FAR Council Proposes New Rule on Project Labor Agreements for Major Construction Projects

Posted by National Alliance for Fair Contracting on

By Alexandra Barbee-Garrett, Peter J. Eyre & Thomas P. Gies on August 23, 2022

On August 18, 2022, the FAR Council issued a proposed amendment to the FAR implementing Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects, which requires the use of project labor agreements (PLAs) on any large-scale federal construction projects valued at or above $35 million unless an exception applies. The Order, and the proposed rule, also give agencies discretion to use PLAs on projects under that $35 million threshold.

In addition to expanding definitions of “construction,” “labor organization,” and “large-scale construction project” to align with E.O. 14063, the proposed rule would revise FAR 22.503 to reflect the change in policy that mandates agencies to require the use of PLAs when awarding large-scale federal construction contracts—including individual orders under Indefinite Delivery, Indefinite Quantity contracts—unless an exception applies. The proposed rule would make the PLA requirement a mandatory flow-down. The proposed rule would also allow agencies to include any additional agency-specific requirements in a PLA through FAR 22.504(b)(6), and would strike the current FAR 22.504(c), which grants agencies discretion to specify PLA terms and conditions.

Both the E.O. and the proposed rule implementing it provide an exception from the PLA requirements. The proposed rule would allow the senior procurement executive of an agency to grant a written exception to the PLA requirement in each of the following circumstances, as provided in the E.O.:

1. Requiring a PLA would not achieve economy and efficiency in Federal procurement, as described in 22.504(d);

2. Requiring a PLA would substantially reduce the number of potential bidders so as to frustrate full and open competition, i.e., where adequate competition at a fair and reasonable price could not be achieved; or

3. Requiring a PLA would be inconsistent with statutes, regulations, other E.O.s., or Presidential Memoranda.

This change in policy will become effective with the publication of the Final Rule, following a 60-day public comment period.

We will continue to monitor developments concerning this initiative.

(See Article)

1200px-DOL_WHD_logo.svg

US Department of Labor Obtains Court Order Preventing Federal Contractor from Retaliating Against, Intimidating Workers on Maryland Projects

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: August 23, 2022
Release Number: 22-1722-PHI

JAG Contractors Inc. attempted to obstruct federal wage investigation

ALEXANDRIA, VA – The U.S. Department of Labor obtained a temporary restraining order and preliminary injunction to prohibit a federal contractor and its owners from retaliating against former and current employees who cooperate with an investigation by the department’s Wage and Hour Division.

The division’s probe of the pay practices of JAG Contractors Inc. in Alexandria, and owner Jose Guzman began in February 2022. The company was contracted to build two federally funded projects in Maryland: the Frederick National Laboratory for Cancer Research at Fort Detrick in Frederick, and the Centers for Medicare and Medicaid Services site in Windsor Mill.

Investigators determined the company and its owners failed to pay workers on the projects all wages as required for all hours worked in violation of the Davis-Bacon Act and the Fair Labor Standards Act. They also learned that JAG either terminated or reassigned employees who complained to the employer’s management about their illegal pay practices or who cooperated with the investigation, from working on the company’s federal projects.

In addition, investigators discovered JAG attempted to obstruct the investigation by falsifying documents, making intimidating statements about workers’ immigration status, and directing employees not to report to work on the day investigators interviewed employees.

Filed in the U.S. District Court for the Eastern District of Virginia, the department’s suit against JAG Contractors Inc. and its owner seeks an order that permanently prevents them from violating the FLSA’s anti-retaliation provisions or engaging in other activity protected by the Fair Labor Standards Act.

“Workers have the legal right to question their employer’s pay practices, submit a complaint and to take part in a federal investigation without fear of reprisal,” explained Wage and Hour Division District Director Alfonso J. Gristina in Wilkes-Barre, Pennsylvania. “When there are doubts about an employer’s compliance with federal wage and hour laws, we will intervene to ensure that employers respect their workers and their rights.”

