MCAA and the UA have partnered with the Society of American Military Engineers (SAME) in a new alliance focused on building our national security by contributing to America’s infrastructure development. The groups will collaborate on workforce development, educating influencers and decision makers, and education and training.
In response to a request from the MCAA Board of Directors following discussion of the stalled legislative proposal allowing new Composite Plan options, Horizon Actuarial Services provided an in-depth analysis of Alternative Retirement Plan Designs. The report, authored by actuaries Cary Franklin and Jonathan Feldman, offers a general risk-factor analysis for plan trustees to consider in any more in-depth analysis of particular plan circumstances and plan design options. It focuses on six areas: 1) traditional defined benefit (DB) plans; 2) variable DB plans; 3) cash balance plans; 4) money purchase plans; 5) profit sharing plans; and, 6) proposed new composite plans (not yet enacted into law). Cary Franklin will be making a presentation on this analysis at the National Issues Conference.
MCAA and the United Association (UA) filed a joint brief in the Velox Express, Inc. case (Case No. 15-CA-184006) pending before the National Labor Relations Board (NLRB). The organizations voiced support for an NLRB Administrative Law Judge’s (ALJ) opinion that worker misclassification itself is an independent violation of workers’ rights under the National Labor Relations Act. The act includes provisions barring employer interference, restraints or coercion with respect to a worker’s right to engage in protected concerted activity.
In the case at issue, Velox Express classified couriers who pick up and deliver medical diagnostic test samples from physician sites and testing labs as independent contractors rather than as employees.
The ALJ noted that the NLRA contains an exception allowing for exclusion of legitimate independent contractors from protected “employee” status. The ALJ also stressed that the Supreme Court has directed that such exceptions are not to be expansively interpreted so as not to deprive legitimate employees of their rights under the NLRA.
Applying the NLRB’s multifactor analysis to the facts of the courier’s work with the company, the ALJ held that the balance of the factors swayed the judgment toward finding misclassification of the worker as an independent contractor rather than as an employee.
The ALJ went on to determine that, “By misclassifying its drivers, Velox restrained and interfered with their ability to engage in protected activity by effectively telling them that they are not protected by Section 7 and thus could be disciplined or discharged for trying to form, join or assist a union or act together with other employees for their benefit and protection.”
Expressing full support for the ALJ’s holding, the MCAA/UA brief, prepared by the O’Donohue law firm, concluded that “. . . a determination by the Board that improper misclassification of employees as independent contractors constitutes a stand-alone Section 8(a)(1) violation does not in any way restrict or interfere with an employer’s legitimate use of entities that are actual, bona fide [independent] contractors.”
Amicus briefs supporting the employer’s appeal of the ALJ decision argue that misclassification alone cannot be the basis for an independent violation of protected rights. They state that in all cases, the misclassification charge must be joined with some other related unfair labor practice charge.
MCAA will monitor developments on the matter and report on the final NLRB determination.
The construction industry’s multiemployer defined benefit pension system is showing signs of resilience, according to the recently revised Inventory of Construction Industry Pension Plans, MCAA and Horizon Actuarial Services’ groundbreaking analysis of historical trends in pension plans’ key operating data. Roughly 75% of all construction industry multiemployer plans are projected to be fully funded within 15 years according to the inventory, which is based on the annual reports (Form 5500) filed with the Labor and Treasury Departments for Plan Years 2006 through 2015.
Horizon Actuarial’s Cary Franklin, principal author of the report, notes that “plan resilience is the hallmark of the jointly sponsored construction industry plans,” which represent some 55% of all multiemployer plans nationally. Franklin also noted that the new data shows improved median plan funding status, reaching 82% in 2015, and modest growth in active participants in construction plans in years after 2011, all “modestly positive trends.”
“The 10-year data trends reflect the sound work plan trustees and bargaining parties continue to do to make sure the plan participants have good, hard-earned lifetime benefits they can rely on,” Franklin said, concluding that “labor and management plan trustees would benefit further if Congress would enact new options for plans to consider to help keep the system sustainable on a long-term basis.”
