Collective bargaining settlements reported to the Construction Labor Research Council (CLRC) between January and June of this year resulted in an average first-year wage-and-benefits increase of $0.98 or 1.9 percent.  This average is up moderately from the $0.55 or 1.1 percent average reported at the same time last year but still significantly lower than the $1.49 or 3.1 percent average reported two years ago.  As reported in CLRC’s latest Wage and Benefit Settlements Report, nine percent of year-to-date settlements included no increase at all in first-year wages and benefits, as compared to nearly a quarter of settlements at this time last year.

The Financial Accounting Standards Board (FASB or Board) at a June 29 meeting held further redeliberations of its proposal to update accounting standards related to disclosure of an employer’s participation in a multi-employer benefit plan.  The discussions are largely continuing in a direction favorable to AGC and to the Construction Industry FASB Coalition (CIFC), of which AGC is a member.  The original proposal – which was over broad and potentially very damaging to AGC members that contribute to multi-employer plans – has now been significantly pared back to a compromise that should achieve FASB's goal of greater transparency but without the severe consequences for construction firms.

On July 11, 2011, AGC submitted comments on the April 26, 2011, Office of Federal Contract Compliance Program (OFCCP) notice of proposed rulemaking, which would implement significant revisions of the regulations governing affirmative action requirements for direct federal contractors and subcontractors with respect to protected veterans. AGC fully supports OFCCP’s stated overall goal of increasing employment opportunities for covered veterans; however, AGC does not support the burdensome requirements of this proposed rule, nor does AGC believe more covered veterans will be hired as a result of the proposed requirements.

In recent weeks, Immigration and Customs Enforcement (ICE), a division within the U.S. Department of Homeland Security, issued 1,000 Notices of Inspection (NOI) beginning its second round of immigration audits this year. 

AGC recently met with the U.S. Department of Labor’s Wage and Hour Division (WHD) acting administrator, Nancy Leppink, who is responsible for enforcing such laws as the Fair Labor Standards Act, the Family and Medical Leave Act, the Davis-Bacon Act (DBA), and other laws that govern how wages are paid to workers.  During the meeting, AGC explained that its members want to be in compliance with the law and asked Ms. Leppink for additional guidance and in-depth training for the often complicated and confusing wage laws, including the DBA.  As a result, the agency informed AGC, in a follow-up letter, of a new resource to assist contractors:  a video of WHD’s Prevailing Wage Conference.

On April 26, 2011, the Office of Federal Contract Compliance Programs (OFCCP) proposed significant revisions of the regulations governing affirmative action requirements for direct federal contractors and subcontractors with respect to protected veterans.  AGC requested an extension of the 60-day comment period.  While OFCCP did not fully grant AGC’s request, OFCCP did grant a 14-day extension.The proposed rule would impact all stages of federal contracting and subcontracting for construction employers.  Specifically, the proposed rule would require covered employers to:calculate and establish numerical hiring benchmarks using data contractors would have to research for the calculation;extend an offer to self-identify as a protected veteran pre-hire in addition to the current post-hire requirements;track and maintain several new data points on veteran referrals, applicants, and hires, and maintain the data for five years;sign written linkage agreements with a minimum of three veteran sources, per establishment and perform a self-critical analysis of the effectives of each;list vacant positions with employment services in the manner and format they require;create a file for every known veteran applicant and employee, to include every opportunity for which the veteran was considered (vacancy, training and promotion), and a statement outlining the reason for rejection if the veteran was not selected;conduct annual meeting and training programs for all employees and management; andperform and document annual reviews of job descriptions listing the physical and mental job qualifications for all job openings and provide an explanation regarding why each requirement is related to the job.To read more about the proposed rule, click here.Given the importance of the proposal, AGC hosted a conference call with its HR Forum Federal Subforum to discuss the implications of the proposed rule.  As a result, AGC felt it was necessary to submit a letter to OFCCP requesting an additional 60 days to more thoroughly review and comment on the newly proposed requirements – particularly the reporting and recordkeeping requirements.While AGC is continuing to work on the comments that will be submitted on behalf of the industry, members are also encouraged to participate in the regulatory process by submitting comments on behalf of each company.  AGC members can ask OFCCP to exempt the construction industry from the requirements of this proposed rule or, at minimum, simplify the requirements by sending a letter to OFCCP through the AGC Legislative Action Center (LAC).  Members can submit a copy of the pre-composed letter or make changes to the letter identifying the specific impact this rule would have on the company.  Letters will be automatically sent to OFCCP through the LAC before the new submission deadline of July 11, 2011.

It's no secret that enforcement has increased and many companies have faced recent audits, resulting in fines and penalties for the first time, but for most, debarment has only been a mere threat for non-compliance until now.  Previously, Department of Labor (DOL) officials explained that debarment would be more widely sought as punishment for federal contractors who fail to comply with the law because in their opinion, contractors do not take fines seriously and consider fines as only a cost of doing business.

On Tuesday, June 14, the House Subcommittee on Health, Employment, Labor and Pensions held a hearing to review the state of private pension plans and the challenges facing plan sponsors, workers and retirees.   The challenges facing both single and multiemployer pension programs was not directly discussed in the hearing, however, this action indicates that Congress does realize that there are still challenges facing this retirement vehicle. 

On June 3, AGC’s general counsel testified in Congress in support of H.R. 735, the Government Neutrality in Contracting Act.

The Financial Accounting Standards Board (FASB) appears to be heading in the right direction in its reconsideration of its proposal to update accounting standards concerning disclosure of an employer’s participation in a multiemployer plan.