Sets Annual Salary Threshold at $35,308

On March 13, the U. S. Department of Labor’s (DOL) Wage and Hour Division (WHD) announced a Notice of Proposed Rulemaking (NPRM) updating the Fair Labor Standards Act (FLSA) overtime regulations. This new proposal would update the salary threshold using current wage data, projected to January 1, 2020. The result would boost the standard salary threshold for exempt employees from $455 to $679 per week (equivalent to $35,308 per year). The NPRM comes following a 2017 Request for Information (RFI) and is in line with AGC’s formal recommendations.

Specifically, the NPRM includes:

• • The proposal increases the minimum salary required for an employee to qualify for exemption from the currently-enforced level of $455 to $679 per week (equivalent to $35,308 per year);

• • The proposal increases the total annual compensation requirement for “highly compensated employees” (HCE) from the currently-enforced level of $100,000 to $147,414 per year;

• • A commitment to periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking;

• • Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level;

• • No changes overtime protections for:
    
    • • Laborers including: non-management production-line employees
    
    
    • Non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers;

• • No changes to the job duties test; and

• No automatic adjustments to the salary threshold.

AGC will continue to provide input to the DOL on the impact this update might have on the construction industry and will notify members of any developments.

For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.

Would Help Retail, Restaurant Renovation Projects

On March 14, a bipartisan group of senators--led by Sens. Pat Toomey (R-PA) and Doug Jones (D-AL)— introduced AGC-supported legislation to correct a drafting error from the Tax Cuts and Jobs Act (TCJA, the 2017 tax reform law), that inadvertently extended the depreciation schedule for interior improvements to commercial properties from 15 years to 39 years. AGC has heard from many contractors and service providers that this error is materially impacting construction projects across the country, forcing building owners to delay or reconsider projects.
Prior to passage of TCJA, any interior improvements to commercial properties (designated in the tax code as “restaurant, retail and leasehold improvements”) could be depreciated over 15 years.  The TCJA included a provision that sought to simplify this section of the code by consolidating multiple classes of infrastructure eligible for the 15-year depreciation schedule into a new definition, called “qualified improvement property” or QIP.

Additionally, under this section of the Internal Revenue Code, QIP was intended to be eligible for temporary 100 percent bonus depreciation, thus allowing these commercial improvements to be expensed in one year until the temporary full expensing expires in 2023.  However, due to a drafting error, the TCJA inadvertently changed QIP’s depreciation schedule from 15 years to 39 years.  This is a substantial change, significantly affects cost-recovery and must be addressed to help many of these construction improvement projects get back on track.

While a drafting error should be relatively easy to fix legislatively, unrelated partisan interests have thus far prevented passage of all but a few “technical corrections” from the TCJA.  Securing bipartisan support for this bill is a significant step towards fixing this unintended problem.

For more information, contact Matt Turkstra at matthew.turkstra@agc.org. 

Includes Infrastructure Plan Fact Sheet

On March 11, the White House Office of Management and Budget (OMB) released the president’s fiscal year (FY) 2020 top-line budget request. In tandem with this request, OMB released an infrastructure fact sheet calling for long-term surface transportation reauthorization, solvency of the highway trust fund, and an additional $200 billion investment for other infrastructure priorities. AGC will further analyze the impacts of the FY2020 budget on the construction industry upon the March 18 release of the full budget request.

For more information, contact Sean O’Neill at oneills@agc.org. 

Headlines Highway and Transportation Session on April 2

Federal Highway Administration (FHWA) Deputy (Acting) Administrator Brandye Hendrickson will headline the Highway and Transportation Contractors Division Session (April 2 at 10:30 am) at AGC’s 100th Annual Convention April 1-4, 2019 in Denver, Colorado. Ms. Hendrickson has headed FHWA for the past two years after having built a reputation as a strong transportation leader while Commissioner of the Indiana DOT. For more information on the AGC convention, including registration, follow this link.

For more information, contact Brian Deery at deeryb@agc.org. 

AGC Testifies before House Transportation & Infrastructure Committee

On March 13, Al Stanley—a current contractor member of the AGC of America Board of Directors from the Alabama AGC—testified before the House Transportation and Infrastructure Subcommittee on Highways and Transit about the much-needed funding necessary to address the nation’s transportation and infrastructure needs, which especially includes the Highway Trust Fund’s revenue shortfall. Chairwoman Eleanor Holmes Norton (D-D.C.) called the hearing as the House begins to debate an infrastructure package and the need to reauthorize the federal aid-highway and transit programs.

Stanley pointed out that not only is funding needed to address current poor road conditions, but also to advance transportation to the next level by modernizing the system. Stanley also addressed issues that slow construction of transportation facilities, including delays caused by railroad interfaces and relocating utilities. Stanley said that now is the time to act with bipartisan support in Congress and from the Administration.