MCAA President Mike Brandt noted that, “Cary Franklin and his associates at Horizon have done a remarkable job – again – in producing this one-of-a-kind MCAA industry service and analysis, which is designed to help labor and management trustees benchmark their plan performance, help MCAA employers meet their year-end accounting disclosure requirements, and just as importantly – to guide national policy makers in enacting sound public policy decisions to allow plan trustees new options to improve the sustainability of the plans for the benefit of both employees and their families and their employers.”
“While the Fifth Edition of the Inventory shows some signs of steady improvement given the market rebounds since the 2008 Great Recession,” Brandt said, he cautioned that “there still is much underlying data in the Inventory underscoring the imperative need for deliberate legislative action – enacting the GROW Act H.R. 4997 – to give plan trustees more options and flexibility to keep these valuable benefits on a stronger and sustainable basis going into the indefinite future.”
All members of the MCA of Detroit’s Board of Directors recently contributed to the MCAA PAC, continuing a long-held tradition of unanimous Board support. The boards of the MCA of Connecticut, M&SCA of Eastern Pennsylvania, MCA of Houston, ARCA/MCA, CPMCA, New England MCA and MCA of South Florida also contributed to the MCAA PAC recently, as have the members of many Peer Groups. This support enables the MCAA PAC to gain MCAA members and our industry a fair hearing in federal public policy decisions.
Looking for the light at the end of the tax reform tunnel? Anthony Nitti will give you the “Nitti-Gritty” on the new tax reform act. His insights and analyses will show you how the changes in the tax law affect your company and your customers.
Some of the topics to be covered include:
- The impact of the new tax law on your type of entity (C-Corp, S-Corp, partnership, or sole proprietor)
- Changes to the rules for cash vs. accrual accounting
- Bonus depreciation vs. Section 179 expensing of business assets
- Changes in the deductibility of entertainment costs
Anthony “Tony” Nitti, CPA, is a Tax Partner in the Aspen, CO office of WithumSmith+Brown’s National Tax Service Group. His practice primarily focuses on corporate and partnership tax planning. He’s well known in the industry as a writer for both the firm’s blog and for Forbes.
This session will be hosted and moderated by MCAA Management Methods Committee Chairman Robert Lindbloom of Apollo Mechanical Contractors. He will also unveil the next generation of MCAA’s Management Methods Manual.
The long-awaited multiemployer pension reform legislation championed by MCAA, the UA and virtually the entire organized construction community has been introduced in the House by Representative Dr. Phil Roe (R-TN). The legislation, H.R. 4997, the Giving Retirement Options to Workers Act of 2018 (GROW Act) is now pending in the House Education and Workforce Committee, and has been referred to the House Ways and Means Committee as well.
Dr. Roe was formerly the Chair of the House Education and Workforce Committee Pension Subcommittee, and was instrumental in pension reform issues over the past many years.
The Composite Plan measure has had a tortuous history over the past several years. It was originally one of the three parts of the NCCMP/MCAA/industry consensus measure called Solutions Not Bailouts, a legislative proposal that was enacted in December 2014 as the Kline-Miller Multiemployer Pension Reform Act (MPRA). The Composite Plan part of the proposal was held back from the law in 2014 because of committee jurisdictional conflicts, with a Congressional leadership commitment (at that time) for relatively quick enactment in 2015. But, circumstances changed in a variety of ways, and MCAA has been working doggedly since then to redeem that promise of action on the basic Composite Plan reform.
The Composite Plan is an option for trustees to consider (not a mandate) to convert their traditional defined benefit plan to the new Composite Plan model. If the trustees choose to convert, the old plan – the Legacy Plan – is frozen, and further benefits accruals under that plan are stopped. New benefits under the Composite plan are accrued going forward upon the conversion, with required minimum contributions being paid back to the legacy plan to remedy any underfunding as called for the 2006 Pension Protection Act’s Red, Yellow and Green one funding rules.
