filing deadline also presents a logistical nightmare for countless businesses.

That nightmare is about to become a reality. At of the start of December, federal regulators estimated that just a third of the entities required to file under the CTA had done so. Given the massive education gap we know exists, there’s little doubt that most of the remaining 20 million entities will not be in a position to comply with the filing requirements before the end of the year.

This fight is not over. Next step on the advocacy side will be to work with the incoming Trump administration to delay the filing deadline administratively. This won’t help existing companies which already reported their BOI, but it will help new incorporations and those businesses that failed to file.

Over at the courts, we expect the NFIB to appeal the 5th Circuit Court decision. Word is an expedited appeal hearing on the stay is already in the works, but that hearing is unlikely to take place before the end of the year.

Meanwhile, on the merits, today’s court order argues that the government is likely to succeed in its defense of the CTA, but that decision was written by two Democratic judges, so it may not reflect the views of the full 5th Circuit or the U.S. Supreme Court.

Finally, we have yet to hear from the 11th Circuit, which is considering the government’s appeal of the North District of Alabama District Court decision that the CTA is unconstitutional. That decision could come down any day now.

So bad news right before Christmas, but lots more to come on the CTA. Looking forward to better results next year.

ABC encourages members and small business owners to consult counsel about the Dec. 23 decision.

On Dec. 11, the U.S. Department of Labor’s Occupational Safety and Health Administration announced its final rule on Personal Protective Equipment in Construction, which adds specific language requiring that employers provide PPE that properly fits construction industry workers. The change aligns the construction industry standard with the standard already in place for general industry. The final rule is effective on Jan. 13, 2025. To learn more about the final rule read OSHA’s Frequently Asked Questions.

Tim Irving, acting director of the directorate of construction at OSHA, wrote about the final rule, stating that, “Unlike the general industry standard, the construction industry standard did not clearly state that PPE must adequately fit each affected employee. The revision requires that equipment fit each affected employee properly to protect them from occupational hazards.”

On July 20, 2023, OSHA issued a proposed rule clarifying the requirements for the fit of personal protective equipment in construction. Read the DOL’s press release. ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments to OSHA in response to the PPE proposed rule on Sept. 18.

Learn more about personal protective equipment in construction.

On Dec. 2, the U.S. Department of Labor’s Occupational Safety and Health Administration announced that it has extended the public comment period for its Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings proposed rule until Jan. 14, 2025, from the original deadline of Dec. 30. ABC will be submitting comments on the proposal, and public stakeholders can submit comments as well.

OSHA published the proposed rule on Aug. 30. It would apply to all employers conducting outdoor and indoor work in all general industry, construction, maritime and agriculture sectors where OSHA has jurisdiction and require employers to develop programs and implement controls to protect employees from heat hazards. Read ABC’s release on the proposed rule.

Elements of the proposal include the following:

  • Training requirements for supervisors, heat safety coordinators and employees;
  • Developing and implementing a worksite heat injury and illness prevention plan (a written plan must be created for employers with more than 10 employees);
  • An initial heat trigger with a heat index of 80°F (or equivalent wet bulb globe temperature). Requirements for employers include providing drinking water, break areas for indoor and outdoor worksites, acclimatization of new and returning employees, paid rest breaks if needed and more;
  • A high heat trigger with a heat index of 90°F (or equivalent wet bulb globe temperature). Requirements for employers include mandatory rest breaks of 15 minutes at least every two hours (an unpaid meal break may count as a rest break), warning signs for excessively high heat areas and more;
  • Two different options for acclimatization procedures for new and returning workers; and
  • Additional recordkeeping requirements.

OSHA resources on the proposed rule:

Background:

On Oct. 27, 2021, OSHA issued an Advance Notice of Proposed Rulemaking on Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings, which requested information on how to implement regulations to protect workers from hazardous heat. ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments in response to the ANPRM on Jan. 26, 2022.

