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ABC Newsline
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 decision, the 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:
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 Roundup, Regulatory 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.
On Nov. 13, the National Labor Relations Board ruled that an employer violates the National Labor Relations Act by requiring employees to attend mandatory “captive audience” meetings, in which the employer expresses its views on unionization and its potential impact. The decision undoes 75 years of precedent, violating employer free speech rights and depriving workers of vital information.
Immediately following the NLRB decision, Kristen Swearingen, ABC vice president, legislation & political affairs, and chair of the Coalition for a Democratic Workplace, issued the following statement:
“In the last week, NLRB Chair Lauren McFerran has issued two decisions aimed at silencing debate on the merits of a particular union or unions generally. McFerran’s actions are part of her and other Democratic Board members’ ongoing effort to cancel employer speech. The Board decisions will make it harder for employees to hear the pros and cons of unionization before casting their secret ballot vote for or against union representation. The Supreme Court, Congress, and the Board itself have all recognized and protected employers’ free speech rights and their ability to discuss unionization with their employees. Nonetheless, the Board is taking it upon itself to muzzle employers, leaving workers unable to obtain a full picture of what unionization could mean for them. As dissenting member Kaplan explained, this rule will crush the ‘uninhibited, robust, and wide-open debate in labor disputes’ that Congress so clearly intended and the courts have promoted.
“Moreover, the Board chose to abandon this precedent, which has stood for more than 75 years, without first seeking input from the public. The impact of this decision will be immense, and the Board’s failure to obtain public comment is shocking and inexcusable.”
The NLRB’s news release discussed the Board’s reasoning for why captive audience meetings interfere with employees’ rights under the NLRA:
“First, such meetings interfere with an employee’s right under Section 7 of the Act to freely decide whether, when, and how to participate in a debate concerning union representation, or refrain from doing so. Second, captive audience meetings provide a mechanism for an employer to observe and surveil employees as it addresses the exercise of employees’ Section 7 rights. Finally, an employer’s ability to compel attendance at such meetings on pain of discipline or discharge lends a coercive character to the message regarding unionization that employees are forced to receive. The employer’s ability to require attendance at such meetings demonstrates the employer’s economic power over its employees and reasonably tends to inhibit them from acting freely in exercising their rights.”
The Board made clear that this change in the governing standard will be applied prospectively only.
This decision will chill employer speech on unionization, leaving workers without a full understanding of how unionization could impact them. While the NLRB under President Trump may work to undo this decision, it can only do so when it obtains control over the Board and its agenda. The Board currently has a 3-1 Democratic majority. President Biden is attempting to extend NLRB Chair McFerran’s tenure on the Board by nominating her for another five-year term before her current term expires in December 2024. Disappointingly, Democratic senators on the U.S. Senate Health, Education, Labor and Pensions Committee forced McFerran’s nomination through the committee on Aug. 1 without a hearing or the support of any Republican senators on the committee. If McFerran is successfully confirmed by the Senate, there will be a Democratic majority on the Board through August 2026. The Senate may vote on McFerran’s renomination before the 118th Congress ends in January 2025, which ABC will continue to oppose.
On Nov. 15, ABC applauded the decision of the U.S. District Court for the Eastern District of Texas, which set aside 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-Harris 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 on Jan. 1 it was scheduled to increase to $58,656. In addition, the threshold for highly compensated employees increased from the current level of $107,432 to $132,964 on July 1, 2024, and then to $151,164 on Jan. 1, 2025. In addition, salary thresholds would have been updated every three years starting on July 1, 2027.
ABC immediately issued a news release applauding the decision:
“This decision is the correct one, and an important win for ABC members and the rest of the regulated community,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “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.
“Some ABC members employ workers who would have lost their exempt status as of Jan. 1 because of the 2024 overtime rule’s scheduled increase,” said Brubeck. “This would have disrupted the construction industry, specifically harming small businesses, restricting employee workplace flexibility in setting schedules and hours, and hurting career advancement opportunities.