The new Composite Plan must be overfunded at 120% at a minimum, and annual and 15-year funding projections and adjustments to meet the overfunding standards are called for to forestall deep funding problems before they develop. The substantially reduced risk of underfunding is further ameliorated by a set of graduated benefits adjustment options in cases of projected shortfalls (increased contributions, cuts in future accruals, adjustments of ancillary benefits, and then core benefits suspensions only as a last resort) much along the lines of the Pension Protection Act and the MPRA law to forestall the development of serious funding shortfalls as are possible under the traditional plan funding model.
This new, equitable risk sharing model is designed to further ensure plan sustainability by stemming the loss of contributing employers from the traditional plans, and allowing for organizing of new employers into the new risk sharing model plan. This new plan model is predicted to be much more attractive to plan participants as it provides the best features of a traditional defined benefit plan – lifetime benefits, shared longevity risk, professional asset management and safeguards against early withdrawals. For contributing employers, the risk of overall plan underfunding and consequent individual employer withdrawal liability is substantially removed over time – stanching the retreat of employers from traditional plans and allowing new employer entrants without risk of uncontrollable contingent funding liability.
Pension Benefit Guaranty Corp (PBGC) insurance premiums are still payable on legacy plan benefits; whereas new benefit accruals under the Composite Plan are not PBGC insured. However, the annual projections and mandatory overfunding safeguards more than substitute for that premium security , and are a better guaranty against ultimate plan insolvency than was provided under the traditional model, where the possibility of falling into critical and declining funding status with a diminished PBGC payment are becoming ever more prevalent possibilities.
MCAA is working to line up co-sponsors for the GROW Act on both sides of the aisle, and is striving to gain enactment in the waning days of the 115th Congress – a heavy lift for sure – but our ardent goal. MCAA continues to lobby Administration officials at the Labor, Treasury and Commerce Departments and White House policy councils to gain their support for enactment of Composite Plan legislation, hopefully this year.
MCAA has long taken the position that Composite Plan reforms are an essential and separate reform apart from various proposals to provide additional resources to shore up critical and declining plans in other industries that themselves immediately threaten the long-term solvency of the PBGC. MCAA also is working with select MCAA affiliates to reach out to specific lawmakers on key committees to press for passage of reform this year.
Go to: www.saveourfutures.com for further details on the GROW Act and a link to Congressional outreach.
Union representation in the construction industry ticked up slightly in 2017, tallying 14.7%
(1.156 million among the 7.844 million total employees) according to the Bureau of Labor Statistics. The findings are outlined in Union Members 2017, USDL Release 18-0080, Jan. 19, 2018.
This compares with a 14.6% representation rate in 2016, with 1.095 million union represented workers among 7.488 million total employees. The data show a gain of some 356,000 in overall industry employment in 2017 as compared with a year earlier.
In all private sector employment, union representation remained static in 2017, totaling 7.3%, the same as in 2016. Some 8.4 million employees had union representation among 116.9 million employees.
Union representation is highest among public sector employees, at 37.9% in 2017 (7.9 million of 20.9 million employees), the same rate logged in 2016.
Congress is back in session! This is your chance to get in touch with your House representative or Senators about the industry and business issues that concern you. If this is your first time advocating for a cause, a newly revised Management Methods Bulletin is available to show you the ropes.
Business and Politics has been updated to provide you with advice, tools and information about the federal legislative process to help you be effective in presenting and discussing industry issues with your House and Senate representatives. From sending electronic messages to arranging personal meetings, the bulletin suggests how, when and where to communicate your concerns about legislation and/or regulations to your elected Members. Useful tools on MCAA’s website under the Advocacy menu, the MCAA PAC and the National Issues Conference direct your path to the legislators you need to reach. And, helpful information included in the bulletin will guide you through the bill making process.
The advocacy menu on our website also has a direct link to Congress.gov, where you can research current legislation and follow its progress through Congress.
Download your copy and start contacting your Congressional representatives today.