On April 12, 2022, OSHA announced a National Emphasis Program on Outdoor and Indoor Heat-Related Hazards, which sets out a targeted enforcement effort and reiterates OSHA’s compliance assistance and outreach efforts.

On July 27, 2023, OSHA issued a heat hazard alert to remind employers of their obligation to protect workers against heat illness or injury in outdoor and indoor workplaces. The department also announced that OSHA will intensify its enforcement where workers are exposed to heat hazards, with increased inspections in high-risk industries like construction and agriculture. These actions will fully implement the agency’s National Emphasis Program on heat, announced in April 2022, to focus enforcement efforts in geographic areas and industries with the most vulnerable workers. On Sept. 29, OSHA issued new resources to protect workers from the effects of heat.

In December 2023, ABC submitted comments as a steering committee member of the Construction Industry Safety Coalition and the Coalition for Workplace Safety in response to OSHA’s potential standard for Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings following its review of the Small Business Advocacy Review Panel materials and the SBAR Panel’s final report. In September, the SBAR Panel hosted six video conferences to gather input from small entity representatives. An ABC member participated as a SER during one of the video conferences. The panel’s final report was issued on Nov. 3.

ABC strongly supports worker safety and protection from heat injury and illness, while maintaining flexibility for the fluid nature of the construction environment. Employers play a key role in providing training and awareness regarding heat protection, and ABC will continue to support members in ensuring preparedness for heat-related issues through a wide range of resources.

On Dec. 3, in a win for ABC and its members, a federal judge in the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against enforcement of the Corporate Transparency Act’s beneficial ownership information reporting requirements.

In Texas Top Cop Shop, Inc., et al. v. Garland, et al. the judge determined that, because one of the plaintiffs, the National Federation of Independent Business, represents members nationwide, a nationwide injunction was necessary to provide relief to small businesses through the conclusion of legal proceedings. Prior to the court’s ruling, small businesses that met certain criteria would have had to file BOI reports with the U.S. Department of the Treasury by Jan. 1, 2025.

“The ruling is a significant win for small business contractors around the country,” said Kristen Swearingen, ABC vice president of legislative & political affairs. “The CTA’s onerous reporting requirements would have significantly affected small business operations, forcing companies to dedicate time and resources or risk costly penalties. ABC applauds the court’s decision and will continue to promote a regulatory environment that protects America’s small business community.”

On March 1, 2024, a federal judge ruled that the CTA was unconstitutional after a 16-month legal battle led by the National Small Business Association and supported by the S-Corporation Associates of America and members of the Main Street Employers Coalition, including ABC. However, the court limited its decision only to the members of the NSBA. The Dec. 3 decision applies to companies nationwide and will remain in effect until the conclusion of legal proceedings, at which point the court may enter a permanent injunction. In the meantime, the government will likely appeal the preliminary injunction. ABC encourages members and small business owners to consult counsel about the Dec. 3 decision.

Background on the Corporate Transparency Act

On Jan. 1, 2021, Congress enacted into law the Corporate Transparency Act, which establishes a new framework for the reporting, maintenance and disclosure of beneficial ownership information in order to better enable critical national security, intelligence and law enforcement efforts to counter money laundering, the financing of terrorism and other illicit activity.

ABC, along with a coalition of small business organizations, submitted a letter to congressional leadership expressing concerns on the amendments incorporating the CTA into the 2021 National Defense Authorization Act, stating the enactment of the CTA would decrease privacy protections and slow the economic recovery of Main Street businesses.

ABC responded to Treasury’s Financial Crimes Enforcement Network notice of proposed rulemaking seeking public input on how best to implement the reporting requirements of the CTA, as well as the CTA’s provisions regarding FinCEN’s maintenance and disclosure of reported information in comments. ABC’s comments noted that the framework prescribed by the CTA will require millions of small businesses, including nearly every employer with 20 or fewer employees, to report to FinCEN certain personal information of their beneficial owners and update that information periodically throughout the life of the business.