(Read More)

AG Healey Secures Nearly $3 Million in Penalties and Back Wages Within the Construction Industry in Fiscal Year 2022

Posted by National Alliance for Fair Contracting on

FOR IMMEDIATE RELEASE: 8/22/2022
Office of Attorney General Maura Healey
The Attorney General’s Fair Labor Division

AG’s Fair Labor Division Cited 100 Construction Companies for Violating State Labor Laws, Securing Restitution for More Than 850 Workers

BOSTON — As part of an ongoing initiative to combat wage theft in the construction industry, Attorney General Maura Healey announced today that her office issued 216 citations against 100 construction companies for violating the state’s wage and hour and prevailing wage laws over fiscal year 2022. As a result of these enforcement actions, more than 853 workers will receive more than $1.7 million in back pay and the companies will pay over $1.1 million in fines.

“Our Fair Labor Division works hard to advocate for construction workers across Massachusetts who are often vulnerable to wage theft and other forms of exploitation on the job,” said AG Healey. “Through continued enforcement, outreach, and education, we are committed to ensuring a fair working environment in the construction industry and a level playing field for responsible employers.”

The violations in these cases, handled by the AG’s Fair Labor Division, include the failure to pay wages in a timely manner, to pay overtime, and to furnish records for inspection, as well as retaliation. For work performed on public construction projects, violations include failure to pay the prevailing wage, to submit true and accurate certified payroll records, and to register and pay apprentices appropriately.

Some of the 2022 enforcement actions include citations against the following construction companies:

  • Rochester Bituminous Products, Inc., and its owners, President, Thomas Russo, Manager, Albert Todesca, and Treasurer, Michael P. Todesca, were issued 25 citations totaling more than $1.2 million in restitution and penalties for prevailing wage violations and failing to submit certified payroll records. The violations occurred on various public projects, including projects for the City of Boston, Town of Mattapoisett, Boston Water & Sewer Commission, as well as Abington, Bridgewater, Canton, Plymouth, Sharon, and Weymouth.
  • Superior Carpentry, Inc., and its President, Fernando Barroso, and Vice President, Felipe Drumond, were issued five citations for over $540,000 in restitution and penalties for failure to pay prevailing wages and for submittal of false payroll records to awarding authorities on public projects at the Middleborough and Westport police stations.
  • Railworks Track Systems, Inc., will pay more than $220,000 in restitution and penalties for failing to pay the proper overtime rate to workers, failing to properly account for different hourly rates of pay earned by employees during the same work week, and failing to submit true and accurate payroll records for work performed on public works projects in Hyannis, Falmouth. Framingham, Great Barrington, Lee, Lenox, Pittsfield, Sheffield, and Stockbridge.
  • Gonza Construction Inc. was issued five citations totaling $143,000 in restitution and penalties for prevailing wage, record-keeping, earned sick time, and paystub violations on a public project in Stoughton.

(Read More)

unnamed

Offshore Wind and the US Inflation Reduction Act

Posted by National Alliance for Fair Contracting on

Mayer Brown | 8/19/22
Authors – Amanda L. Rosenberg, Lauren A. Bachtel and Daniel T. Kiely

The Inflation Reduction Act of 2022 (IRA), which was signed into law by President Joe Biden on August 16, 2022, has the potential to shape offshore wind development for the foreseeable future. Among other things, the IRA modifies the investment tax credit requirements for offshore wind projects, ties offshore wind leasing to offshore oil and gas leasing while also opening new areas for potential offshore wind development, and appropriates additional funds for the planning and development of interregional electricity transmission and transmission of electricity generated by offshore wind.

Tax Credits

There are now more onerous requirements for offshore wind projects to qualify for investment tax credits (ITCs) at the full rate but a renewed opportunity to claim production tax credits (PTCs).

Previously, offshore wind projects under construction by the end of 2025 qualified for a 30% ITC but were ineligible for PTCs at the full rate unless they were under construction by the end of 2016. Wind projects under construction between 2017 and 2021 qualified for PTCs at a reduced rate. Most offshore wind projects are expected to claim the ITC given the high capital costs of constructing such projects.

