Category: Advocacy

Second Chance at Paycheck Protection Program Loan

As the new Senate bill was passed by the House on April 23, 2020, the Paycheck Protection Program (PPP) gained additional emergency funds. MCAA partners and law firm, Lindabury, McCormick, Estabrook & Cooper, P.C., provide an overview of the program application and loan forgiveness requirements to assist MCAA members.

DOL Releases Field Assistance Bulletin 2020-1 & FFCRA Posters for Employers

The DOL Wage and Hour Division has updated their COVID-19 webpage to include Field Assistance Bulletin 2020-1, “Temporary Non-Enforcement Period Applicable to the Families First Coronavirus Response Act (FFCRA),” states that the DOL will not bring enforcement actions against any public or private employer for violations of the leave requirements in the FFCRA for a 30-day period ending on April 17, 2020, provided that the employer has made reasonable, good faith efforts to comply with the Act.

Separately, the Wage and Hour Division have released the posters that employers are required to display outlining the rights of federal employees and non-federal employees under the FFCRA. The Wage and Hour Division has also made available a FAQ addressing issues related to the posters (e.g., where the posters must be displayed, etc.)

3/20 Update: Families First Coronavirus Response Act (HR 6201)

The Families First Coronavirus Response Act (HR 6201) was passed by the Senate and enacted into law with the President’s signature on March 18, 2020. The new law takes effect on April 2, 2020 and will remain effective until December 31, 2020.

For MCAA employers, it has three areas of immediate impact: paid family leave for employees unable to work or telecommute for reasons relating to the COVID-19 health emergency, paid sick leave for employees unable to work or telecommute for reasons relating to the coronavirus emergency – both redeemable in large measure by quarterly tax credits against payroll taxes- and then a requirement of no-cost coronavirus testing by our joint health plans.

The measure is different from the earlier version of HR 6201 and will present significant technical corrections, as well as calling for significant regulatory guidance in the implementation process. Immediately upon enactment, Senate lawmakers called for yet further paid sick and family leave measures to be included in subsequent economic and health crisis emergency measures.

So, this digest supplants any earlier briefing of HR 6201 and should be taken as preliminary, pending further technical corrections, regulatory guidance, and then perhaps even further emergency legislation on these subjects.

HR 6210 – Division C – Emergency Family and Medical Leave Expansion Act

1.1 Eligible Employees & Employers: The new law applies to employers with fewer than 500 employees (for 20 or more weeks of the current or preceding year) and employees who have been employed for at least 30 days with their respective employer.

1.2 Points of Clarification: It will need to be clarified how either criteria operate if the employers choose to exercise the discretion permitted in the law to implement compliance through a multiemployer collective bargaining agreement joint benefit fund context. Similarly, for eligibility of non-bargaining unit employees, the 30-day period of employment also will need to be clarified. It is unclear whether the 30-day employment must be closely coincident with the request for leave or otherwise.

1.3 Reasons for Paid Family Leave: Eligible employees are entitled to paid leave for “qualified need related to a public health emergency” which means the employee is unable to work (including telework) due to the need to take care of a child under the age of 18 whose elementary or secondary school is closed, or place of care or is unavailable due to COVID-19 precautions

1.4 Compensation Required: The law says the first 10 days for which an employee takes leave is to be unpaid. The employee may elect to use any accrued vacation leave, personal leave, medical leave, or sick leave for that initial 10 days. After that, the law requires employers to provide paid leave for each day in the amount of no less than two-thirds of the employee’s regular rate of pay for the regularly scheduled number of hours that period. For employees with fluctuating schedules, the law requires employers to calculate a daily average over the exact preceding 6-month time period.

1.5 Other Requirements: Eligible employees are required to give the employer advanced leave, if foreseeable and practicable. Employers with 25 or more employees are required to reinstate a worker returning from leave to the worker’s former job. If that position is no longer available, employers are required to make reasonable efforts to find a comparable position for that worker over the course of one year. Employers with fewer than 25 employees are required to find a new position for reinstatement if the worker’s position has been eliminated during the leave.

1.6 Multiemployer Collective Bargaining Implementation: The laws says an employer with a Multiemployer bargain relationship, may – consistent with the terms of the CBA – fulfill it obligation under the law based on the paid leave each of its [bargaining unit] employees is entitled to under the law – and that those employees may receive mandated pay from the Multiemployer fund or plan provided for that purpose under the CBA.