“The 2024 rule’s radical increase in the salary threshold for exemption would have also further complicated the current economic outlook,” said Brubeck. “Multiple industries, like construction, are grappling with uncertain economic conditions such as high interest rates, supply chain disruptions, materials price inflation and workforce shortages, all of which push operational costs ever higher. Specifically, ABC estimates that the construction industry must hire more than half a million additional workers in 2024 to meet demand. The rule’s triennial automatic indexing provision would have exacerbated its harmful impact on businesses and added to rampant inflation that is already harming the economy as a whole.”
ABC’s general counsel, Littler Mendelson, published an article discussing the court decision and what comes next:
“It is clear now that the Jan. 1, 2025 increase will not go into effect as scheduled, and as a matter of law, the July 1, 2024 increase is nullified. Employers that previously adjusted the salaries or exemption status of employees who earned less than the salary threshold set by the now-invalidated July 1 increase are advised to consult with counsel before considering whether to rescind those changes on a going-forward basis. Employers should also remain aware that some states have salary thresholds that exceed the FLSA threshold, including Alaska, California, Colorado, Maine, New York, and Washington.
“The DOL may seek to appeal the lower court’s decision to the Fifth Circuit Court of Appeals. That said, with the upcoming change in presidential administration, we predict that under new leadership the DOL would likely abandon any appeal and allow the lower court’s decision to stand. Going forward, it is less clear whether the Trump administration will revisit some or all of the rule, repealing it entirely, or perhaps adopting a different formulation.”
Continue to monitor ABC’s Newsline for future updates.
The U.S. Department of Labor’s Wage and Hour Division recently announced a series of virtual compliance seminars to provide information on prevailing wage requirements for federally funded construction and service contracts. Each seminar will offer separate sessions focused on Davis-Bacon Act and Service Contract Act compliance.
Seminars will take place on the following dates in 2025:
Additionally, the final seminar for 2024 will take place Nov. 13-14.
Registration via the DOL’s website is required to attend the seminars.
Over the past two years, ABC’s Free Enterprise Alliance has spent more than $5 million dollars to fund issue advocacy efforts and, separately, get-out-the-vote campaigns in key states.
FEA educates elected officials and the public about the importance of fair and open competition through digital ads, videos, text messages and more.
In addition, ABC PAC has invested nearly $2 million in direct support of federal candidates and campaign committees who champion free enterprise and fair and open competition. ABC has increased its spending this cycle, continuing to be one of the nation’s most politically engaged trade associations.
FEA has widened its issue advocacy campaign outreach, with ads playing in over 34 key states and congressional districts throughout the country to educate voters about ABC’s top issues. Some top areas of focus include Arizona, Florida, Maryland, Montana, North Carolina’s 1st Congressional District, Ohio’s 13th Congressional District, Nebraska and Pennsylvania. Additionally, FEA delivered a seven-figure spend to educate voters on current labor laws imposed by the Biden-Harris administration. FEA’s important issue advocacy messaging was delivered to the public via digital advertising and text messages.
View ads FEA has released ads in both English and Spanish, which are live in the following states and congressional districts:
Alabama—02
Alaska-At-Large
Arizona
California—09
Iowa—03
Michigan
Nebraska
Nevada
North Carolina—01
Ohio—13
Pennsylvania
Texas
Fighting for ABC’s legislative principles, such as free enterprise and fair and open competition, has always been and will continue to be the main goal of FEA’s issue advocacy effort. Here are some examples:
Fighting Against Vice President Harris’ Restrictive Labor Policies
America Cannot Afford the PRO Act
Creating More Jobs in Arizona
Fiscal Responsibility in Michigan
Separately, ABC PAC has worked to directly support candidates to ensure a merit-shop majority in the U.S. Senate and House of Representatives. ABC has supported hundreds of campaigns, PACs, committees and state parties with its record spend this cycle.
On Wednesday, Nov. 6, the ABC National government affairs team will provide a post-election analysis and discuss key campaign takeaways from the biggest races of the year in its members-only post-election breakdown webinar from 3-4 p.m. ET. Members will have the opportunity to ask questions on races across the country. Register today.