During the negotiation process of the Tax Cuts and Jobs Act at the end of 2017, the tax credit for R&D spending was temporarily removed. Fortunately, MCAA and others worked hard to ensure that the final bill re-inserted the language for the Research Tax Credit (“RTC”) and made changes that potentially increase the credit by more than 20%. With the RTC in place, contractors are able to continue to claim tax credits for qualifying BIM and design work. Unfortunately, many mechanical and plumbing contractors are unaware that they can even claim part of their design and bid work for these tax credits.
This article is intended to offer an overview of the Research Tax Credit for mechanical contracting personnel presented in general non-tax terms, wherever possible. The credit is, however, “tax based”, and as such, the inclusion of all of the applicable rules for every situation is not possible in a brief discussion.
In order to qualify for the research tax credit, activities must pass several tests. Although these tests are fairly specific, “qualifying activities” are generally much broader than many people think. When contractors hear the term “research” they often associate the term with scientists wearing white lab coats who are mixing chemicals in beakers. However, the Internal Revenue Code definition of research, as defined under IRC §41, is much broader than this traditional definition. As a result, many contractors may typically associate a large portion of their research activities as “routine” or “ordinary”, when in fact many of these activities might qualify for the Research Tax Credit.
To successfully build a structure, there may be experimentation or an iterative process on technical design issues and the installation process to properly build it. Although it might seem complicated if you are not claiming these credits, many contractors have been doing so for years. Before you begin, it is recommended that MCAA members contact their tax professionals to ensure that they are properly claiming the appropriate costs and activities under the RTC.
To begin, the Internal Revenue Code states that the activities “must be intended to discover information to eliminate technical uncertainty concerning the capability or method for developing or improving a product or process, or the appropriateness of the product design”. The Code also requires a “process of experimentation” involving the evaluation of alternatives, confirmation of hypotheses through trial and error, testing and/or modeling (this can include iterative steps in evaluating design alternatives, alpha/beta tests, pilot trials, scale-up testing, marketing/field tests directly associated with the R&D efforts, qualification Trials, etc.). Finally, wages, supplies, and contracts associated with qualifying activities qualify. The expenditures can also be either capital or expensed items.
Broadly, this includes any activity where there is some technical uncertainty involved in the development or improvement efforts- i.e., is there a technical problem that needs to be solved before you can effectively launch/implement this equipment design, software, product, process, prototype, etc.? Personnel who are directly engaged in resolving the technical issues will qualify and those individuals who have a support role will also qualify (i.e., performing alpha/beta/unit testing, collecting data or writing programs to collect data, supervision, technical project management, etc.)
Uncertainty exists if the information available to the contractor does not establish the capability or method for developing or improving the product/process or the appropriate design of the product/process. The required level of uncertainty may be established in instances where your work requires the resolution of technical issues when either designing the mechanical and plumbing system or working from a set of drawings that are incomplete or need modification to function.
The definition of activities that qualify for the credit is fairly broad and the driver for the effort can be to produce a new, better or more competitive product/process, to increase reliability/quality, to increase general product/process safety, to respond to new federal/state requirements, to reduce costs or increase speed/efficiency, etc. Furthermore, the success or the degree of technological advancement is not a factor.
Below is a representative sample of activities a taxpayer would typically perform, which often times are misclassified as “routine” or “non R&D” related:
- Evolutionary advancements to the functionality, performance, reliability or quality of an existing product (Change orders for process improvement);
- Development of prototypes or models to prove out conceptual ideas (Including BIM);
- Experimentation to verify if an existing construction technique or process can support a new product with differing characteristics (Testing point loads);
- Experimentation to verify if a new or existing construction technique or process can be implemented in a new or different geographic region, new environment, or different industry/application;
- The design and development of custom equipment, tooling, molds and/or dies;
- The development of microcode used within machinery or robotics;
- The redesign of an existing construction or building process to improve efficiencies, increase safety or reduce operating expense;
- Testing to prove out the use of new materials in existing products;
- Plant and/or Process scale-up activities;
- Qualifying “Bid and Proposal” efforts; and
- The development of custom software that is either intended to be used internally or sold, leased or licensed to third parties as a commercial product offering.