Now, offshore wind projects under construction by the end of 2024 are eligible for a reduced base credit (6% ITC or 0.3 cent PTCs, adjusted for inflation) that is subject to increase if certain criteria are met. In order to be eligible for the full ITC or PTCs, offshore wind projects must meet certain prevailing wage and apprenticeship requirements or else be under construction no later than 60 days after the Treasury secretary issues guidance on the prevailing wage and apprenticeship requirements.

Prevailing wage requirement: A taxpayer, as well as its contractors and subcontractors, must pay prevailing wages to laborers and mechanics in the construction of the facility and, during the first five (in the case of ITC projects) or 10 (in the case of PTC projects) years of operation after the facility is placed in service, the alteration and repair of the facility. Prevailing wages are determined by the secretary of Labor. Taxpayers have the ability to correct a shortfall in wages by paying to the laborer or mechanic the difference between the prevailing wage amount and what the laborer or mechanic was actually paid plus interest and a penalty to Treasury. The amount owed to the laborer or mechanic for a shortfall is multiplied by three and the penalty is higher, if there was “intentional disregard” of the prevailing wage requirement.

Apprenticeship requirement: A certain percentage of the total labor hours for the construction, alteration or repair work with respect to the facility (including work by contractors or subcontractors) must be performed by qualified apprentices. The percentage is 10% for projects under construction before 2023, 12.5% for projects under construction in 2023, and 15% for projects under construction after 2023. A “qualified apprentice” is an apprentice employed by the taxpayer or its contractors or subcontractors and who participates in certain registered apprenticeship programs. Additionally, any taxpayer, contractor or subcontractor who employs four or more individuals to perform construction, alteration or repair work with respect to the facility must employ at least one qualified apprentice. There is an exception to the apprenticeship requirement if (i) the taxpayer requested qualified apprentices from a program and either the request was denied or there was no response from the apprenticeship program within five days or (ii) the taxpayer otherwise pays a penalty to Treasury for failing to meet the labor hours and minimum participation requirements. The penalty is multiplied by 10 if the taxpayer intentionally disregarded the apprenticeship requirement.

Practical considerations: For wind projects, the determination of whether the prevailing wage requirement and apprenticeship requirements are satisfied is made on a “qualified facility” basis. The IRS generally considers each turbine, pad and tower a separate facility. It is unclear how the requirements will apply to the balance of the wind project. Another consideration is whether the start of construction rules that have been used for qualification purposes over the last nine years, including the “single project” rule, will apply for purposes of determining whether a project was under construction in time to avoid having to meet the prevailing wage and apprenticeship requirements. Recordkeeping will be critical in deals claiming the full tax credit rates. Investors are likely to ask sponsors to make representations that the prevailing wage and apprenticeship requirements are met, if applicable. Beginning of construction analysis will be important for projects looking to avoid having to meet the requirements. Sponsors will need to coordinate with contractors to ensure the requirements are met and may attempt to push these risks on to contractors. It is worth noting that the start of construction deadline for claiming an ITC for an offshore wind project was pulled forward by one year, but projects under construction in 2025 or later may be eligible for a technology-neutral ITC or PTCs as discussed below.

(Read More)

FACT SHEET: The Inflation Reduction Act Supports Workers and Families

Posted by National Alliance for Fair Contracting on

The White House Briefing Room
8-19-22

By signing the Inflation Reduction Act, President Biden is delivering on his promise to build an economy that works for working families. President Biden is the most pro-worker, pro-union President in history, and the Inflation Reduction Act builds on that legacy. President Biden and Congressional Democrats beat back special interests to pass this historic law that lowers costs for families, creates good-paying jobs for workers, and grows the economy from the bottom up and the middle out.

The Inflation Reduction Act lowers prescription drug costs, health care costs, and energy costs. It’s the most aggressive action on tackling the climate crisis in American history, which will lift up American workers and create good-paying, union jobs across the country. It’ll lower the deficit and ask the ultra-wealthy and corporations to pay their fair share. And no one making under $400,000 per year will pay a penny more in taxes.

