In a show of independence, the Office of Advocacy, an independent office within the U.S. Small Business Administration SBA), held a virtual roundtable to hear directly from small businesses about DOL’s proposed rule to update regulations implementing the Davis Bacon Act (DBA). The SBA conducted a session with parties concerned with expansion of the Davis-Bacon Act requirements. Comments on DOL’s proposed rule on Davis-Bacon are due May 17, 2022.

Background
On March 18, 2022, the Department of Labor (DOL) published a proposed rule to update regulations implementing the Davis-Bacon Act, which applies to federal and federally-assisted construction projects.

DOL has prepared an initial regulatory flexibility analysis for this rulemaking and seeks feedback on the numbers of small businesses affected and their compliance costs.
(a) The proposal revises definitions such as “site of the work” to include sites where prefabricated buildings are produced and “scope of work” to include energy infrastructure. [These changes may lead to more small firms being required to comply with Davis-Bacon labor standards]. 
(b) The proposal also changes the methodology for determining the prevailing wage. [DOL currently uses the average rate if a majority of workers do not receive the same wage rate. Under the proposed rule, if a majority of workers are not paid a particular wage, DOL will identify any wage rate that is paid to more than 30 percent of the workers as prevailing. If there is still no wage prevailing, the agency will revert to an average rate to determine prevailing wage]. 
(c) DOL also proposes to update non-union prevailing rates every three years to address out-of-date wage determinations.

After conducting an initial round of discussions on a proposed overtime rule change regarding the salary exemption, the Department of Labor (DOL) has yet to announce the schedule for eight more meetings that are to include the design/construction community (see, CIRT story on this matter from January 25, 2022). This second set of “listening sessions” are intended to go through the beginning of May.

So far, according to reports, in the earlier round the agency has met with trade associations representing general industry, various PPWO members, and higher education. In all three meetings, stakeholders have uniformly asked the Department to delay any proposed rule, asserting this is not the time for a change. Particularly helpful have been specific examples of how a change in the rules would impact certain occupations and employees’ opportunities for training, career development, and remote work.

Timing of the proposed rule remains unclear as DOL’s stakeholder meetings stretch past the April timeframe. The Spring Regulatory Agenda, which the government should release in the next month or so, may provide more specifics.

Keeping with the green tradition, that is St. Patrick’s Day green, EPA announced today updates to its priority list of Superfund designated sites around the country.

See Announcement for full details.

President Biden is set to sign an Executive Order (E.O.), that will require use of Project Labor Agreements (PLAs) on certain direct federal contracts.  The order will cover federal construction projects costing more than $35 million, which are estimated to affect approximately $265 billion in total federal construction contracting meeting the targeted criteria.  More specifically, the E.O.’s PLAs requirement will only apply to provisions in the recently passed $1.2 trillion “Bipartisan Infrastructure Law” that are direct federal procurements; meaning projects funded by grants to non-federal agencies are excluded. Once signed today (02/04/22), the Order will go into effect immediately.

The Executive Order has been criticized for MANDATING or requiring the PLAs in all federal contracts meeting the criteria, without regard to the larger picture as to the impacts it will have on competition, costs to the projects (increasing them 12-20% according to a Beacon-Hill Institute study), and workforce displacements – especially when the economy is facing workforce shortages due to other federal policies and initiatives. [CIRT is not opposed to the use of PLA’s when the parties find it to be appropriate to their needs, but the Round Table has consistently opposed mandating or requiring it on contracts with a “single size fits all” approach as reflected in the new Biden E.O.]  In addition, the Order once again circumvents Congress, where members of the design/construction community have urged U.S. House and Senate lawmakers to cosponsor the “Fair and Open Competition Act” (H.R. 1284/S. 403), which would prevent the federal government from mandating PLAs as a condition of winning federal or federally assisted construction contracts.

CIRT joined 110 organizations representing businesses, states, municipalities, universities, and non-profits to formally request the U.S. Department of Labor (“DOL”) hold stakeholder meetings PRIOR to the development and issuance of a notice on new rules related to overtime requirements for salaried employees.

The importance of this potential new rulemaking is the target: “exemption of bona fide executive, administrative, and professional employees from the Fair Labor Standards Act’s minimum wage and overtime requirements” (also known as the “white collar” exemption).  This exemption strikes at the heart of CIRT member firms – which have a large number of these so-called “white collar” or salaried exempted employees in their workforce.

