Department of Transportation to Withdraw Local Hire Rule

According to its August Significant Rulemaking Report, the Department of Transportation (DOT) intends to terminate its proposed rule to allow states to impose local hire requirements on contractors working on Federal-aid highway projects. While DOT never finalized this rule, the Obama Administration establish a one year pilot program allowing states to use local hire requirements on an experimental basis. In a last-minute action before the end of its term, the Obama administration extended the pilot program for an additional five years. Last week’s notice expresses DOT's intent to terminate the permanent rule but does not address the pilot program. However, DOT is expected to eliminate the pilot program as well.
AGC has opposed this rule from its inception in comments on the proposal. AGC also discussed our opposition in a meeting with Transportation Secretary Chao early in her term and in letters to DOT on its efforts to reduce regulatory burdens. AGC was also successful in getting language in the DOT appropriations legislation requiring states, in order to receive permission to use a local hire preference, to certify that there is a ready pool of unemployed individuals who reside in the jurisdiction who have the necessary construction skills for the project, that the contractor would not be forced to lay off any current employees to meet the mandate and that the cost of the construction would not increase. FHWA is requiring states using a local hire requirement to meet these certification requirements.
 For more information, contact Brian Deery at deeryb@agc.org or (703) 837-5319.


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