ABC also argued that America’s small businesses—which make up most of ABC’s members—are typically not staffed or equipped to understand and comply with reporting obligations similar to those under the CTA. However, per the CTA, failure to comply can result in significant fines and imprisonment for these small business owners.

ABC continues to fight against the Biden administration’s anti-growth and oppressive regulatory agenda, which creates significant uncertainty and barriers to job creation.

ABC’s legal challenges against the Biden administration’s final rules include:

Victories

DOL: Overtime

On Nov. 15, ABC applauded the decision of the U.S. District Court for the Eastern District of Texas, which vacated the U.S. Department of Labor’s controversial 2024 final rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. The rule changed overtime regulations under the Fair Labor Standards Act.

The court found that the Biden DOL’s 2024 overtime rule’s July 1, 2024, increase was unlawful as well as the scheduled Jan. 1, 2025, increase. Specifically, DOL’s final rule increased the minimum annual salary level threshold for exemption to $43,888 on July 1, and it was scheduled to increase to $58,656 on Jan. 1, 2025. In addition, the threshold for highly compensated employees increased to $132,964 on July 1, 2024, and was scheduled to increase to $151,164 on Jan. 1, 2025. Further, salary thresholds would have been updated every three years starting on July 1, 2027. ABC’s general counsel, Littler Mendelson, published an article discussing the court decision.

As a result of this decision, the minimum salary threshold for exemption is once again set to $35,568, and the threshold for highly compensated employees is set to $107,432. In May, ABC joined a coalition of business groups in filing a complaint in the U.S. District Court for the Eastern District of Texas challenging the DOL’s overtime rule.

ABC immediately issued a news release applauding the decision stating, “This decision is the correct one, and an important win for ABC members and the rest of the regulated community. It’s also no surprise. In 2017, this court permanently enjoined the DOL’s 2016 overtime rule on similar grounds, writing that the rule increased the minimum salary level threshold for exemption far beyond a level which the DOL is permitted to adopt. The court also found unlawful the automatic indexing provision in the new rule that would have further increased the salary threshold without the notice-and-comment rulemaking required by the Administrative Procedure Act.”

On Nov. 26, the DOL appealed the Nov. 15 decision. Continue to monitor Newsline for further updates.

NLRB: Joint Employer

On July 19, 2024, the National Labor Relations Board moved to withdraw its appeal of the U.S. District Court for the Eastern District of Texas’ decision to vacate the 2023 Joint-Employer final rule, which means the court’s favorable decision will become final. The Board appealed the decision on May 7.

On March 8, 2024, the district court vacated the 2023 final rule. Under the court’s decision, the ABC-supported 2020 Joint-Employer Final Rule, which provides clear criteria for companies to apply when determining their joint-employer status, remains in effect today.

On Nov. 9, 2023, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit challenging the NLRB’s final rule for violating the National Labor Relations Act and acting arbitrarily and capriciously in violation of the Administrative Procedure Act.

ABC is pleased the Board decided to withdraw its appeal of the court’s decision and that the court’s ruling to block the NLRB’s radical and overbroad joint-employer standard is now final. The 2023 final rule would have disrupted long-established, efficient operational processes that are followed by construction service providers who work together to build America. And it clearly would have had a harmful effect on a significant segment of the construction industry: small businesses. Because the ABC-supported 2020 final rule remains in effect, contractors will be better able to work and coordinate with multiple employers without fear of being unexpectedly and unfairly found to be joint employers.

FTC: Ban on Noncompete Agreements

In a win for ABC members, on Aug. 20, the U.S. District Court for the Northern District of Texas blocked the Federal Trade Commission from implementing its rule to ban noncompete agreements. The court found that the FTC lacked statutory authority to promulgate the rule and that the rule is arbitrary and capricious. This means the rule will not be enforced or otherwise take effect on Sept. 4, 2024.

As expected, on Oct. 18, the FTC appealed the court’s Aug. 20 decision. ABC will continue to monitor the litigation and provide any updates in Newsline. For now, though, the Aug. 20 decision will remain in effect during the pendency of the appeal.