DOL had intended to simply issue an Notice of Proposed Rulemaking, without prior discussion, picking-up a highly controversial and rejected Obama-era arbitrary “one size fits all” significant rulemaking, particularly with respect to the numbers of employees affected, cost for labor, and difficulty to implement – never mind the impact to the workforce norms.

NOTE: Effective Jan. 1, 2020, President Donald Trump's administration raised the salary threshold to $35,568 from $23,660 at the time. While the Biden DOL has not stated how high it plans to raise the salary requirement to still be exempt from overtime payments, Congressional members and allies have urged it be by over 100% to at least to $82,732 by 2026.

SEE Attached Letter for details

[BACKGROUND STORY: JULY 3, 2015 – Overtime Rule Changes for SALARIED Employees (WERE) Proposed President Obama is touting a proposed rule change that may affect millions of “salaried/exempt” employees that heretofore were not eligible by dent of the “duties test” and their pay levels for overtime.  The Department of Labor (DoL) is planning to use its authority under the Fair Labor Standards Act of 1938 (which allows it to do so without Congressional approval) to adjust/change the amount of pay a “salaried” employee must receive to be still “exempt” from overtime pay.  Currently, firms that pay salaried workers less than $455 a week (or $23,660 a year) must pay overtime to them, even if they meet the “duties test” (i.e., they are correctly classified as executive, administrative, and/or professional employees).   DoL proposes to increase the salary level threshold to $50,400 per year (or approximately $970 per week) thereby increasing the number of “salaried” employees eligible for overtime (some estimate that would mean about 40% of salaried employees) – again, notwithstanding if they meet the “duties test.”  The ambitious timetable for this proposed change is for it to take effect on the first of January 2016 (merely a coincidence it is a presidential election year].

BREAKING NEWS!! U.S. District Judge Gregory Van Tatenhove on Tuesday blocked President Joe Biden’s COVID-19 vaccine mandate for some federal contractors.  In short, the federal judge found that Biden likely lacks the authority to impose such a mandate across the board saying in part: “The question presented here is narrow. Can the president use congressionally delegated authority to manage the federal procurement of goods and services to impose vaccines on the employees of federal contractors and subcontractors? In all likelihood, the answer to that question is no.”  As a result, Van Tatenhove granted a request for a preliminary injunction covering the three states that requested the stay – namely Kentucky, Ohio, and Tennessee.

Biden signed an executive order in September that set-in motion a process that had OSHA take the lead on private sector businesses, with the assumption federal contractors could force all their workers to get a COVID-19 vaccine unless the worker is entitled to an exception based solely on the fact they were receiving federal dollars.  Any contractors who did not comply with the order, originally set with a Dec. 8 deadline, were poised to lose the government’s business.

The federal judge sited the Tenth Amendment to the Constitution while finding the three states arguments persuasive as they related to:  the vaccine mandate was both illegal and unconstitutional, in part because it was imposed with little regard to “important aspects surrounding the mandate, including but not limited to economic impacts, cost to States, cost to citizens, labor-force and supply-chain disruptions, the current risks of COVID-19, and basic distinctions among workers such as those with natural immunity to COVID-19 and those who work remotely or with limited in-person contacts, among other aspects.”

BREAKING NEWS!!  In response to the stinging Fifth Circuit Ruling (read story below)  -- OSHA has suspended activities related to the implementation and enforcement of the ETS pending future developments in the litigation, the Labor Department affirmed in recognition of the court’s authority and ruling.

11/17/21 – U.S. Circuit Reaffirms Halt on Vaccine Mandate [UPDATE]

In clear, unambiguous, direct language the U.S. Court of Appeals for the 5th Circuit has extended its earlier preliminary stay on the Biden administration's vaccine mandate for private employers.  A unanimous, and seemingly annoyed three-judge panel (after hearing the White House instruct businesses to ignore its preliminary injunction), called the President’s proposed vaccine mandate: "fatally flawed" and "staggeringly broad."

The stay, which the court issued on Friday evening, says OSHA shall "take no steps to implement or enforce the Mandate until further court order." The judges were unmistakably signaling they expect the agency to heed its ruling. The pause is "pending adequate judicial review of the petitioners' underlying motions for a permanent injunction." But the court left little doubt that it would grant those motions, saying "petitioners' challenges to the Mandate show a great likelihood of success on the merits.

