Trump Administration Drops Local Hire Program That Would Have Employed Hundreds of Thousands of Americans

AUG 25, 2017

The U.S. Department of Transportation announced, that effective on August 25, it will no longer support local hire programs in cities that receive federal grants.

The DOT announced this week that it is withdrawing a proposed revision of a rule that – since 1988 – has prohibited the use of geographic preferences in the expenditure of federal grant funds. This change will go into effect on August 25.

The proposed rule and accompanying local hire pilot program, originally drafted by the Obama administration in 2015, has allowed cities receiving federal grant funds to apply local hire policies to federally funded construction projects, so long as that language did not violate federal law. With this week’s announcement, the Trump DOT is officially signalling that it will no longer pursue that rule change.

Madeline Janis, executive director of Jobs to Move America, said: “This administration’s withdrawal of support for local job creation directly contradicts President Trump’s stated commitment to creating good jobs for people in this country. Many Americans continue to suffer from poverty and inequality and desperately need the opportunities that are created by our federal infrastructure and transportation investments. Why not give local communities the opportunity to benefit from taxpayer investment?”

“Local hire has allowed municipalities to use their own money to help employ people directly from their communities. It has been strategic for our elected leaders to say that they’re not going to raise our tax dollars for investments in capital projects without ensuring that persons facing significant barriers to employment get expanded access to good jobs and training opportunities,” said Erik Miller, executive director of Playa Vista Job Opportunities and Business Services.

(Read More)

One key to affordable housing crisis? Pay construction workers a living wage.

Special to The Bee
AUGUST 21, 2017 1:00 PM


No amount of project streamlining can solve California’s housing affordability problem by itself.

To lower prices, California needs to build a lot more housing. But to do that, it needs enough workers with the skills to do so safely and correctly. Prevailing wage standards, which function as a local minimum wage for skilled construction work, can help address these critical needs and improve the industry’s competitiveness in increasingly tight labor markets.

According to the National Association of Home Builders, the number of builders reporting “some or serious” labor shortages grew from 21 percent in 2012 to 56 percent in 2016. More workers are choosing not to work in construction because it is no longer the gateway to the middle class.

A recent study by Smart Cities Prevail showed that inflation-adjusted wages for California’s blue-collar construction workers have declined 25 percent since 1990. In some communities, more than half of these workers must rely on housing subsidies, and nearly 40 percent don’t have health insurance. The study also reveals that what were once middle-class incomes are being redistributed into the pockets of developers and builders, whose profits have grown 50 percent faster than either labor or material costs since 1992.

Sadly, there are even more disturbing racial disparities. According to a UCLA analysis, the share of immigrants in California’s construction workforce has grown from 13 percent to 43 percent since 1980. On average, Latinos are being paid just 68 cents for every $1 of their white counterparts. These trends have tracked a growing pattern of illegal wage theft by unscrupulous contractors. The Trump administration’s anti-immigrant rhetoric makes it less likely that workers will speak out against employers who cheat.

(Read More)

19th Annual NAFC Conference – Nashville, TN, Sept. 25 – 26, 2017

NAFC will be holding its 2017 Annual Conference in Music City U.S.A., Nashville, Tennessee. The Conference will be held at the Sheraton Nashville Downtown Hotel, in the heart of the city. NAFC’s National Conference is attended by several hundred participants from across the nation, including representatives from labor organizations, fair contractors, fair contracting compliance organizations as well as researchers, academics, attorneys and officials from federal, state and local governments. A schedule of events and registration forms are available at the below link to NAFC’s Conference page. Stay tuned for further details.

Registration is Currently Sold Out

(View NAFC Conference Page)

President Donald J. Trump Announces Intent to Nominate Personnel to Key Administration Posts

The White House
Office of the Press Secretary
For Immediate Release
September 02, 2017

President Donald J. Trump today announced his intent to nominate the following individuals to key positions in his Administration:

Cheryl Marie Stanton of South Carolina to be Administrator of the Wage and Hour Division, Department of Labor.

Ms. Stanton currently serves as the Executive Director for the South Carolina Department of Employment and Workforce, a position to which she was appointed in 2013 by then-Governor Nikki R. Haley. Prior to that role, Ms. Stanton worked as a labor and employment attorney in both the public and private sectors. In the public sector, she served as Associate White House Counsel for President George W. Bush. In that role, Stanton was the administration’s principal liaison to the U.S. Department of Labor, National Labor Relations Board and the Equal Employment Opportunity Commission. Ms. Stanton also served as a law clerk to the Honorable Samuel A. Alito, Jr., U.S. Court of Appeals for the Third Circuit. She received her J.D. from the Law School at the University of Chicago and her B.A. from Williams College. In 2016, then-Governor Nikki R. Haley awarded Ms. Stanton the Order of the Palmetto, the highest civilian honor in the State of South Carolina.