1.7 Need for Further Clarification: There are several issues with this aspect of the law – whether the labor law restrictions against direct dealing with union-represented workers are affected by this provision. Also, it’s is unclear whether the reduced pay and regular rate provisions and possible lack of benefits contributions is overcome by the superseding provisions (in other Divisions of HR6201) saying that the law does not preempt the terms of any bargaining agreement pertaining to pay and benefits, perhaps including a provision relating to pay and benefits for hours worked or for hours paid.

HR 6201 – Division E – Emergency Paid Sick Leave Act

2.1 Covered Employers and Eligible Employees: Covered employers are those employing 500 or fewer employees. Eligible employees cover all employees, without the 30-day employment eligibility included in the Division C Family Leave as above. The law specifically says that the paid sick time shall be available for immediate usability by the employee for eligible reasons regardless of how long the employee has been employed.

2.2 Permitted Reasons for Paid Sick Leave: Employees are entitled to paid sick leave to the extent they are unable to work or telecommute because:

  • 2.2.1 The employee is subject to Federal, state or local quarantine or isolation order related to COVID-19;
  • 2.2.2 The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • 2.2.3 The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  • 2.3.4 The employee is caring for an individual who is subject to a quarantine order issued by Federal, state or local authorities, or who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • 2.3.5 The employee is caring for a son or daughter whose school or day care has been closed, or if other child-care is unavailable, due to COVID-19 precautions; and/or
  • 2.3.6 The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Labor and Treasury Departments.

2.3 Duration and Amount of Sick Pay: Covered full-time employees are entitled to 80 hours of paid leave. Part-time employees are entitled to the average number of hours they work over a two-week period. Employers are prohibited from requiring workers to use other paid leave in advance of using the allotted paid sick leave. Unused paid leave eligibility does not carry over from year to year and is not payable on termination of employment by terms of the law.

The amount of pay required by the law under this section is based on varying limits depending on the reason for the leave. If the leave is for the employee’s illness as set out in 2.1.1, 2.1.2, or 2.1.3 above, then the rate of pay is the regular rate of pay, subject to a maximum of $511 per day, with a maximum of $5110 in the aggregate. For paid sick leave relating to others’ illnesses as in 2.2.4, 2.3.5, or 2.3.6 above, the rate of pay required is two-thirds the regular rate, capped at $200 per day, and $2000 in the aggregate.

2.4 Collective Bargaining Implementation: Division E also sets out employer discretion to fulfill its requirements under collective bargaining and benefit fund administration, raising the same ambiguities as above. Similarly, Division E’s rules of construction recite that it does not operate to diminish rights and benefits that the employee is entitled to under a bargaining agreement or other Federal, state or local law, or employer policy.

Both Division C and E – paid family and paid sick leave can be waived by the Department of Labor for specific small business employers with fewer than 50 employees, upon showing that the imposition of the requirements would jeopardize the viability of the business.

In conclusion, the process of defining exactly what is intended and will be required at the end of the legislative and regulatory process on the issues is just beginning. MCAA will keep you up to date on developments as they become clearer.

MCAA PAC Appreciates Your Support

Thank you to everyone who supported the MCAA PAC in 2019. With your support, the MCAA PAC can continue its efforts to gain our members and our industry a fair hearing in federal public policy decisions.

Those supporting the MCAA PAC from January 1, 2019 – December 30, 2019 were:

  • Shannon Baker
  • Robert Beck
  • Robert M. Bolton
  • Michael Brandt
  • Pete Buongiorno
  • Michael Cables
  • Robert Carder
  • Jay Chase
  • Lonzo Coleman
  • Steve Cornelius
  • Dennis Corrigan
  • Matthew Cunningham
  • Anthony D’Ascenzo
  • Jim DeFlavio
  • Fredric J. Dorci
  • Carl M. Evans
  • Robert Felix
  • Chuck Fell
  • Christopher J. Freeman
  • Greg Fuller
  • Michael Gallagher
  • Don Giarratano
  • Richard Gopffarth
  • Jason Gordon
  • Curtis Harbour
  • Tim Healy
  • Brian Helm
  • Brian C. Hughes
  • Robert A. Lake
  • William Lynch
  • Mark Magnuson
  • The Miles Family Revocable Trust
  • Beni Monaco
  • Michael Reed
  • Rebecca A. Rex
  • James R. Reynolds
  • Mark Rogers
  • Nicholas Sapnar
  • Richard Sawhill
  • Bryan Suttles
  • Michael Tobin
  • Tim Vasquez
  • Lawrence Verne
  • David J. Voytko
  • Frank Wall

MCAA PAC appreciates your support.