The Biden administration has released the new rule from the Occupational Safety and Health Administration (OSHA) requiring 84 million private sector workers to get vaccinated for COVID-19.  However, the White House further announced that it is pushing back the deadline for workers in the health care sectors, as well as federal contractors, to get fully vaccinated to Jan. 4, 2022. The highly contentious and likely Unconstitutional mandate has ignited a “fire storm” of protests and lawsuits (many being pursued by state governments as well as public sector employees).  Critics have torn into the federal government over-reach by the President, arguing it is rooted in panic-based policymaking rather than following the science or simple logic.

The current OSHA rule making seeks to enforce private-sector employers with 100 or more employees to put vaccine requirements in place for all staff, or face fines of up to $14,000 per violation. The agency is using powers it claims under Emergency Temporary Standard (ETS) when it determines workers are at “grave risk” to promulgate this wide-ranging proposal. Under the rule, workers who are not vaccinated are required to submit a weekly negative COVID test at no expense to their employer. Unvaccinated workers are also required to wear masks when on the job. In addition, the burden is shifted to the businesses under the ETS, by requiring employers to determine and keep records of the vaccination status of each employee and report all COVID deaths and hospitalizations to OSHA.

The rule takes effect immediately upon publication, scheduled for Nov. 5, in the Federal Register. See, www.regulations.govhttps://t.co/urxVSkmYa0 https://twitter.com/benshapiro/status/1456247886140817409?s=27

Instructions: OSHA is seeking public comments on aspects of the standard, (which it may be ultimately expanded to include smaller businesses).  All submissions must include the agency's name and the docket number for this rulemaking (Docket No. OSHA-2021-0007).  All comments are placed in the public docket without change and may be made available online

RESOURCE:  FREE -- HR Daily Advisor Webinar on Workplace Vaccine Mandates (legal analysis) on Monday, November 15, 2021 (3:00PM EST), hosted by HR Daily Advisor, sponsored by INTELEX.  Learn more about this FREE LEGAL ANALYSIS / WEBINAR and REGISTER HERE

Alarm bells are being sounded as a rash of new or the return of more restrictive regulations are pursued by the Biden Administration that will undercut the promise of expanded infrastructure expenditures.  Throughout the system, the balance between regulations vs. CIRT supported streamlining procedures is being waged; as for example, the White House proposed environmental regulations that would scale back Trump administration reforms and likely slow down future infrastructure projects.

The Administration announced important changes it was implementing that would affect how the federal government would go forward with respect to infrastructure work.  Specifically, how it will once again enforce the 1969 National Environmental Policy Act (NEPA), the law requiring federal agencies to have environmental impact statements for infrastructure projects before approval. Essentially, Biden’s proposed rule would reverse the Trump Administration’s changed that were aimed at streamlining environment review to accelerate infrastructure projects. Critics were quick to point out that imposing the old approaches under NAPA would be counterproductive to Biden’s own infrastructure spending priorities being sought with passage of his ambitious $1.2 Trillion Infrastructure Investment and Jobs Act.  Heritage Foundation Senior Research Fellow Diane Katz is reported as having summed it up simply: “If you want infrastructure improvement, then why would you want to implement one of the primary sources (using NEPA as a vehicle) of delay and protracted litigation that kept these improvements from being made to begin with?”

As noted in CIRT’s story on this topic in September, President Biden’s decision to impose mandatory vaccination requirements on individuals and private sector firms of more than 100 employees, etc. has been meet with wide spread criticism – as well as Constitutional legal challenges.  One aspect of the President’s EO (Executive Order (EO) 14042; issued Sept. 9, 2021) that is less vulnerable to being overturned legally regards its application to federal contractors. While CIRT does not have a formal written policy on this matter, it typically opposes mandates, requirements, and other dictates that appear to be an overreach of the federal government that have burdensome impacts on the members.  So although the vaccine mandate does not apply to all federal contractors and does not apply immediately to any existing contract – the threat of the mandate being imposed in the coming months means member companies with federal/public contracts will likely be negatively impacted when it comes to workforce concerns arising from the requirement.

Specifically, President Joe Biden order mandating COVID-19 vaccination applies to employees working on or in connection with covered federal government contracts and subcontracts, with some exceptions. [To trigger coverage under the mandate established by EO 14042, a contractor must enter into a federal government "contract or contract-like instrument" on or after November 14, 2021, that meets or exceeds the simplified acquisition threshold (currently $250,000)].

On September 24, 2021, the Safer Federal Workforce Task Force issued guidance that requires covered federal contractor employees to be fully vaccinated against COVID-19 by December 8, 2021.  The guidance also addresses several other important aspects relating to implementation of EO 14042, which is intended to be binding.