The D.C. Download, May 2022

May 25 2022

Government, Legislative Affairs, TAUC News

The White House has continued to try courting Senator Joe Manchin over the past month, meeting behind closed doors to build censuses on a new reconciliation proposal. After failing to publicly pressure Manchin to support the House-passed Build Back Better Act last year, Democrats have shifted to a low-key, private pressure campaign focused on areas of agreement. Manchin has expressed support for targeted investments in climate-related technology and deficit-reducing tax increases on high-income earners to combat rising inflation. Despite a revamped strategy and renewed emphasis from the Biden administration, it remains unclear if an agreement can be struck before the upcoming midterm elections this fall..

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

U.S. Department of Labor (DOL) Receives Comments to Proposed Davis Bacon Act Modernization

TAUC submitted comments in response to the DOL’s notice of proposed rulemaking (NPRM) to update and modernize prevailing wage protections for federal and federally assisted construction projects under the Davis-Bacon and Related Acts (DBA). We also joined with the other union contractor association in the Construction Employers of America (CEA) in comments supporting the proposed changes, which represent the first comprehensive review of the DBA regulations in four decades.

TAUC’s comments expressed strong support for the effort to update and modernize federal prevailing wage protections on federal and federally assisted construction projects. Over the 40 years since the DOL last undertook a comprehensive review of the DBA regulations, there has been a significant erosion of the DBA’s regulatory framework. This has undermined the Act’s intent of providing wage protections for workers and a level playing field for contractors. This attrition has led to out-of-date wage surveys and incorrect wage rates, making it more difficult for contractors who provide their employees with middle-class wages and benefits and invest in their workforce to compete for government contracts.

Specifically, TAUC’s comments supported the proposal to return to the original definition of prevailing wage that was in effect from 1935 to 1982. The return to the “Three-Step Rule” increases the likelihood that the “prevailing wage” will reflect an actual wage rate paid to workers in a county and remove the need to utilize an artificial weighted average that does not reflect any wage paid to workers.

Among other aspects of the proposed rule, TAUC’s comments also supported the NPRM’s proposals to:

• Ensure that wage rate determinations are more up to date and actually reflect worker compensation by updating prevailing wage rates between surveys to include non-collectively bargained rates based on general wage determinations in the Bureau of Labor Statistics Employment Cost Index (ECI) data.
• Allow DOL – under specific circumstances — to adopt state and local government prevailing wage rates in determination of Davis-Bacon wage rates for all types of construction.
• Clarify that prime contractors are “responsible for compliance” of subcontractors to ensure greater compliance of contractors and subcontracts with the DBA requirements.
• Clarify that an employment relationship between a contractor and a worker is not required for Davis Bacon requirements to apply.
• Revise and expand the DBA’s debarment regulations to both promote consistent enforcement of the Davis-Bacon labor standards provisions and to clarify debarment standards and procedures, as well as the proposed strengthening of anti-retaliation protections against employers who attempt to coerce workers from participating in wage surveys.

Timing on issuing of the final rule is not clear at this point. DOL receive more than 40,000 comments in response to the NPRM. Those comments will have to be reviewed before the rule can be finalized.

Wage Theft Prevention and Wage Recovery Act

On Wednesday, May 11th, the House Education and Labor Committee Subcommittee on Workforce Protections held a hearing on wage theft and recovering stolen wages. The witness included:

• Ms. Karen Cacace, J.D., Labor Bureau Chief, The New York State Office of the Attorney
• Mr. Daniel Swenson-Klatt, Owner and Operator, Butter Bakery Café
• Mr. Francisco Esparza, Representative, United Brotherhood of Carpenters
• Ms. Tammy McCutchen, Senior Affiliate, Resolution Economics

Democrats highlighted unfair practices by employers, including the lack of recourse for many workers when their wages are withheld. Republicans focused on the burdens faced by small businesses, arguing that additional regulation would harm the labor market. Additionally, Republican subcommittee members discussed their opposition to the Biden administration’s reversal of a Trump administration ruling to make it easier to classify workers as independent contractors. They also noted their concerns with broad definitions of joint employers, especially for franchises in the context of increased penalties for wage theft. The first three witnesses touted the proposed legislation from the business owner, union member, and public perspective.

Legislation has been introduced in both the House and the Senate to combat wage theft and promote wage recovery. The “Wage Theft Prevention and Wage Recovery Act” would attempt to address wage theft by requiring employers to regular paystubs to all employees and would create a civil fine for noncompliance; allow workers to recoup the full compensation owed to them by their employer; increase fines and create civil penalties against employers who violate minimum wage and overtime requirements of the Federal Labor Standards Act (FLSA), as well as for violating the FLSA’s recordkeeping requirements.

The House version of this bill was reported out of the House Education and Labor Committee on a 27-19 party-line vote. It is not clear when the full House will consider this legislation or if there will be Senate action on its version of the bill.

Prevailing Wage Coverage in U.S. Innovation and Competition Act and America COMPETES Act

House of Representatives passed the America COMPETES Act (H.R. 4521) by a vote of 222-210. This is the House companion bill to S. 1260, the U.S. Innovation and Competition Act. Both the House and Senate versions of these bills maintained the Davis-Bacon/prevailing wage protections to the tax incentives authorized under the bill to build domestic semiconductor manufacturing capacity. The House and Senate are currently in conference attempting to resolve the difference between their respective versions of the bill. Completion of this legislation remains a major priority for this Congress.