Learn More and Contribute

MCAA and the UA File Joint Comments on Multiemployer Pension Reform

The UA and MCAA continue to actively press for balanced multiemployer pension reform this year. In a joint letter to the Senate, the two organizations detailed specific elements of compromise to ameliorate the damaging aspects of the recent Grassley/Alexander proposal. The organizations’ goal is to attain consensus compromise that gets multiemployer pension reform back on track for possible enactment this year.

In the joint letter transmitted to the Senate on January 14, 2020, the UA and MCAA outline the key elements of analysis and potential compromise. The letter:

  • Continues strong support for the adoption of new plan designs such as Composite Plans as a key element in restoring options to ground the multiemployer defined benefit system in more sustainable models going forward as a viable option to conversion to defined contribution plans overall, as is prevalent now in the single employer system.
  • Backs the PBGC partition elements of the Grassley/Alexander proposal generally, with some substantive and procedural modifications.
  • Calls for substantial moderation of the proposed PBGC premium increases.
  • Demonstrates the imperative need to moderate the crippling imposition of significantly detrimental mandated lower asset return assumptions in the near term.
  • Backs the proposed new Zone status provisions, with some needed clarifications.

The joint letter also transmits the two latest UA/MCAA/Horizon Actuarial Services analyses of pension reform impact on UA/MCAA plans based on the comprehensive data in the MCAA/Horizon database of all multiemployer plans nationwide.

Joint Letter

Analysis of Grassley/Alexander Proposal

Multiemployer Pension Plan Reform Policy Issues

National Issues Conference Registration Is Open

Our industry’s legislative agenda is packed with critical legislation and regulations that will affect your company’s future. The 2020 National Issues Conference provides updates on these issues and a chance to share your concerns about them with your House and Senate representatives. Join us from May 5 – 7, 2020 in Washington, D.C. Your participation is essential to gaining credible outcomes for our industry!

Study Reinforces the Value of Joint Apprenticeship Programs

A new study on Illinois apprenticeship programs shows that apprenticeships are the bachelor’s degrees of the construction industry. Joint labor-management programs, in particular, provide a more effective and inclusive offering than unilateral (open shop) programs in key areas such as training hours, graduation rates, and competitive earnings that rival the performance of Illinois’ four-year universities.

The study, titled The Apprenticeship Alternative Enrollment, Completion Rates, and Earnings in Registered Apprenticeship Programs in Illinois, provides 5 key takeaways from analyzing 17 years of apprenticeship data in Illinois:

1) Joint labor-management programs enrolled 97% of all construction apprentices in Illinois.

2) Joint construction programs require 27% more hours of training (7,306 hours) than the minimum requirements to earn a bachelor’s degree from the University of Illinois (5,760 hours).

3) Joint construction programs have a completion rate of 54%, on par with Illinois’ public universities (61%), higher than for-profit institutions (43%), and significantly higher than employer-only programs (31%). The ABC completion rate in Illinois is a dismal 16%.

4) The racial diversity of graduates from joint construction programs is similar to Illinois’ public universities, and joint construction programs are both more diverse and have higher completion rates among people of color, women, and veterans than employer-only programs.

5) Despite a higher likelihood of suffering an unemployment spell, a union journeyworker earns about as much over a career ($2.4 million) as a worker with a bachelor’s degree ($2.5 million after student debt).

Read the Study

Year-End Progress on the Legislative Front

The Mineworkers national pension and health plans were provided badly need Federal fiscal support in the year-end spending measure allowing use of the abandoned mine reclamation funds to shore up both the Mineworker national pension and health funds. This long-overdue measure will help save national mineworker pension benefits and will take the fiscal pressure of looming insolvency of that plan off the Pension Benefit Guaranty Corporation’s (PBGC) potential liability books. This measure also provides a path forward for Federal support for broader multiemployer pension reform – an essential prerequisite for effective reforms to remedy the 140 or so critical and declining plans without irredeemably crippling the vast majority of otherwise healthy plans by transferring the fiscal liability for the remedy to healthy plans.

Also, health plans got some good news with the long-awaited repeal of the Cadillac tax on health plans and the 2021 repeal of the health insurer tax that was levied on our fully insured health plans.

