House Passes AGC-Supported Bill to Clarify Joint Employer Definition
AGC Calls on Senate to Act
On Nov. 7, the House approved and AGC-backed legislation that restores the joint employer standard that existed prior to the National Labor Relations Board’s (NLRB) 2015 Browning-Ferris Industries decision. That decision broadened the definition of joint employer from those that share direct control over terms and conditions of employment to those with indirect control.
AGC and its multi-industry coalition long advocated for passage of the bill in the House and will now turn to advancing it in the Senate. In addition to the legislative remedy, AGC is also involved in a legal challenge to the decision and that challenge is currently under appeal in federal court.
The legislation, if approved by the Senate and signed into law, would simply clarify that two or more employers must have “actual, direct, and immediate” control over employees to be considered joint employers. In addition, the bill targets changes made by the Obama administration’s Department of Labor which expanded the concept of joint employer under the Fair Labor Standards Act.
While the vote this week was bipartisan, it will be a challenge to overcome the senate’s 60 vote procedural threshold due to Democrat opposition.
For more information, contact Jim Young at [email protected] or (202) 547-0133.
WebEd: How Tax Reform May Impact YOUR Construction Business/Market
Nov. 20, 2017 from 2:00 PM to 3:30 PM ET
Register today for this complementary webinar for AGC members. As you know, the most far-reaching tax reform legislation since 1986 is speeding through Congress. No matter what your construction market—public or private—or construction firm—c-corporation, s-corporation, LLC, LLP, or partnership—the passage of this legislation will have an impact on you.
During this webinar, AGC’s lead infrastructure and tax lobbyists on Capitol Hill—Sean O’Neill and Matt Turkstra— and Chief Economist Ken Simonson will discuss:
- The latest updates on what’s in and what’s out of the tax reform legislation;
- The likelihood of its becoming law and, if so, when it would take effect;
- What this could mean for your construction business—no matter the type, c-corp, s-corp, LLC, partnership or so forth;
- What this could mean for your construction marketplace—public or private; and
- How AGC is advocating for your business and what you can do to help shape this critical legislation.
For more information or to register, click here.
For more information, contact Matthew Turkstra at [email protected] or (202) 547-4733.
House Continues Work on Tax Reform Bill
The House Ways and Means Committee began a formal markup this week of Congressional Republicans’ tax reform legislation, H.R. 1, the Tax Cuts and Jobs Act. AGC applauded the release of the long-awaited legislation last week, but noted specific concerns about the treatment of pass-through businesses (S-corporations, LLC’s, Partnerships, etc.) and the lack of infrastructure funding in the plan. AGC is asking you to contact your members of Congress and urge them to treat S-corps fairly as compared to C-corps and maintain incentives for public and private construction in tax reform.
Senate Republicans are expected to unveil their version of a tax reform bill today, Nov. 9, but as of publication had not done so.
The House legislation would make sweeping changes for the tax code, eliminating dozens of deductions and credits in exchange for lower rates and a much larger “standard deduction.” For a full summary and legislative text of the bill from the Ways and Means Committee see here and here. For construction priorities there are both good provisions and areas of concern:
Positives:
- Repeal of corporate and individual Alternative Minimum Tax;
- An increase in the small contractor exemption from percentage of completion accounting to $25 million from $10 million;
- Estate tax exemption doubled, then repealed after 2023;
- Full expensing for the next five years, and expanded Section 179 expensing over the same time frame; and
- Reduced rates for individuals/pass-throughs/corporations
- Repeal of the Domestic Production Activities deduction (Section 199);
- Elimination of 1031 Like Kind Exchanges for equipment (real property is retained);
- No additional funding for the Highway Trust Fund;
- Elimination of tax exemption for Private Activity Bonds and the Historic Tax Credit;
- No composite plan model for multiemployer plans;
- Elimination of Work Opportunity Tax Credit; and
- Limitations on net operating loss carry back and carry forward.
The biggest tax-related concern, however, is how the legislation treats pass-through businesses. While the corporate rate is reduced to 20 percent, and the bill caps business income at 25 percent, it also proposes that 70 percent of pass-through business income for owners active in the business be treated as wages, subject to the individual rates, and 30 percent capped at the 25 percent rate. The net result is a blended rate of approximately 32 to 35 percent, plus payroll taxes for active owners of pass-through businesses. Additionally, “service businesses” are excluded from accessing the 25 percent rate entirely, with 100 percent of their income treated as wages. And while H.R. 1 includes an alternative method to calculate business income based on the amount of depreciable capital a business purchases, this method is currently inadequate in providing real tax relief for many construction firms.