However, simply because some items may be new, unique, customized or involve special problems does not mean that they will automatically qualify for a credit. For instance, there may be options or choices in regard the application of standard engineering techniques, but no uncertainty in regard to the resolution of a technical issue facing the project team. Qualifying activities that are intended to resolve technical uncertainties should also involve some iterative type of testing, experimentation, the consideration of alternatives, trial and error evaluations, prototyping, validation, etc.
Thus, although no qualifying activity might occur for most HVAC systems (even where custom designs are involved), technical uncertainty might arise on mechanical engineering and/or design efforts in instances where there are unusual requirements involving, for example: complex temperature, humidity, pressure, ambient air ratio range controls with differing protocols for numerous chambers/rooms; the need to design for particulate and/or chemical fume control/mitigation where the chemistry might require special construction materials; unusual space limitations, local regulations, cost mandates, etc.; instances where numerous alternative methodologies for technical solutions are necessary; development of technical alternatives to address repeated system failures; etc.
The PATH Act of 2015 made the Research Tax Credit permanent but also broadened the impact of the credit for many small to mid-sized businesses. Starting January 1, 2016, small businesses that meet certain criteria can also use the Research Tax Credit to offset the FICA employer portion of payroll tax, with a credit cap of $250,000 for each eligible year.
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Mike Foley is the Managing Partner at Foley & Smith, LLC, a firm specializes in Research Tax Credits.
Mike D’Allesandro is the Managing Director at Research Tax Credits, LLC
The Tax Reform legislation just enacted by Congress and signed into law transforms the landscape for construction contractors. Check out this summary of provisions important to our industry, compiled by Withum Smith + Brown, PC construction tax experts. And for more detailed information, we will have a workshop on this important topic in San Antonio, so more information to come!
Emily Murphy, a former procurement policy consultant for the MCAA Government Affairs Committee and daughter of former MCAA President Jim Murphy and Mimi Murphy, was confirmed by the Senate as the new leader of the U.S. General Services Administration. The GSA is the lead civilian agency focusing on procurement policy and government operations.
Ms. Murphy’s confirmation hearing was held on October 18, 2017. She was introduced by Missouri Senator Claire McCaskill, the Ranking Democrat on the Senate Homeland Security and Governmental Affairs Committee.
Lawmakers on both sides of the aisle were supportive of Ms. Murphy’s appointment and exceptionally strong credentials for the position.
The Occupational Safety and Health Administration’s (OSHA) internet reporting rules and overtime pay regulations are under review by the Department of Labor, but two other Obama Administration rules of interest to the industry remain in uncertain status—the non-discrimination and affirmative action requirements for registered apprenticeship programs and the paid sick leave (EO 13706) rules for direct federal prime contractors and subcontractors.
The registered apprenticeship program rules remain only partially in effect awaiting additional guidance from the Labor Department. The Obama paid sick leave requirement was set for implementation in federal contract solicitations issued on or after January 1, 2017. So far, MCAA contractors have not encountered the required EO 13706 contract clause required in project specifications – so it remains unclear what course the Administration will take with respect to the new paid sick leave requirements.
The John W. Danforth Company, a charter member of MCAA and a leading northeast US regional mechanical construction company, hosted a fundraiser for New York Congressman Chris Collins on May 31st in Buffalo, NY.
Danforth company principals, Kevin “Duke” Reilly, CEO and Chairman, along with Robert Beck, President and MCAA Board Member, hosted some 15 Buffalo area construction and engineering firm principals for the meeting with Congressman Collins to discuss his agenda for the constituents of New York’s 27th Congressional District.
Congressman Collins discussed his amendment in the House-passed health care measure to alleviate the local county tax burden in financing health care subsidies. The third-term lawmaker, last elected with 86% of the vote, also discussed his support for the Trump Administration’s economic and tax reform agenda.
The local area construction firms also highlighted issues related to multiemployer pension reform and the need for quick Congressional proactive policy changes. As presented to Congressman Collins, these changes are needed to forestall a crisis in the multiemployer system for pension plan contributing employers in the Buffalo area and nationwide.
