TAUC Legislative and Regulatory Update, April 2016
It’s been a busy month on Capitol Hill. From pension reform to environmental regulations, here’s an exclusive update from TAUC on the issues of vital interest to contractors and the union construction and maintenance industry as a whole.
Multiemployer Pension Reform
Two studies demonstrating the magnitude of the challenges facing multiemployer pension plans (MEPP) have recently been released. In the first, the Society of Actuaries (SOA) found that although employer contributions are increasing, the unfunded liabilities of the MEPP system are growing. This is because the contributions of approximately 75% of plans were not high enough to cover funding gaps or to stop their unfunded liabilities from increasing. In 2013, total unfunded liabilities were at least $115 billion. Additionally, the contributions received by MEPPs were lower than predicted due to a 2% drop in active participants per year. The SOA report indicated that 2014 MEPP funding levels show an upward trend in future funding and contribution levels. SOA Report.
The Pension Benefits Guarantee Corporation (PBGC) also issued a study reporting on the revenues necessary to ensure that the PBGC’s multiemployer fund can protect plan participants. The study found that multiemployer insurance programs’ resources are significantly below the amount necessary to cover guaranteed benefits. Despite the premium increase included in MPRA, the multiemployer program is expected to run out of resources as early as 2025. The Administration’s budget called for further increases in PBGC premiums.
The U.S. Treasury Department is expected to rule on the Central States Pension Fund rescue plan by May 7th. The plan, filed by Central States with the Treasury Department last September, would suspend participant benefits as authorized under MPRA in order to prevent insolvency.
TAUC and our contractor association and union partners continue to push for legislation providing plan trustees with additional tools and more flexibility – such as authorizing the use of composite or hybrid plans – to retain the long-term solvency of their plans. We were heartened to hear House Education and the Workforce Committee Chairman Kline (who will be retiring at the end of this Congress) reiterate at a recent hearing his commitment “to reach an agreement on a package of reforms that will shore up PBGC and give employers and workers options for new benefit plans such as composite plans.”
Although the U.S. Supreme Court issued a stay on President Obama’s Clean Power Plan until it can be fully litigated, cases continue to advance through the lower courts. The D.C. Circuit Court of Appeals has put the appeal on a fast track and scheduled the hearing for June 2; opening briefs were filed on February 19th. Currently, 29 states and multiple other entities have filed lawsuits in opposition to the plan.
On March 3, in contrast to the decision to stay the Clean Power Plan, Supreme Court Chief Justice John Roberts declined to block the 2012 EPA regulation that would limit mercury emissions and other pollutants from coal-fired power plants. Twenty states had sought to block the rule through the D.C. Circuit Court of Appeals, but after their request was turned down, they passed the case onto Chief Justice Roberts. The Supreme Court previously ruled on the regulation in Michigan v. EPA last year. It ordered the agency to conduct an economic review of the rule, which is expected to be completed in April.
On March 30, the Supreme Court heard arguments in U.S. Army Corps of Engineers v. Hawkes Co., Inc., the first major environmental case since the death of Justice Antonin Scalia. At issue is whether landowners can appeal decisions made by the Corps over which streams or wetlands on their property are jurisdictional under the Clean Water Act (CWA). The protections offered by the CWA could have wide-ranging consequences for the construction industry. While the government has argued that these decisions are not eligible for judicial review, Hawkes’ legal team previously won a 2012 Supreme Court case that established judicial review for EPA compliance orders. This case is tied to the Waters of the U.S. (WOTUS) rule and could provide some indication of which way the court is leaning on it, as well.
DOL’s Silica Rule: On March 24, 2016, the Department of Labor’s Occupational Safety and Health Administration announced a final rule to “improve protections for workers exposed to respirable silica dust.” The rule, which was first proposed by OSHA in 2013, reduces the permissible exposure of silica over an eight-hour period to 50 micrograms per cubic meter to 250 micrograms per cubic meter in the construction industry. In order to do so, the rule requires employers to control silica dust through various methods including introducing engineering controls or respirators, limiting access to areas with high levels of dust, and providing medical exams to employees at high risk of exposure. Construction industry employers will have until June 2017 to meet the rule’s requirements. The Construction Industry Safety Coalition, of which TAUC is a member, issued a statement on the OSHA Silica Standard on March 24. OSHA’s Final Rule can be found here: OSHA.gov.
Congressional Building Trades Caucus: Representatives Donald Norcross (D-NJ) and David McKinley (R-WV) recently founded the Congressional Building Trades Caucus. Both Norcross and McKinley have trade backgrounds. McKinley worked in construction for 50 years and Norcross was a union electrician. The bipartisan Caucus will represent the nearly 6.6 million construction workers across the country and advocate for the building trades. The two representatives hope to bridge the gap between labor and business with this Caucus, in order create a “united blueprint for the future.” TAUC Statement.
Paid Sick Leave Executive Order: On February 25, the Department of Labor issued a notice of proposed rulemaking (NPRM) to implement Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors. The order was issued by President Obama on September 7, 2015, and requires contractors that enter into contracts with the federal government (including contracts covered by the Davis-Bacon Act) after January 1, 2017 to provide employees with up to seven days of paid sick leave, including family care, annually. The E.O. only applies to contracts for direct federal projects, and does not apply to projects supported by federal grants. The due date for comments on the NPRM has been extended from March 28 to April 12, 2016. The NPRM and other information can be found here.
DOL’s Overtime Rule: DOL sent its overtime rule to the White House Office of Information and Regulatory Affairs (OIRA) recently for approval. The rule would increase the number of employees eligible for overtime. Specifics of the rule remain unknown, but a Presidential Executive Order issued last year called for employees who make less than $50,400 a year be paid time and a half for overtime. Presently, only those making less than $23,660 are eligible for overtime.