TAUC Legislative & Regulatory Update, September 2019

September 3 2019

TAUC Legislative & Regulatory Update, September 2019

Even though Congress has been on its annual August Recess, there has been a lot of significant action on issues important to the union construction and maintenance industry. The Department of Labor has continued to receive comments on the Trump Administration's proposed apprenticeship and training rule. With an agreement in place on budget spending caps, Ccongressional appropriations committees have been working behind the scenes to develop annual spending bills. Discussions are also continuing on finding a path forward on multiemployer pension reform. In short, it should be an eventful fall.

Here is an exclusive update from TAUC on policy and regulatory issues of vital interest to contractors and the union construction and maintenance industry.

Trump Administration's Proposed Apprenticeship and Training Rule

The comment period on the Trump Administration's proposed rule to overhaul the nation's apprenticeship and training system and encourage the creation of apprentice training programs across a wide variety of industry sectors closed last month. TAUC and other union construction contractor trade associations supported extending the comment period to provide additional time to review the significant changes proposed in the rule and better understand the impact it could have on privately funded joint labor-management registered apprenticeship programs. DOL rejected the request.

With the comment period closed, DOL must now review the over 325,000 comments submitted in the docket of the proposed rule. TAUC's comments can be found here. Thank you to all TAUC members who submitted comments to the docket on this proposed rule.

Throughout the comment period, TAUC has been working closely with NABTU, the CEA and other union contractor associations to ensure that the proposal's new "Industry Recognized Apprenticeship Programs" (IRAPs) do not undermine the union construction industry's privately funded registered apprentice programs. With construction programs making up 48 percent of all registered apprenticeship and training programs, we do not believe it is necessary to establish new programs in the construction industry designed to work outside of the existing registered apprenticeship system. While the Administration claims that the IRAPs established under the proposed rule would provide greater flexibility, TAUC and other associations representing contributing employers have serious concerns that these new programs would lack sufficient government oversight and training standards. We do not believe it is appropriated to allow employers to design and certify their own federally assisted training programs with minimal government oversight.

We are hopeful that the final rule will not allow the establishment of IRAPs in the construction industry. The proposed rule states that the DOL would not, "at least initially," accept applications to recognize IRAPs in the construction industry. Unfortunately, it is not clear that DOL would not consider construction industry IRAPs in the future. TAUC and our allies believe that there should be no IRAPs in the construction industry and have requested that the final rule permanently exempt construction.

We are also concerned that if DOL does allow IRAPs in the construction industry, it will undermine Federal prevailing wage requirements. To encourage "meaningful training" in the construction industry, the DOL has permitted participants in privately funded registered apprenticeship programs working on Federal construction projects be paid less than the prevailing wage for that craft only if a series of very strict conditions – such has maintaining an appropriation apprentice-to-journeyworker ratio and maintaining strict safety conditions — are met. If DOL were to allow IRAPs in the construction industry, we have argued that it is inappropriate to allow contractors participating in these programs to be included in this narrow exemption in the Davis Bacon Act given serious concerns over the lack of oversight to ensure high quality training and worksite safety standards. This would create an uneven playing field between contractors participating in IRAPs and signatory contractors participating in privately funded registered apprenticeship programs.

Finally, TAUC expressed concerns with DOL's narrow definition of construction in the proposed rule, which could exclude the programs operating in the industrial maintenance sector. We argue that these activities are inherently linked to construction, share many of the same workplace conditions and nature, and should not be excluded from the construction exemption in the NPRM.

In addition to industry comments, TAUC has worked closely with our colleagues in the CEA to encourage Republican members of congress to sign on to a letter urging the administration not to undermine registered apprenticeship programs. The effort was led by Congressman David McKinley of West Virginia. 34 members signed on to the letter, which can be found here.

We will continue to monitor the development of the final rule. There is no specific timeline at this point for DOL to review and respond to comments and issue its final rule. Updates on its progress and additional information will continue to the available on TAUC's Apprenticeship Rule Resource Page.

Multiemployer Pension Reform

With the House passage of H.R. 397, the "Rehabilitation for Multiemployer Pensions Act" (aka the Butch Lewis Act) prior to leaving for the August recess, action now moves to the Senate where we are hopeful a comprehensive solution will be developed to address the crisis facing the multiemployer system.

TAUC continues to meet with key Senate staffers to advocate for the passage of comprehensive pension reform legislation that includes the authorization of the use of composite plans. Staff have said that H.R. 397, in its current form, would not receive support from a majority of the Senate. Despite the lack of support in the Senate, however, Senator Sherrod Brown (D-OH) introduced identical legislation on June 24th. We have been told that this legislation is not the endpoint for him or the other sponsors, and they will work with their colleagues on other measures.

It is not clear at this point what proposed changes would receive the 60 votes necessary to end the expected filibuster of this significant legislation. The Senate Finance Committee and the Senate Health, Education, Labor and Pension Committee are expected to work on crafting a bipartisan and more comprehensive proposal. Partition of the "orphans" (i.e. unfunded vested liabilities associated with withdrawn employers) and other tools to allow trustees to proactively manage plans appear to be central to the senate's discussions. This is also likely to include discussions related to the multiemployer premiums and plan funding requirements. Many of the proposals are expected to track issues raised during the deliberations of the Joint Select Committee on the Solvency of Multiemployer Pension Plans.

We also continue to work with the CEA, NCCMP, AGC, the U.S. Chamber of Commerce, and other employer groups to educate members of Congress about our pension reform priorities and the need for composite plans.