CREATE CLEAN ENERGY JOBS

The Inflation Reduction Act creates good-paying union jobs that will help reduce emissions across every sector of our economy. As President Biden promised when running for president, the law includes some of the strongest labor protections and incentives ever attached to clean energy tax credit programs. It will:

  • Incentivize prevailing wages. The expanded tax credits for energy efficient commercial buildings, new energy efficient homes, and electric vehicle (EV) charging infrastructure will include bonus credits for businesses that pay prevailing wages and hire registered apprentices, ensuring local wages are not undercut by low-road contractors.
  • Stop companies from ripping off workers. It will penalize companies that promise to pay prevailing wages but don’t follow through, and workers who are owed prevailing wages will receive the difference, plus interest.
  • Make it in America. For the first time ever, the Inflation Reduction Act establishes Make it in America provisions for the use of American-made equipment for clean energy production. The law provides expanded clean energy tax credits for wind, solar, nuclear, clean hydrogen, clean fuels, and carbon capture, including bonus credits for businesses that pay workers a prevailing wage and use registered apprenticeship programs.

…

REVITALIZE AMERICAN MANFACUTURING

President Biden made a promise to re-energize American manufacturing, and he kept his promise. The President already has the strongest record of growing manufacturing jobs in modern history, and this law invests in American workers and industry. The Inflation Reduction Act will:

  • Build American clean energy supply chains, by incentivizing domestic production in clean energy technologies like solar, wind, carbon capture, and clean hydrogen.
  • Support American workers with targeted tax incentives aimed at manufacturing U.S.-sourced products such as batteries, solar, and offshore wind components, and technologies for carbon capture systems.
  • Strengthen America’s manufacturing base. The Inflation Reduction promotes domestic sourcing and American jobs. For example, clean energy tax credits are increased if the amount of American steel used in wind projects meets the domestic content threshold, and bonus credits apply to employers who use of prevailing wages and apprenticeships, ensuring that federal tax policy supports good-paying, high-skilled jobs.
  • Create good-paying union jobs in energy communities. Clean energy tax credits will be increased by 10% if the clean energy projects are established in communities that have previously relied upon the extraction, processing, transport, or storage of coal, oil, or natural gas as a significant source of employment, creating jobs and economic development in the communities that have powered America for generations.

(Read More)

L&I Partners With U.S. Department Of Labor To Coordinate Labor Law Enforcement In Pennsylvania

Posted by National Alliance for Fair Contracting on

Pennsylvania Pressroom
8/19/22

​Harrisburg, PA – Department of Labor & Industry (L&I) Secretary Jennifer Berrier today announced a Memorandum of Understanding (MOU) between L&I and the U.S. Department of Labor’s Wage and Hour Division (DOL) to share information regarding violations of labor and workers’ compensation laws that fall under the investigation purview of both departments.

“Our partnership with the federal Department of Labor extends greater protections for Pennsylvania’s workers and ensures more robust compliance assistance for employers,” Berrier said. “Sharing information and resources between federal and state agencies charged with enforcing similar laws allows us to better achieve our joint mission of protecting Pennsylvania workers effectively and efficiently.”

Created due to the overlap in some of the services that the DOL administers, and laws enforced by L&I’s Bureau of Labor Law Compliance and Bureau of Workers’ Compensation, the MOU establishes a five-year agreement, allowing DOL and L&I to partner where applicable. The agreement allows the departments to, among other things, perform joint investigations throughout the commonwealth, share training materials, assist employers and employees with compliance assistance information, coordinate enforcement activities, and suggest referrals for violations.

“We look forward to working with Pennsylvania Labor & Industry as our partner. Our combined efforts will enhance our own resources and ensure increased compliance by employers throughout the commonwealth,” said DOL’s Northeast Wage and Hour Division Regional Administrator Mark Watson. “Our agencies share a common purpose of ensuring the proper working conditions for workers in Pennsylvania. Our working together and sharing resources to achieve efficiency in that common purpose makes sense.”

The Department of Labor & Industry enforces 14 labor laws, including the Construction Workplace Misclassification Act (Act 72), Prevailing Wage Act, Child Labor Act, Minimum Wage Act, Wage Payment Collection Law, Prohibition of Excessive Overtime in Health Care Act (Act 102), Medical Pay Law, Apprenticeship and Training Act, Equal Pay Law, Industrial Homework Law, Personnel File Inspection Act, Seasonal Farm Labor Act, Construction Industry Employee Verification Act, and Workers’ Compensation Act, and the regulations expressed for each.