The MCAA/Construction Employers of America (CEA) Legislative Conference brought together a near record crowd of MCAA members and members of other CEA sponsoring groupsm SMACNA, FCA International and TAUC. The conference’s education sessions and lobbying meetings focused on key MCAA/CEA legislative issues and provided an opportunity for members to share their views with Senators, Representatives and key staff.
Lobbying Meetings Press Coalition’s Top Issues
Member company principals had some 160 Hill lobbying meetings with Senators, Representatives and key staff, pressing for the MCAA/CEA coalition’s top issues:
- Prompt and long-overdue enactment of multiemployer pension plan reform, including composite plan designs as an option for plan trustees to consider;
- Implementation of a broad new infrastructure investment measure, with protections for prevailing wage standards and consideration of project labor agreements for those projects;
- Enactment of energy efficiency tax incentives for building retrofits and waste heat recovery industrial projects; and
- Tax reform measures that spur private capital facility projects and use worker misclassification reform as a budgetary pay-for measure to fund corporate and Subchapter S tax cuts.
Proposed Changes to Pension, Health and Welfare and Apprenticeship Programs
The conference kicked off on Tuesday, May 10 with a regulatory policy program covering proposed changes to pension, health and welfare and apprenticeship programs. Josh Shapiro from Groom Law Group and Cary Franklin from Horizon Actuarial Services discussed pension reform and alternate plan de-risking measures available under current legal requirements.
They were followed by Aruna Vohra (right) from Horizon and Carolyn Smith from Alston & Bird law firm, who discussed the myriad of health care plan changes pending on Capitol Hill.
After that, Lou Malone (right) from the O’Donoghue law firm and MCAA General Counsel John McNerney discussed the non-discrimination and written affirmative action requirements pending under the new Administration.
Lawmaker Presentations Mark Start of Second Day
The next day, participants ventured to the offices of Hogan Lovells in downtown D.C. Former Congressman Earl Pomeroy of Alston & Bird, a consultant to the National Coordinating Committee for Multiemployer Plans (NCCMP), moderated a series of presentations from lawmakers, including Senator Pat Roberts (R-KS), Senator Joe Manchin (D-WV), Representative Chris Collins (R-NY-27), and Representative Brian Fitzpatrick (R-PA-8).
Union Representatives and Employers Discuss Pension Reform
Congressman Pomeroy also moderated a panel discussion among union representatives and employers on the key issue of pension reform. The union representatives included: Sheet Metal Air Rail and Transportation Workers General President Joe Sellers, Painters and Allied Trades General President Ken Rigmaiden, Iron Workers General President Eric Dean, and United Association Assistant to the General President Brad Karbowsky, along with Jeff Green, CEO of Harris Rebar Construction and an NCCMP board member.
The panelists allied in strong support of the necessity for enactment of the composite plan design option for trustees to consider for their plans, and the need to avert a Pension Benefit Guaranty Corp insolvency or premium increases that would imperil the sustainability of multiemployer plans.
Lobbying Meetings Deliver Key Messages to Lawmakers
That afternoon, conference participants set out for the Senate and House lobbying meetings, delivering direct messages from member company principals to key offices from the lawmakers’ home districts. At the debriefing session the following morning, consensus reports were that home district constituents did a good job delivering the coalition’s messages directly to their representatives.
Tax Reform Discussion Closes Out the Conference
The conference wrapped up with a comprehensive discussion of tax reform by Hogan Lovells tax expert Jamie Wickett. He discussed proposals affecting CEA member companies as taxpayers and businesses, and the impact of corporate tax reforms on corporate capital budgets and projects as market expansion incentives for CEA member companies.
Join Us Next Year!
Mark your calendar and plan to join us for the next conference, which is scheduled for May 8-10, 2018 in Washington, D.C.