On July 3, the U.S. District Court for the Northern District of Texas issued a limited preliminary injunction and stay of the FTC’s rule.

On May 14, ABC joined a broad group of trade associations in filing an amicus brief in support of the plaintiffs’ request for injunctive relief against the FTC’s final rule to ban noncompete clauses.

ABC is extremely pleased with the court’s decision and has consistently stated that ABC members have valid business justifications for utilizing noncompete agreements, such as protecting confidential information and intellectual property. The new rule would have had a harmful effect on member companies as well as their employees, forcing employers to rework their compensation and talent strategies.

Pending Federal Lawsuits

FAR Council: Use of Project Labor Agreements for Federal Construction Projects 

On Feb. 4, 2022, President Joe Biden signed Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects. Effective Jan. 22, 2024, following a multiyear rulemaking by the Federal Acquisition Regulatory Council, federal agencies now require every prime contractor and subcontractor on a federal construction project of $35 million or more performed within the United States to sign a PLA as a condition of winning a taxpayer-funded contract.

On March 28, 2024, ABC and its Florida First Coast chapter filed suit against the federal government seeking to overturn the final rule, asserting that President Biden lacks the legal and constitutional authority to impose the mandate. As federal contractors await a decision, ABC members are filing bid protests against federal solicitations containing PLA mandates on a case-by-case basis.

When mandated by governments, PLAs increase construction costs to taxpayers by 12% to 20%, reduce opportunities for qualified contractors and their skilled craft professionals and exacerbate the construction industry’s worker shortage of more than half a million people in 2024.

PLA mandates are bad public policy because they effectively exclude almost 90% of the U.S. construction workforce who do not belong to a union from building taxpayer-funded projects.

ABC and a diverse coalition of construction industry stakeholders and taxpayer watchdogs will continue to oppose this anti-competitive and inflationary final rule and call on the Biden-Harris administration to instead promote policies that will welcome fair and open competition from all contractors to ensure the best value possible for taxpayer investments

Learn more about government-mandated PLAs.

DOL: Updating the Davis-Bacon and Related Acts Regulations

On Aug. 23, 2023, the U.S. Department of Labor issued its final rule, Updating the Davis-Bacon and Related Acts Regulations. The regulation’s drastic revisions to existing rules regarding government-determined prevailing wage rates that must be paid to construction workers on federal and federally assisted construction projects funded by taxpayers took effect on Oct. 23. All contracts entered into after Oct. 23 are subject to the new rule’s provisions, and in certain situations the rule may apply to preexisting contracts.

On Nov. 7, 2023, ABC and its Southeast Texas chapter announced the filing of a complaint in the U.S. District Court for the Eastern District of Texas, challenging the DOL’s final rule.

In a separate lawsuit by the Associated General Contractors of America, on June 24, 2024, the U.S. District Court for the Northern District of Texas granted a nationwide preliminary injunction that blocks some provisions of the final rule. These provisions include those expanding coverage to include manufacturing facilities miles away from projects and delivery truck drivers spending any amount of time on a jobsite, as well as the imposition of the rule on already executed contracts, among other things.

ABC’s pending federal lawsuit targets these and other controversial provisions in the DOL’s extreme overhaul of more than 50 Davis-Bacon Act regulations that undermine commonsense reforms put in place by the Reagan administration.

Far from “updating” the DOL’s enforcement of the Davis-Bacon Act, the final rule returns to failed policies of the 1970s and unlawfully expands coverage of prevailing wage requirements onto new projects and industries and increases its regulatory burden on small construction contractors working on federally funded contracts. The DOL’s final rule forces ABC to take legal action to address its numerous illegal provisions and protect its members, the free market and taxpayers from the devastating impacts of this regulation.

Learn more about the DOL’s Davis-Bacon and Related Acts final rule.