(See Article)

unnamed

Wage thieves will soon face criminal prosecution in Multnomah County

Posted by National Alliance for Fair Contracting on

Northwest Labor Press – By Colin Staub
Aug 17, 2022

Employers who intentionally withhold wages totaling more than $10,000 could be taken to criminal court under an agreement in development between state labor regulators and the Multnomah County District Attorney’s office.

Oregon’s Bureau of Labor & Industries (BOLI) signed a memorandum of understanding with District Attorney Mike Schmidt on March 7. It’s not binding and isn’t legally enforceable, but it indicates both parties intend to enhance enforcement of wage and hour laws.

No cases have been referred for prosecution yet. But BOLI Wage & Hour Administrator Laura van Enckevort said she hopes to have at least a few cases identified for referral to the DA’s office in September, and definitely before the end of the year.

Employers could face felony charges

Schmidt says he was interested in tackling wage theft even before voters elected him in May 2020. He draws a connection between wage theft and public safety.

“When workers aren’t paid and they can’t bring home a paycheck, then that hits food on the table, the electric bill, the school supplies, that hits everything, and that can destabilize entire communities,” Schmidt said. “When I think about public safety, the thing that I think makes us the most safe is when communities are healthy and thriving. If you look out across Multnomah County, the places with the greatest economic disparity are the places we see the most criminal challenges.”

Schmidt says he’s heard several first-hand accounts from victims of wage theft since entering office. In one case, a man came to Schmidt to advocate on behalf of a group of Portland laborers who weren’t being paid by a contractor.

“They got to the first round of checks, and they bounced,” Schmidt said. “The second round of checks, and they bounced. They got to the third round, and he promised a bag full of cash. And then he showed up with an empty bag. He kept stringing them along until they finally walked off the job.”

(Read More)

US Department of Labor Offers Prevailing Wage Compliance Seminars for Federal Contractors, Contracting Agencies, Unions, Workers

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: August 15, 2022
Release Number: 22-1657-NA

WASHINGTON – The U.S. Department of Labor is offering online compliance seminars for contracting agencies, contractors, unions, workers and other stakeholders on the requirements governing payment of prevailing wages on federally funded construction and service contracts.

Presented by the department’s Wage and Hour Division, the seminars are part of the division’s ongoing effort to increase awareness and improve compliance with federal prevailing wage requirements.

The seminars will include video training on many Davis-Bacon and Related Acts and McNamara-O’Hara Service Contract Act topics that participants can view on demand. In addition to recorded videos, the division will offers live, online question and answer sessions on DBA and SCA compliance from 1:30 to 3:30 p.m. EDT.

The live Davis-Bacon Act compliance session is scheduled for Sept. 13 and the live session on Service Contract Act compliance is scheduled for Sept. 14.

“With the Biden-Harris administration’s unprecedented investments in the nation’s infrastructure, the Wage and Hour Division wants to ensure that employers understand the importance of compliance with the Davis-Bacon and Service Contract acts and other laws we enforce,” said Principal Deputy Wage and Hour Administrator Jessica Looman. “Our efforts are intended to help create good jobs and support responsible employers by providing useful opportunities for contractors, workers and contracting agencies to understand the laws that govern wages and benefits on federal contracts better.”

While seminar attendance is free, registration is required. Register to attend the Prevailing Wage seminar.

Additional information – including links to video trainings and dates for upcoming Q&A sessions, will be provided to registrants soon.

(See Article)

BY THE NUMBERS: The Inflation Reduction Act

Posted by National Alliance for Fair Contracting on

The White House Briefing Room
August 15, 2022

The Inflation Reduction Act will lower costs for families, combat the climate crisis, reduce the deficit, and finally ask the largest corporations to pay their fair share. President Biden and Congressional Democrats have worked together to deliver a historic legislative achievement that defeats special interests, delivers for American families, and grows the economy from the bottom up and middle out.