An additional concern with the legislation is not only the absence of a permanent Highway Trust Fund fix but the termination of a key infrastructure financing tool – Private Activity Bonds (PABs). AGC continues to push for infrastructure to be included in the tax bill and in response to the absence of a Highway Trust Fund fix in the House bill, the AGC co-chaired Transportation Construction Coalition (TCC) sent a letter to Ways & Means Chairman Kevin Brady (R-Texas) underscoring the need to include a permanent solution to the Highway Trust Fund’s revenue deficit in tax reform. Further, AGC and other infrastructure stakeholders sent letters to the House Ways & Means Committee and the Senate Finance Committee expressing our disappointment that the House bill terminated the tax exempt status of Private Activity Bonds and requesting that, not only should PABs be maintained in a final tax bill, but they should be enhanced for transportation and water projects and a new category of PABs should be established for public buildings.
In addition, AGC has expressed its concerns with the repeal of the Historic Tax Credit, which would eviscerate the market for the rehabilitation of historic buildings that frequently have higher costs, greater design challenges and weaker market location. That credit has encouraged $131 billion in private construction investment since its inception. AGC will continue to push the House and Senate to include pro-infrastructure provisions as a part of a pro-growth tax reform legislation.
As the Committee has proceeded in the markup, AGC is working with Committee staff to improve the legislation so that it will have a greater benefit for the construction industry. While it is expected that the bill will be passed out of the Ways and Means Committee today, we expect further changes before it comes to the floor of the House of Representatives.
For more information, contact Matthew Turkstra at [email protected] or (202) 547-4733.
Register for the Safety & Health Conference
The 2018 Winter Safety & Health Conference will take place Jan. 10-12, 2018 at the Hilton in Long Beach, California. Join more than 250 industry professionals and participate in the development of regulatory and legislative activity on both a national and local level; assist in the development and creation of new safety training programs and products; and hear the latest initiatives from OSHA and other industry experts.
Full details on the conference, and links to registration and the hotel room block can be found here.
For more information, please contact Kevin Cannon at (703) 837-5410 or [email protected] or Nazia Shah at (703) 837-5409 or [email protected].
Full OSHA Enforcement of the Silica in Construction Standard Begins
On October 23, 2017, the U.S. Occupational Safety and Health Administration (OSHA) began full enforcement of its respirable crystalline silica standard for construction. If your construction company operates under OSHA state-plans in one of 26 states or two territories, it is important that you check to see if your OSHA state-plan agency is following the federal OSHA’s lead with this enforcement policy.
Although AGC remains engaged in litigation against the rule in federal court, a final decision is not expected until 2018, at the earliest. As such, AGC continues to engage the Trump administration.
In the meantime, AGC recognizes that construction companies must abide by the silica regulation, because it is the law. That is why we developed the “Respirable Crystalline Silica in Construction” webpage with a host of resources—sample forms, webinars, flowcharts, FAQs, and more—to help AGC members understand their compliance responsibilities.
Details on Latest OSHA Enforcement Guidance
Two weeks ago, OSHA issued a memorandum to OSHA Regional Administrators providing interim enforcement guidance for Compliance Safety and Health Officers (CSHOs) commencing enforcement on October 23. The memorandum serves as interim enforcement guidance and expires when the standard’s companion compliance directive becomes effective and available to the field.
It is important to note, however, that the memorandum does not provide specific enforcement guidance on all the standard's provisions. In addition, due to the new requirements in 29 CFR 1926.1153, OSHA has revoked their National Emphasis Program on Crystalline Silica which provided guidance to CSHOs for targeting inspections of jobsites with the potential to generate elevated exposures to crystalline silica.
The memorandum outlines inspection guidance for CSHOs for both methods of compliance – Specified Exposure Control Methods (Table 1) and Alternative Exposure Control Methods (Performance and Scheduled Monitoring Options). During an inspection/investigation, CSHOs will:
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Collect personal breathing zone samples when controls for tasks listed in Table 1 are not being fully and properly implemented, or when alternative exposure control methods are not being properly implemented.
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Review the employer’s written silica Exposure Control Plan (ECP) and other relevant programs (Respiratory Protection Program, Hazard Communication Program, etc.). If the employer conducted an exposure assessment, those records will also be reviewed; and
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Interview affected employees, including the competent person, as part of the overall assessment of the employer's implementation of its ECP.
The memorandum also approves the use of sweeping compounds (e.g., non-grit, oil, or waxed-based) as a housekeeping method; clarifies that the 30-day trigger to make medical examinations available to employees now required to wear a respirator for 30 or more days a year applies per employer (exposures with previous employers do not count toward the 30-day total); and outlines how exposure variability will be taken into consideration when comparing the results of employer and CSHO samples.