DOL: Worker Walkaround Representative Designation Process

On April 1, 2024, OSHA issued its Worker Walkaround Representative Designation Process final rule, which allows employees to choose a third-party representative, such as an outside union representative or community organizer, to accompany an OSHA safety inspector into nonunion workplaces during site inspections. The final rule went into effect on May 31.

On May 21, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit in the U.S. District Court for the Western District of Texas, Waco Division against OSHA’s final rule.

OSHA’s overreach does nothing to promote workplace health and safety, but instead pushes the Biden-Harris administration’s “all-of-government” agenda to encourage unions and collective bargaining.

ABC repeatedly told OSHA there is no business case for this rule and no benefit during a compliance inspection. OSHA can have a bigger impact on jobsite safety by fostering positive partnerships with employers and promoting safety practices that produce results. Such best practices can be found in ABC’s 2024 Safety Performance Report, which found top-performing contractors that participate in ABC’s STEP Safety Management System® are nearly six times safer than the industry average.

Learn more about the OSHA Worker Walkaround final rule.

DOL: Independent Contractor

On Jan. 10, 2024, the DOL’s Wage and Hour Division issued the final rule on Employee or Independent Contractor Classification Under the Fair Labor Standards Act, which rescinds the ABC-supported 2021 final rule and replaces it with a confusing multifactor analysis to determine whether a worker is an employee or an independent contractor. The final rule went into effect on March 11.

Thereafter, ABC, its Southeast Texas chapter, the Coalition for Workforce Innovation and the Financial Services Institute filed a motion in the U.S. Court of Appeals for the 5th Circuit requesting that it lift the stay of appeal and remand the case to the U.S. District Court for the Eastern District of Texas so that the district court may consider whether the 2024 final rule complies with the APA in its attempt to rescind and replace the current 2021 final rule. In 2022, the district court found that the DOL violated the APA when it first attempted to delay and later withdraw the 2021 final rule. The court vacated these efforts.

On March 5, ABC, its Southeast Texas chapter, the Coalition for Workforce Innovation and five other organizations filed an amended complaint in the U.S. District Court for the Eastern District of Texas, arguing that the 2024 independent contractor final rule is unlawful and a violation of the APA.

Replacing the commonsense 2021 final rule was the wrong move by the DOL. The 2024 final independent contractor rule is confusing, vague and unworkable and will harm construction workers classified as independent contractors because they will lose crucial opportunities for work. Further, the difficult-to-interpret standard strips independent contractors of basic freedoms and rights to choose how they work.

Learn more about the DOL’s independent contractor final rule.

Continue to monitor ABC’s legal challenges by visiting ABC’s Regulatory RoundupRegulatory Resource Hub on Final Rules and Newsline.

On Nov. 12, a federal court of appeals issued a major decision in the Marin Audubon Society v. Federal Aviation Administration case concerning the validity of National Environmental Policy Act regulations governing federal environmental reviews. The ruling will potentially have wide-ranging implications for federal permitting actions subject to NEPA reviews.

In the decision, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled that NEPA’s enacting legislation did not grant rulemaking authority to the White House’s Council on Environmental Quality and therefore CEQ cannot issue binding regulations directing how federal agencies conduct NEPA reviews.

CEQ’s regulations have provided the framework for NEPA reviews since 1978, with changes implemented across various presidential administrations. Most recently, ABC opposed a May 2024 CEQ final rule to impose unnecessarily burdensome new requirements on NEPA reviews.

The implications of this decision are highly uncertain at this time. Significant impacts to NEPA reviews are possible, including the potential for varying procedures across different federal agencies, elimination of categorical exclusions allowing agencies to streamline NEPA reviews and further litigation to vacate agency actions based on CEQ regulations.

Currently, the decision only applies to the D.C. Circuit’s jurisdiction and does not explicitly vacate any specific CEQ regulations. NEPA reviews are likely to proceed as normal in the immediate future. It is unknown if the decision will be appealed.

 ABC will continue to monitor the situation and provide updates as federal agencies potentially issue new rulemakings and guidance as a result of the decision.

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