(Read More)

Blackstone’s Infrastructure Business Adopts Responsible Contractor Policy to Promote Fair Wages and Benefits for Workers on Infrastructure Projects

Press Releases
SEP 05, 2017

New York, September 5, 2017 – Blackstone (NYSE:BX) today announced that its dedicated infrastructure business has adopted a Responsible Contractor Policy that includes an agreement to cooperate with the North America’s Building Trades Unions (“NABTU”) to include “responsible contractors” in the bidding and selection process for its investments. Through this policy, Blackstone will promote fair benefits, wages, working conditions, and training opportunities for construction workers on projects for Blackstone’s dedicated infrastructure business.

In May, Blackstone announced the launch of its dedicated infrastructure investment vehicle with an anchor $20 billion commitment by the Public Investment Fund of Saudi Arabia. Blackstone anticipates that, over time, the program will have $40 billion in total equity commitments in a permanent capital vehicle, including $20 billion to be raised from other investors. Overall, through the equity in this vehicle and additional debt financing, Blackstone expects to invest in more than $100 billion of infrastructure projects, principally in the United States.

Sean Klimczak, Senior Managing Director and Global Head of Blackstone’s Infrastructure business, said: “Rebuilding our country’s aging infrastructure will create badly needed jobs with good wages and benefits for construction workers throughout the United States. At Blackstone, we have a strong track record of responsible engagement with workers, their labor union representatives, and the communities in which we invest. We are proud to partner with the NABTU in this effort because we believe a fairly compensated and well-trained workforce is critical to producing high-quality infrastructure projects that help drive local economic growth.”

(Read More)

‘Worker misclassification’ seen as growing threat by contractors, unions in the Region

Andrew Steele
Sep 3, 2017

As companies strive to increase profits amid a changing economy and consumer habits, the discussion often centers on challenges posed by the “gig economy” and its impact on work and employment.

Upstart companies like the Uber ride-sharing service tend to be the focus of concern; recent reports of such companies’ drivers speaking out against perceived company efforts to trim their pay bear this out.

But the growing use of short-term contracts in industries such as construction is threatening traditional employment in a way some say has reached a critical phase.

The fight is over what’s commonly called “employee misclassification” – or payroll fraud, in the view of unions and contractors. It involves an employer hiring workers as freelancing contractors who should be full-time employees, thereby allowing the employer to avoid paying payroll taxes, and worker’s compensation and unemployment insurance premiums, among other costs.

“It’s a problem that’s been around for many decades,” said Dewey Pearman, executive director of the Construction Advancement Foundation of Northwest Indiana. “But it’s becoming epidemic.”

Officials with the Indiana/Kentucky/Ohio Regional Council of Carpenters visit job sites frequently to talk to carpenters, said Scott Cooley, senior representative at the union’s local headquarters. He said he often talks to contract workers who he believes should be formal employees.

“We run into it all the time,” Cooley said. “It’s just a regular occurrence.”
Some workers in question receive a federal 1099 form at the end of the year, but others aren’t reported at all, and are just paid cash for their work.

‘No magic’ in defining employment

Classifying employees properly isn’t an exact science. It involves several variables, including the degree of company control over the employee; the financial arrangement, including who provides tools and supplies; whether there are benefits such as a pension and insurance; and whether work performed is a key component of the business’ activity.
The Internal Revenue Service lists 20 factors to consider, and states in its guidance on the matter that “there is no ‘magic’ or set number of factors that ‘makes’ the worker an employee or an independent contractor.”

But contractors and the carpenters’ union say some building projects are rife with contract workers who clearly are misclassified: their hours and duties are assigned by their employer, their tools and supplies are provided, and their work is a core function of the company – all factors that generally make one an employee, not a contract worker, in the eyes of the law.

(Read More)

Opinion: Wage discrimination in construction industry makes minimum standards a good idea

PUBLISHED: August 30, 2017 at 11:49 am
UPDATED: August 30, 2017 at 5:32 pm

Equal pay for equal work remains elusive, even here in progressive California.

A recent study by Smart Cities Prevail showed that Latinos make up two thirds of the construction workforce, yet only make about 70 cents on the dollar of white workers with the same skills. The study noted that Latino construction workers also are significantly more likely to be uninsured and to struggle with housing affordability.
Low minimum wage standards are one factor that contributes to these types of disparities.

California legislators are soon expected to consider streamlining development of more housing across our state. At its core, the proposal involves removing certain regulatory hurdles in exchange for guarantees that a small percentage of new developments will include “affordable” units.

A similar effort failed last year when no agreement was reached on wage standards for workers on streamlined projects.

According to industry research, workers’ wages and benefits are just 15 percent of the total cost of constructing housing. By comparison, profits for developers and contractors are 18 percent of costs and growing faster than the cost of labor.

And with labor standards being eroded, other problems have become more pervasive.

For example, wage theft occurs when employees are paid for fewer hours than they worked, less than legally required, or when their employer is paying in cash and cheating on payroll taxes. California’s construction industry has seen a 400 percent increase in wage theft since the 1970s-a period that has also seen a dramatic increase in the share of immigrants in our construction workforce.