For more information, contact Brian Deery at deeryb@agc.org. 

On March 13, Rep. Lloyd Smucker (R-PA) introduced AGC-supported legislation, H.R. 1740, in the House that would help fill the visa gap for year-round construction workers, among others. Current law allows legal immigration for high tech, agriculture and seasonal workers. However, there is no dedicated visa for typical construction occupations. AGC views the legislation as a complement to its efforts to help address the industry’s worker shortages as well as a critical ingredient for immigration reform.

The bill creates a market-driven visa program that would match employers with potential immigrant laborers by creating temporary visas for guest workers if local market conditions warrant and U.S. workers cannot be found. The program would have an annual cap and would fluctuate based on demand, with a number of wage and labor protections to further protect American workers.

For more information, contact Jim Young at youngj@agc.org. 

On Mar. 5, AGC met with leaders of the Department of State’s Bureau of Overseas Buildings Operations (OBO).  AGC brought in current and prospective contractors for a two-hour meeting to address the challenges OBO and the construction industry face in building embassies.  Among the topics discussed were OBO’s Embassy After Next program, formal partnering, and difficult contract requirements.  AGC and OBO pledged to continue to work to ensure the delivery of high-quality facilities and infrastructure the American foreign service deserves.

For more information, contact jordan.howard@agc.org or (703) 837-5368.

AGC urges that Composite Plans Must Be Part of the Solution

On Mar. 7, the House Committee on Education and Labor committee held a hearing focused on the cost of inaction of multiemployer pension crisis and why Congress must address it. Ahead of the hearing, AGC—along with other industry stakeholders—reiterated its commitment to the authorization of composite plans in any multiemployer pension reform effort.  In addition, AGC will continue to advocate against any changes that destabilize plans or make providing retirements benefits to workers more expensive.

The hearing follows an earlier hearing held this year by the House Ways and Means Committee and the introduction of the Butch Lewis Act. That bill, first introduced in 2017, would offer loans to troubled plans through a new agency at the Department of Treasury, called the Pension Rehabilitation Authority. While the proposal was well-vetted during the previous Congress and by the Joint Select Committee on Solvency of Multiemployer Pension Plans, it appears as though congressional leaders are shifting their interest from a loan proposal to one that provides assistance to troubled plans by giving the Pension Benefit Guaranty Corporation (PBGC) greater partitioning authority.

For more information, contact Jim Young at youngj@agc.org or (202) 547-0133.

Listen to ConstructorCast Podcast for all the Important Details

As of Feb. 7, the U.S. Occupational Safety and Health Administration (OSHA) requires all contractors to evaluate crane operators under the new final rule regulating crane operator qualification and evaluation. AGC of America spent nearly 16 years working with OSHA under three different presidential administrations to make this rule less burdensome and provide the greatest positive safety impact possible. The latest episode of ConstructorCast covers all the important details you need to know to ensure your firm is in compliance as the requirements take full effect and beyond. Download or stream the episode here.

Our mission to help AGC members does not stop when the ink dries on regulations impacting your construction company. We also want to help ensure you have the information necessary to comply. That is why we created valuable AGC educational resources. Specifically, AGC created a summary of crane operator and evaluation rule operator and evaluation rule and a sample form for crane operator evaluation. These materials represent the hard work of many AGC member safety professionals and AGC staff who want to ensure that this industry is not only safer, but also in compliance with the law. And, more resources will be coming soon.

For more information, contact Kevin Cannon at (703) 837-5410 or cannonk@agc.org.

Ranking T&I Republican Favors VMT

Chairman of the House Transportation & Infrastructure Committee, Peter DeFazio (D-Ore.) noted his intent to introduce legislation to provide a short-term fix for the Highway Trust Fund.  At a Mar. 7 House Ways and Means Committee hearing, he laid out why his proposal—which would authorize 30-year Treasury bonds and whose proceeds would be deposited in the Highway Trust Fund and repaid by increasing the fuel taxes by no more than 1.5 cents per year—makes the most sense from a practical and political standpoint. Ranking Member Sam Graves (R-Mo.) also testified on his interest in focusing on a vehicle miles traveled fee as a long-term solution, while acknowledging something needs to be done in the short-term. AGC will continue to work with leaders in Congress and our industry stakeholders to work on efforts to address the funding crisis facing the Highway Trust Fund.

The heads of the U.S. Chamber of Commerce, the AFL-CIO and the American Trucking Associations also testified at the hearing. Each organization called for an immediate increase in federal motor fuels taxes to fill the projected $18 billion gap soon to face the High Trust Fund.

For more information, contact Sean O’Neill at oneills@agc.org or (202) 547-8892.