Although the memorandum does not include specific guidance on required employee information and training (paragraph (i)(2) of the standard), AGC encourages contractors to continue to ensure that employees covered by the standard are trained in accordance with the provisions outlined in the standard.
For more information, please contact Kevin Cannon at (703) 837-5410 or [email protected] or Nazia Shah at (703) 837-5409 or [email protected].
DOL Training on Paid Sick Leave Requirement for Federal Contractors
Register today for the U.S. Department of Labor’s Wage and Hour Division webinar for AGC members on the requirement for federal contractors to provide seven days (56 hours) of paid sick leave annually. The requirement went into effect for contract solicitations issued on or after Jan. 1, 2017.
Remember, this requirement only applies to direct federal contractors (those with prime or subcontracts with or through a federal agency—i.e., Army Corps, Navy, U.S. General Services Administration, and so forth). The requirement DOES NOT apply to prime or subcontracts with or through state departments of transportation. Click here to register or to find more information on the subject.
For more information, please contact Claiborne Guy at [email protected] or (703) 837-5382.
WebEd: New FAR and DFARS Cybersecurity Requirements for Federal Contractors: What You Need to Know
Federal agencies now mandate minimum cyber security requirements for companies that do business with the federal government. Federal agencies now require federal contractors to implement new security control requirements and ensure sensitive federal information remains confidential when stored on any non-federal electronic system. It began in 2016 with FAR 52.204-21 (Basic Safeguarding of Covered Contractor Information Systems); it continues with DFARS 252.204-7012 (Safeguarding Covered Defense Information & Cyber Incident Reporting), which becomes mandatory for all Department of Defense contracts beginning December 31, 2017.
This WebEd will give an overview of the new cyber security requirements for contractors who contract with the Department of Defense and other federal agencies, highlight the FAR and DFARS provisions that give this new rule teeth, and explore the potential impacts of compliance failure for federal contractors. Click here to register. For more information, please contact Jordan Howard at [email protected] or (703) 837-5368.
DOL Appeals Ruling in Overtime Case, Sets Stage for Upcoming Rulemaking
On November 30, the U.S. Department of Labor (DOL) appealed a Texas judge’s decision to toss out an Obama administration rule that would have nearly doubled the Fair Labor Standards Act’s (FLSA) salary threshold for exemption from overtime pay. The Trump administration DOL is defending its authority to create an overtime rule, but not the salary limit set by the Obama administration. The agency filed its notice to appeal the decision to the U.S. Court of Appeals for the Fifth Circuit, and once docketed, the agency — through the Department of Justice — will file a motion to hold the appeal in abeyance while the DOL undertakes further rulemaking to determine what the salary level should be.
The DOL’s Wage and Hour Division (WHD) is currently reviewing submissions following a Request for Information (RFI) it published earlier this summer asking for public input on what changes the agency should propose in a new rulemaking revisiting the salary threshold. AGC submitted comments in response to the RFI, advising WHD to update the salary threshold to a reasonable level that makes sense for today’s workforce. AGC will continue to provide input to the DOL on the impact further changes might have on the construction industry and will notify members of any developments. For more information, please contact Claiborne Guy at [email protected] or (703) 837-5382.
House GOP Unveils Tax Reform Bill
Today, House Republican leaders unveiled their long-awaited tax reform bill, a broad rewrite of the tax code built around lowered individual and business tax rates, as well as an expanded tax base. Republicans have made clear their intent to pass and sign the bill into law before year’s end, noting that the 429 page bill, H.R. 1, is scheduled to be taken up for consideration in the House Ways and Means Committee beginning next week on Nov. 6.
Featuring 120 individual provisions that would add to, augment, or eliminate sections of the current tax code, the Republican tax reform bill—crafted behind closed doors—is already generating intense debate among business leaders. Steve Sandherr, CEO of AGC of America, has already weighed in on the unfolding debate, noting that AGC “will work to ensure that pass-through businesses, including the majority of construction firms, also benefit from tax reform.”
AGC looks forward to providing its members with greater, construction-specific analysis in the coming weeks. In the meantime, you can find the complete bill text here and a section-by-section summary here.
Register for the Safety & Health Conference
Don’t Miss Out! Jan. 10-12, 2018
The 2018 Winter Safety & Health Conference will take place Jan. 10-12, 2018 at the Hilton in Long Beach, California. Join more than 250 industry professionals and participate in the development of regulatory and legislative activity on both a national and local level; assist in the development and creation of new safety training programs and products; and hear the latest initiatives from OSHA and other industry experts.
Full details on the conference, and links to registration and the hotel room block can be found here.
For more information, please contact Kevin Cannon at (703) 837-5410 or [email protected] or Nazia Shah at (703) 837-5409 or [email protected].