What You Need to Know
BY KEN GARCIA
The Biden Administration is in its third year, and many rules and regulations are under review that are important to AGC of America and its members. It is common for rules to change from administration to administration, and keeping up with what is happening in Washington can be difficult.
Recently, AGC of America held a webinar where staff members provided updates on upcoming and pending regulatory changes that will impact chapters and their members.
Labor and Employment
The Davis-Bacon Act requires contractors and subcontractors working on federally funded projects to pay workers under a contract no less than the local prevailing wages and fringe benefits for work on similar projects in the area.
The current administration is proposing what it calls “modernizing.” The Department of Labor (DOL) wants to expand the definition of “site of work” to cover truck drivers, material supplies and prefabrications work. AGC opposes the department’s proposal to expand what is considered the site of the work, as well as it reverting back to 40-year-old methods for determining prevailing wage rates.
While AGC is against significant parts of this proposal, it does support revisions to improve the Davis-Bacon Act regulations that provide clarity and simplify compliance requirements yielding a more timely and appropriate wage determination process that honors the statutory definition of “site-of-work” requirements and provides additional resources for survey department operations.
“The DOL has tried this in the past,” said Claiborne Guy, Employment Policy and Practices Director, AGC of America. “It’s been decades, but the court said you’re trying to circumvent the intent of the law and circumvent the courts. So, what we said to the DOL is if you intend to do this, go to Congress.”
This specific rule is still undergoing federal review. However, Guy said this is likely imminent. AGC is preparing a coalition effort to file litigation if necessary.
The Inflation Reduction Act (IRA), which has billions in tax incentives for green initiatives, comes with labor hooks. It requires prevailing wages for those who build and operate the facilities as well as apprenticeship requirements to get the incentives. Owners are expected to ensure that contractors and subcontractors honor this requirement.
This is not covered by the Davis-Bacon Act and will be enforced by the Internal Revenue Service (IRS) through the IRA. According to Guy, enforcement may be an issue as the IRS is unprepared and looks to the DOL for guidance, but that department does not have authority in this area.
The association opposes rescinding the Trump-era rule for determining who is an independent contractor under the Federal Labor Standards Act. AGC’s position is to clarify and preserve legitimate independent contractor relationships, such as those that have historically existed in the construction industry. This new rule could go into effect as early as May 2023.
AGC also opposes rescinding a Trump- era rule for defining a joint employer under the National Labor Relations Act. AGC’s position is to ensure the definition of joint employer status is limited to those that exercise direct control over employees’ essential terms and conditions of employment. The proposed rule would loosen the standard. This rule is likely to be released in August 2023.
Environmental
AGC has offered more than two decades of education and outreach on green construction. It has also established a Climate Change Initiative to examine how policy discussion impacts members. A report released in 2021 by the Climate Change Task Force calls for the construction industry to address climate change by focusing on less carbon-intensive projects. In addition, it looks at supply chains, technology and building safe and healthy communities. AGC members can learn more about the initiative at www.agc.org/climate-change. Climate change is an all-government approach for the Biden Administration, and many of the proposed rules are made with this in mind. However, much of this is familiar.
“The difference now is that it’s been ramped up that much more, and the timelines for these goals are much more aggressive,” said Melinda Tomaino, AGC of America’s Environment and Sustainability Director.
The administration is pushing for more “buy clean” construction materials. This emerging program looks at the carbon emissions associated with materials. This information is provided through an Environmental Product Declaration (EPD). These would be analogous to a nutrition label on food. It will be the role of the U.S. Environmental Protection Agency (EPA) to establish these EPDs for materials used in projects associated with the Inflation Reduction Act.
One area of concern for AGC on this proposed rule is how new buy clean programs are. They have only been in place in a couple of states. There is also the potential for contract or legal concerns around paperwork or if there was a product failure. Another concern is that this could be a backdoor to greenhouse gas reporting that Congress did not approve.