(Read More)

Understanding Wage Rates Under California’s Prevailing Wage Law

Richard E. Donahoo

California’s Prevailing Wage Law requires contractors to pay specific wage rates on public works projects. The rates are published by the State’s Department of Industrial Relations (“DIR”). The published rates include many different prevailing wage rates, which are based on the geographic location and the type of work that is performed. The rates are organized and published by the DIR in General Prevailing Wage Determinations, which set forth the rates for worker classifications (e.g., Laborer, Carpenter, Plumber, Operator). The specific rates applicable for each craft, classification, or type of work, and for each geographic locality throughout the state, can be located on the DIR website at Understanding how to read a General Determination is important to understanding the required rate.

Prevailing Wage Determinations

California Labor Code (section 1774) states that workers must be paid not less than the “specified prevailing rates of wages” to all workmen employed in the execution of the contract. These specific rates are found in the General Determinations, which correspond to the type of work actually performed by individual workers. As explained in the State’s Public Works Manual,

“A worker’s title or status with the employer is not determinative of an individual’s coverage by the prevailing wage laws. What is determinative is whether the duties performed by the individual on a public works project constitute covered work. An individual who performs skilled or unskilled labor on a public works project is entitled to be paid the applicable prevailing wage rate for the time the work is performed, regardless of whether the individual holds a particular status such as partner, owner, owner-operator, independent contractor or sole proprietor, or holds a particular title with the employer such as president, vice-president, superintendent or foreman. For example, a “working” foreman or a “working” superintendent – one who performs labor on the project in connection with supervisorial responsibilities – is entitled to compensation at not less than the prevailing rate for the type of work performed.”

The Basic Hourly Rate vs Total Rate

General Determinations include both a Basic Hourly Rate and the Total Hourly Rate for each location and classification. Employers are required by California law to pay employees the Basic Hourly Rate as the minimum hourly wage for all hours worked. The Total Hourly Rate includes the Basic Hourly Rate and additional compensation for “employer payments” which are typically fringe benefits such as health insurance, vacation, pension and other “fringe benefits.” Employers can choose to pay fringe benefits directly to employees as part of their wages or can obtain an offset for the employer’s “actual cost” of the benefit provided to the employee that was paid into a bona fide health, pension, vacation, or fringe benefit plan. Either way, the total compensation paid by the employer to the employee must match the Total Hourly Wage set by the Director in the General Determination.

(Read More)

White House stops plan for companies to report worker pay by race and gender

By James F. Peltz – Contact Reporter
August 30, 2017 at 2:15 pm

The White House has halted an Obama administration rule that would require businesses to report worker pay data by gender, race and ethnic groups in hopes of narrowing wage gaps among workers.

The plan was announced by President Obama in early 2016 and was set to take effect early next year.

But the Trump administration, siding with the U.S. Chamber of Commerce and others, contended that the data collection would be too burdensome for firms and questioned how effective the information might be in fighting wage discrimination.

Critics of the White House move, which came in a memo from the Office of Management and Budget on Tuesday, were outraged.

“Make no mistake – it’s an all-out attack on equal pay,” Fatima Goss Graves, president of the National Women’s Law Center, said in a statement. “Today’s action sends a clear message to employers: If you want to ignore pay inequities and sweep them under the rug, this administration has your back.”

The plan would have expanded a 2014 executive order that the Labor Department collect wage data by gender, race and ethnicity from federal contractors.

The Equal Employment Opportunity Commission had proposed that all employers with at least 100 workers submit the data across 10 job categories and 12 pay ranges on a form they already are required to submit annually that includes employment data by gender, race and ethnicity.

(Read More)

AGC of Ohio Chief Debunks Prevailing Wage Detractors

Submitted by Karen Andryscik on
August 28, 2017 – 8:19am

By Richard J. Hobbs, Executive Vice-President – AGC Columbus

After 36 years at the helm of the Associated General Contractors of Ohio (an organization composed of open shop/nonunion and union commercial contractors throughout the state), I’ve heard many outrageous, false claims about significant savings by removing Ohio’s prevailing-wage law. I respond to the Aug. 19 op-ed by Butch Valentine, Laurelville’s volunteer fire chief, blaming the Ohio wage law for the inability to build a new fire station.

Valentine contended that the law inflates the cost of a new facility by 37.5 to 50 percent. This is an outrageous statement. Construction labor represents on average 22-25 percent of a project cost, depending on complexity. Valentine indicated that the cost of a $800,000 fire station would be increased by $300,000 to $400,000. Either his original architectural plans excluded labor costs or he was counting on volunteer construction labor.

He went on to cite inaccurate claims as factual. His referred to the Legislative Service Commission study of 2002 that was thoroughly debunked by Ohio State University Professor Herbert Weisberg, and by a 2017 study from researchers at Bowling Green State, Kent State and Colorado State universities. It found that “LSC had no valid basis” to its claimed cost savings. Valentine further asserted that prevailing-wage projects had less competition. Wrong again. The 2017 study found that projects covered by prevailing wages had more competition, and that more of those contracts went to Ohio construction companies, not out-of-state firms.

Valentine also suggested that Indiana has seen significant savings by repealing its prevailing-wage law. Once again, false. The Indiana Republican assistant House majority leader candidly admitted this year that his state hasn’t “seen a dime of savings out of it,” and that claims of huge savings from repeal, like Valentine’s, were just “rhetoric.”

(Read More)