Analysis of Grassley/Alexander [Pension Reform] Proposal Impacts Now Available

MCAA, in conjunction with the UA and Horizon Actuarial Services, has produced the UA/MCAA Analysis of the Cost Impact of the Grassley/Alexander [Pension Reform] Proposal. This latest joint UA/MCAA analysis is being used in lobbying meetings on the Hill to prod Congress to craft a more acceptable multiemployer reform proposal that focuses on remedies for critical and declining plans without levying crippling fiscal and funding restrictions on otherwise healthy plans. MCAA and the overall NCCMP Coalition are working hard to prod Congress to come up with a more fair and balanced reform that does no harm to healthy plans early in the next session of Congress. Initial indications are that the reforms will be moderated significantly.

The latest UA/MCAA analysis is added to the Multiemployer Pension Plan Reform Policy Issues analysis that Horizon did for the UA and MCAA earlier this year. That analysis shows the impact of reduced benefits and increased costs added to plans in the wake of Congress’s delay in enacting reforms.

Analysis of Grassley/Alexander Proposal

Multiemployer Pension Plan Reform Policy Issues

MCAA Voices Support for the Stop Unfair Bid Shopping Act of 2019

In a November 26, 2019 letter to Congressman Scott Peters (D-CA-52), MCAA Government Affairs Committee Chair Jim Gaffney voiced MCAA’s support for the Stop Unfair Bid Shopping Act of 2019 (SUBS Act, HR 5247). The letter commends the Congressman for introducing the latest version of the good-government reform to the direct Federal construction contract low-bid, price-only selection procedures.

The SUBS Act would require prime contractors on awards of $1.5 million or more to list major first-tier subcontractors of $100,000 or more. Post-award substitutions of listed subcontractors that amount to deductions of 10% or more would result in a deductive change to the prime contract for amounts above the substitution threshold.

This is the latest version of the perennial sub bid listing measure that once passed the Congress and suffered a Presidential veto many decades ago. It also prevailed in agency procurement from 1963 to 1983 but was rescinded at that point based on outdated procurement practices.

Congressman Peters’ SUBS Act has been referred to the House Oversight and Government Reform Committee, which is now chaired by New York Congresswoman Carolyn Maloney (D-NY-12), who has been a sponsor of subcontractor bid listing for several Congresses.

MCAA will continue to monitor the act’s progress and will keep you updated.

READ THE LETTER

Multiemployer Pension Rescue Proposal Released

Senate Finance Committee Chairman Chuck Grassley (R-IA) and Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-TN) released their comprehensive multiemployer pension reform proposal on November 20, 2019. Summarized in a white paper and technical explanation entitled “Multiemployer Pension Recapitalization and Reform Plan” (MPRRP). The proposal is a comprehensive and complicated re-write of the multiemployer plan rules as compared with current law and reflects a yeoman’s job of Congressional staff over recent years working diligently to get this latest reform done right from their perspectives. Still, that ultimate judgment in the near term will depend on intense negotiations among the various stakeholders on a final proposal that may be okayed by Congressional leadership for enactment on the year-end spending measure in late December – if equitable compromises on both sides of the aisle can be reached on the crucial principal issues.

1) Plans eligible for PBGC partition – Significantly increased PBGC premium levies on all plans, combined perhaps with some as-yet-to-be-defined amount of government appropriations support, will be dedicated to finance and administer a robust PBGC partition program, to pay some of the benefits of “orphans” (participants whose employers no longer contribute to the plans) in qualifying critical and declining plans that meet specific criteria, along with three qualifying named exceptional plans: Teamsters Central States, Road Carrier Local 707, and the United Mineworkers National plan. As proposed, partition payments from PBGC are greater for Central States and Road Local 707 as compared with other eligible partitioned plans. The PBGC maximum payment guaranty would be increased from $12,870 per year, to approximately $20,000 annually.

2) PBGC premium increases – The PBGC premium increases proposed are comprised of the following elements:

  • Flat rate increase – The flat rate per participant annual per capita payment would increase, rising from the current $29 per person per year to $80 per person per year (the same as the single employer plan premium now).
  • New variable rate premiums – A new variable rate premium is added, amounting to 1% of a plan’s current unfunded liability divided by the number of participants, capped at $250 per person per year.
  • New stakeholder retiree, union, and participating employer monthly “co-pays” – The proposal adds new “co-payments” on unions and employers amounting to $2.50 per participant per month, and on retiree benefits levied (collected by monthly plan withholding on a sliding scale based on plan funding status), ranging from a low of 3% for retirees in critical plans, to up to 10% for retirees in partitioned plans.