AGC is asking for any “buy clean” program to offer an incentive to ensure material performance, allow a transition period, create a waiver process in the event materials are not available that meet the requirements and keep the industry involved in all discussions.
New calculations are being developed on the Social Cost of Greenhouse Gases for regulatory initiatives. Federal agencies use this metric to account for the potential economic impacts of their rulemaking on the climate.
AGC is submitting comments on new greenhouse gas guidance for federal permitting and decision-making as part of the National Environmental Policy Act. In addition, AGC commented on proposed rules for the Securities and Exchange Commission (SEC) to have public companies report their greenhouse gas emissions as well as any companies working under them during a project. A similar rule would impact federal contractors under FAR. Overall, AGC believes the SEC does not have this authority, and timelines for both are unrealistic. This final rule could come out this spring.
The EPA proposes using CERCLA to regulate two PFAS (PFOA/PFOS), requiring reporting requirements and cleanups of contaminated sites, including Superfund liability. AGC is opposed to this new rule and supports provisions that protect contractors who may have interacted with any of the growing list of products with an emerging chemical of concern, like PFAS, on projects during demolition, earthmoving or dewatering activities that could be at risk for liability. The Center for Biological Diversity sued the EPA to regulate discarded PVC as hazardous waste. AGC opposed this and said it wants rules for hazardous substances that make sense for construction. In response, the EPA issued a tentative ruling supporting AGC’s position. AGC and more than 2,000 members submitted letters supporting this tentative ruling.
Finally, AGC opposes the proposed rule change creating a new definition and the expanded scope of projects needing federal permits under the Waters of the United States (WOTUS). AGC’s position is to support efforts to limit federal jurisdiction to the intent of the Clean Water Act and pro- vide clear guidelines as to what types of waters require permits. In addition, there is a pending relevant case before the U.S. Supreme Court, and the rule adds new categories of water, unclear terms and additional joint agency reviews. AGC joined a litigation coalition in response. This rule went into effect in March and the next steps are unclear. The rule may be modified based on the Supreme Court decision.
Safety and Health
The Occupational Health and Safety Administration (OSHA) issued an advance notice about plans to issue a proposed rule addressing heat exposure in the workplace. The idea is that when the temperature reaches a threshold, there will be rules employers must follow to ensure workers are protected from heat-related illness. It’s possible this could be set to 80 degrees.
“They’ve petitioned for more than a decade to finalize a federal standard,” said Kevin Cannon, AGC of America’s Safety and Health Services Senior Director. “There’s a handful of states now with their own, so with the activity at the state level, that puts a lot of pressure on the federal agency to follow suit.”
This is very early in the process. AGC has submitted comments related to this topic. The next step would be an evaluation of the impact of small businesses.
OSHA is also looking to bring back rules from 2016 requiring companies of a certain size to submit detailed injury and illness information to the agency. This rule is expected to go into effect this spring. OSHA is considering revising standards for occupational exposure to lead. They propose reducing the current blood lead level trigger in medical surveillance and medical removal protection provisions. This is very early in the process, and a decision has yet to be made.
Due to a recent increase in the number of fatalities in trenching and excavation projects, OSHA is focusing on safety in these areas. In 2021, there were 15 deaths. In 2020, that increased to 39. AGC supports this and is working with other associations to raise awareness of the hazards.
Finally, there is more focus on mental health and suicide within the construction industry. Construction has the highest rate of suicide at 53.2 per 100,000 U.S. workers. AGC is committed to reducing this statistic and established the Mental Health & Suicide Prevention Task Force of professionals nationwide. Public service announcements have been released and can be found at www.agc.org/mental- health-suicide-prevention.
RESOURCES
Visit www.AGC.org to get access to the following:
• AGC Davis-Bacon Compliance Manual — 5th Edition
• AGC Three-Part Webinar Series: Inflation Reduction Act
• AGC Climate Initiative
• Mental Health & Suicide Prevention