Organization: MCAA

An MCAA-led industry group provided analyses to the Office of Management and Budget (OMB), Office of Information and Regulatory Analysis (OIRA), and the Department of Labor’s (DoL) Wage and Hour Division as part of its efforts to obtain an industry exemption from President Obama’s Executive Order 13706—requiring paid sick leave accrual for those working on federal contracts—for employees covered by a collective bargaining agreement who are working on direct federal construction and federal facility HVAC service contracts.

MCAA representatives Adam Snavely of The Poole & Kent Co. (Baltimore, MD), Chip Mitchell of the Kirlin Group (Rockville, MD), Steve Weissenberger of MCA-Maryland, Bob Battista representing the MCA-MD and MCA Detroit and MCAA General Counsel John McNerney met with OMB/OIRA/DoL officials on February 11 to discuss the rationale for providing a collective bargaining exemption in the upcoming EO 13706 regulatory proposal.

MCAA’s position, also supported by the Construction Employers of America, laid out an analysis of ways to implement EO 13706 that are consistent with federal procurement, labor, and regulatory implementation policies. MCAA’s effort is aimed at gaining a favorable regulatory approach before a proposed regulation is published, rather than waiting for a proposed rule to be issued with less favorable options.

EO 13706 proposed regulations may be issued within the next month. MCAA’s initial letter to OMB and an outline of MCAA’s February 11 oral presentation are available by clicking on the links below.

Written Comments

Oral Presentation Outline

Labor Department Wage and Hour Administrator Dr. David Weil released a new Administrator’s Interpretation 2016-1: Joint Employer under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).

This interpretive guidance, with less significance than a regulation, has primary significance to the construction industry as a way to stem rampant misclassification of employees as independent contractors, an unfair competitive advantage that some non-signatory firms have over signatory employers. This guidance also affects only wage-and-hour compliance and is separate from the controversy surrounding the new National Labor Relations Board’s (NLRB) joint employer ruling that is roiling unorganized firms in the context of union organizing efforts. In either case, the NLRB or Labor Department’s single employer policies have very limited application to union-signatory Section 8(f) contractors or prime contractors in the ordinary course of construction industry construction prime contract and subcontract commercial contract performance. Following is an example from the DoL Guidance derived from the air conditioning service industry:

A mechanic is employed by Airy AC & Heating Company. The Company has a short-term contract to test and, if necessary, replace the HVAC systems at Condor Condos. The Company hired and pays the mechanic and directs the work, including setting the mechanic’s hours and timeline for completion of the project. For the duration of the project, the mechanic works at the Condos and checks in with the property manager there every morning, but the Company supervises his work. The Company provides the mechanic’s benefits, including workers’ compensation insurance. The Company also provides the mechanic with all the tools and materials needed to complete the project. The mechanic brings this equipment to the project site. These facts are not indicative of joint employment of the mechanic by the Condos.

Click on the link below for the entire DoL release. Within that material is an example of a DoL enforcement action against a drywall firm for misclassification in that industry. Some comments indicate that construction prime and subcontract commercial contracts can be revised to address or defend against adverse application of these rules in the commercial contracting business. An initial analysis of those comments shows that regulators (see example above) are focused on the workforce realities of worker conduct and supervision, and boilerplate contract or subcontract terms will not be an effective defense against an adverse determination finding on a factual application of the single employer rules in either a union election process or a wage-and-hour misclassification context.

DoL Release

MCAA filed comments on the Administration’s Paid Sick Leave Executive Order (EO) 13706, which also is under an expedited path for final publication for mid-2016 and implementation in 2017. The EO would require direct federal prime contractors and subcontractors to provide paid sick leave (one hour of paid leave for every 30 hours worked) on a covered federal contract or subcontract of $2,000 or more. The minimum annual amount of leave is 56 hours, which can be carried over on an annual basis and reinstated after breaks in service of less than a year.

MCAA filed comments on its own behalf and on behalf of the Construction Employers of America after the draft proposed regulations were sent to the Office of Management and Budget and Office of Information and Regulatory Analysis (OIRA) for pre-clearance before the expected early release of a regulatory proposal in February 2016.

MCAA’s comments raised a number of questions about the statutory authority for the EO and the specific implementation issues under the federal Acquisition Regulations. MCAA also requested an in-person discussion on the comments at OIRA in the review process. OIRA is expected to grant that request and provide a hearing with MCAA and coalition representatives in late January. MCAA is assembling a team of select federal contractors, prime and subcontractors that perform covered federal new construction and service contracts to discuss the EO issues with OIRA in late January.

Read the Comments

As the last year of the Obama Administration begins, regulatory activity is intensifying to get long-delayed initiatives off the regulatory docket and into regulations before the end of the legislative year to avoid Congressional suspension and review of midnight regulations. One issue concerns new and much more comprehensive affirmative action and non-discrimination regulations proposed for registered apprenticeship programs.

MCAA filed comments in late December seeking an extension of the comment period, slated to close January 5, until March 6, 2016 or later. The delay would allow more comprehensive and constructive analyses of sweeping new rules that set goals for disabled apprenticeship applicants and written affirmative action plans, comprised of specific labor market workforce availability analyses for minority and female candidates, and utilization analyses and specific goals and timetables for affirmative action goal compliance.

The proposed regulations also add age and gender identity/sexual preference as categories for non-discrimination safeguards in program administration. Penalties for non-compliance range up to program de-registration.

MCAA is working with the UA and the International Training Fund and an outside consultant on program compliance guidance. The Department of Labor granted the extension, with the comment period now due to expire on January 20, 2016.