3) Funding rules – mandated assumed discount rate valuation of liabilities – The proposal requires that the assumed discount rate used by actuaries to project plan liabilities be limited to the lesser of either 6% or the 24-month average third-segment of the 25-year corporate bond yield curve, plus 2%. Experts comment that in most instances the lesser rate will be 6%. This rate is to be phased in over five years, beginning in Plan Year 2020. Changes in plans’ funding status due solely to the decreased interest rate assumption may amortized over 30 years.

4) Changes to withdrawal liability rules – The construction industry basic withdrawal liability rules and exemption remain intact. However, the methods for measuring maximum annual payments for any liability incurred are changed materially. The 10-year look back for maximum annual payment calculation is extend to 20 years, and the period of payment of liability is gauged by plan funding status. Plans are required to provide withdrawal liability estimates to all contributing employers free of charge every three years.

There are a myriad of other significant changes in the MPRRP proposal, including zone status rule changes. MCAA is analyzing the changes in conjunction with our consultants at Horizon Actuarial Services and Groom Law Group, along with our stakeholder partners at the UA.

Other stakeholder coalitions, including the NCCMP and the Construction Employers of America (CEA), are engaged in similar in-depth assessments and analysis in preparation for the key negotiation period between now and Congressional recess in late December.

All recognize that successful reforms this year are key, as a general election year is usually not conducive to delicate bipartisan compromises on crucial national issues. However, it also is widely recognized that significant equitable compromises in the initial proposal are essential to avoid further destabilizing the entire multiemployer system to provide partition for only a relatively small yet very significant subset of the whole.

MCAA’s leadership is taking this very important matter under advisement and will keep you apprised of developments along the way to whatever resolution may be achieved by the end of the year.

White Paper Summary

Technical Explanation

National Service and Maintenance Agreement Negotiations to Begin Spring 2020

The National Service and Maintenance Agreement continues to be an excellent tool used by  HVACR and plumbing service contractors around the country to grow market share and remain competitive in this highly competitive market.  The current National Agreement is effective through July 31, 2020.  The MSCA Labor Committee will be discussing potential changes or modifications with the UA later this year.  Although we anticipate very few changes, we would appreciate your input or recommendations on terms and conditions which you feel may be helpful in expanding your service business.  Please send all comments to bdolim@mcaa.org  by December 6, 2019.

ARCA/MCA Continues Unanimous Board Support of MCAA PAC

For 15 years running, ARCA/MCA’s Board has unanimously contributed to MCAA’s Political Action Committee. This ongoing commitment, and commitments from several other MCA local affiliate Boards and other groups across the country, ensure that MCAA’s Government Affairs Committee has sufficient resources to advance key MCAA member interests on Capitol Hill.

Find Out What’s New with Our Labor Partners at MCAA2020

In August 2016, Mark McManus was unanimously elected as General President at the UA’s 39th General Convention and on November 10, 2016, he assumed his new position leading the nation’s most progressive and influential trade union. Mark McManus has had a distinguished career in support of our nation’s hard-working men and women and has been unwavering in his commitment to a strong and mutually beneficial partnership between labor and management. See everything we have planned for MCAA2020 on our convention website.

UA-MCAA Conference Highlights Benefits of Labor/Management Partnership

Over 1,400 United Association and MCAA representatives gathered this week for the 2019 UA-MCAA Labor Relations Conference: Succeeding Together to openly discuss key issues affecting the future of both memberships, including assignment of trade jurisdiction, utilization of apprentices, the impact of benefit packages on contractors’ competitiveness, the importance of growing the service industry and the need for greater diversity in the field and office. In his opening remarks General President McManus established the tone for the conference when he stated three prerequisites to a meaningful and lasting labor/management partnership: Open and Continuous Communication; No Surprises; and Trust.

UA-MCAA Labor Relations Conference Convenes in Las Vegas

The 2019 UA-MCAA Labor Relations Conference: Succeeding Together will convene October 29 – 30, 2019, at The Mirage in Las Vegas, Nevada. The conference, jointly hosted by the United Association (UA) and MCAA, will feature panel discussions focused on topics such as growing apprenticeships, expansion of service, and attracting tomorrow’s diverse workforce.

Succeed Together at the UA-MCAA Labor Relations Conference

From discussions on apprenticeship best practices, diversity, and service to an MCAA-sponsored session that lets apprentices understand the management side of the business, the 2019 UA-MCAA Labor Relations Conference: Succeeding Together will enhance your understanding of both UA and MCAA viewpoints. With mutual understanding, we can work toward continued work for UA members and profitable jobs for MCAA contractors, and that’s a win for everyone!