Here’s how the Inflation Reduction Act impacts Americans by the numbers:

…

CLEAN ENERGY

Lowering Energy Costs

  • Families that take advantage of clean energy and electric vehicle tax credits will save more than $1,000 per year.
  • $14,000 in direct consumer rebates for families to buy heat pumps or other energy efficient home appliances, saving families at least $350 per year.
  • 7.5 million more families will be able install solar on their roofs with a 30% tax credit, saving families $9,000 over the life of the system or at least $300 per year.
  • Up to $7,500 in tax credits for new electric vehicles and $4,000 for used electric vehicles, helping families save $950 per year.
    Putting America on track to meet President Biden’s climate goals, which will save every family an average of $500 per year on their energy costs.

Building a Clean Energy Economy

  • Power homes, businesses, and communities with much more clean energy by 2030, including:
    • 950 million solar panels
    • 120,000 wind turbines
    • 2,300 grid-scale battery plants
  • Advance cost-saving clean energy projects at rural electric cooperatives serving 42 million people.
  • Strengthen climate resilience and protect nearly 2 million acres of national forests.
  • Creating millions of good-paying jobs making clean energy in America.

Reducing Harmful Pollution

  • Reduce greenhouse gas emissions by about 1 gigaton in 2030, or a billion metric tons – 10 times more climate impact than any other single piece of legislation ever enacted.
  • Deploy clean energy and reduce particle pollution from fossil fuels to avoid up to 3,900 premature deaths and up to 100,000 asthma attacks annually by 2030.

(Read More)

unnamed

Minneapolis Construction Workers Fight Chronic Wage Theft

Posted by National Alliance for Fair Contracting on

BY CALEB BRENNAN | AUGUST 15, 2022

The Midwest building industry is notorious for cheating paychecks.

… Bravo, the executive director of the West Side Community Organization, alongside a coalition of workers’ rights advocates, union organizers, and general laborers, was there to protest poor working conditions within the construction industry. Their caravan would soon make its way into the heart of downtown Minneapolis to protest other build sites where blocky, five-on-one condominiums were under construction.

Bravo accused the firm, alongside a slew of other Minnesota real estate companies, of ignoring chronic concerns over safety, sexual harassment—and, most urgently, rampant wage theft.

“That was five decades ago,” Bravo continued. “And we have families today still facing wage theft while the construction industry is booming with millionaires and multimillionaires—all at the expense of exploiting the families that are working for them.”

Bravo was not exaggerating. The construction industry in the U.S. runs on wage theft. One study found that in Illinois, Wisconsin, and Minnesota, almost 1 out of every 5 workers suffer from payroll fraud. Another study focused specifically on Minnesota construction found a rate of 23 percent.

“One study found that in Illinois, Wisconsin, and Minnesota, almost 1 out of every 5 workers suffer from payroll fraud.

Minimum and overtime wage violations, specious deductions from paychecks, and misclassifying workers are all common tactics that Rust Belt construction firms and their subcontractors use to cut back on labor costs. Despite the brief impact of the COVID-19 lockdown, residential construction revenue in the U.S. is continuing on an upward trend—the size of the North American construction sector is set to reach $2.4 trillion by 2030.

In June of this year alone, domestic construction spending totaled $1.76 trillion.

This thievery, according to the Midwest Economic Policy Institute, costs taxpayers in these states $362 million each year. Similar levels are found on a national level, where everywhere from San Diego to Washington, D.C., sees a persistent flow of complaints and dollars extracted from workers.

The industry’s labor force is chronically unorganized, undocumented, and obstructed from legal recourse. As such, subcontractors can exploit atomized workers while their hiring firms can claim they had no knowledge of the conduct, leaving their precarious workforce economically and legally stranded.

Without political power or judicial leverage, atomized construction workers often have no means for resisting this subtle form of robbery.

That’s how Daniel Sanchez felt when he realized he had had over $100,000 worth of wages stolen from him over the course of two years. An immigrant laborer from Minnesota who has worked for both large national property development firms like R.J Ryan Construction and smaller, local ventures like Doran Companies, Sanchez has spent the past ten years cleaning and maintaining construction sites.

(Read More)