OSHA’s new rule to protect construction workers from overexposure to crystalline silica becomes enforceable on September 23, 2017. Under the right conditions, overexposure to silica can lead to silicosis and other health problems. To help its members protect their workers, MCAA provides the following resources:
- An MCAA Safety Bulletin that highlights key provisions and summarizes the rule;
- An MCAA Guide to Silica Safety;
- A silica safety training video and accompanying pocket guide, documentation sheet, test and test answer key; and
- A model silica exposure control plan.
All of these resources are available free to members as a benefit of membership. Access any of them individually using the direct links above, or click the button below to see all of them in the Resource Center. They’re free to members as a benefit of membership.
The President signed into law H. J. Res 83, a resolution of disapproval rescinding a controversial change to OSHA’s recordkeeping rule. The rescinded provision extended the statute of limitations for OSHA to issue citations for recordkeeping violations from six months to five years. MCAA and other industry stakeholders insistently lobbied Congress in support of the joint resolution. The resolution not only rescinds the controversial provision, but bars OSHA from issuing a similar provision or rule in the future. The six-month statute of limitations was originally established by Congress in the Occupational Safety and Health Act of 1970.
MCAA’s 2016 Collective Bargaining Seminar aimed at improving bargaining relations, the effectiveness of terms and conditions to improve project performance, and achieving the ultimate goal of improving MCAA and UA market share.
Starting off the conference was Richard Barnes, former Director of the Federal Mediation and Conciliation Service (FMCS). He led a panel discussion with Dave Davia of the MCA of Colorado and Frank Wall of PMCA of Oregon concerning their efforts with their local UA partners to address bargaining issues, improve labor relations and affect project owner and public agency industry issues on behalf of their members who share a strong interest in gaining market share.
Carey Peters, Director of the Construction Labor Research Council (CLRC), detailed ways to track wage and benefits settlements and trends, assess competing open shop wage and benefit levels and trends, analyze the costs of terms and conditions of the collective bargaining agreement (CBA) and objectively assess market share in local areas. This information will be used as a strong factual predicate for sound mutual interest bargaining for labor and management to accurately assess and improve market performance and market share.
Comprehensive Legal Analysis in Three Parts
Relying on the in-depth legal analysis in the 2016 Edition of the MCAA/Ice Miller Collective Bargaining Guide and Legal Analysis that was provided to conference attendees in advance of the conference, Mike Boldt and Ryan Poor, partners of the Ice Miller law firm (Indianapolis, IN), divided their comprehensive legal presentation into three discrete parts:
- The legal structure of the multiemployer bargaining unit and the legal structure of bargaining relationships;
- The legal do’s and don’ts of typical CBA terms and conditions; and,
- Advanced topics in CBA and CBA employment administration, including OSHA rules and drug testing, wage-and-hour rules pertaining to workers’ travel, negotiating project specific CBA’s and a number of other topics.
New laws and Labor Department Regulations
Five new Labor Department initiatives that will impact collective bargaining, employment administration and trust fund implementation in the coming year were covered.
Proposed new written affirmative action regulations for registered apprenticeship programs were detailed by UA and International Training Fund counsel Lou Malone and MCAA General Counsel John McNerney. Unless regulatory impediments surface after the election, employers and apprenticeship programs can expect to adapt to new written affirmative action plan requirements for registration of women, minorities and workers with disabilities into JATC programs during the coming year.
U.S. Department of Labor (DoL) officials briefed the conference on a variety of new regulations set to come out next year and possibly in 2018. Bob Batista, former Chairman of the National Labor Relations Board, introduced a panel of officials from the Labor Department, including Sharon Block, Senior Counsel to the Secretary of Labor. Ms. Block noted that the Administration’s Fair Pay and Safe Workplaces Executive Order (EO13673) had recently been suspended by a federal court in Texas. She also said that the EO was expected to be pushed forward again in the future. The DoL Principal Deputy Assistant Secretary for Policy addressed the group and noted MCAA’s participation in several of the DoL procurement-related rulemakings over the past year and a half.
Jonathan Rees and Sarah Marcus from the DoL Solicitor’s Office and Amy DeBisschop and Bill Isokait from the DoL Wage and Hour Division detailed the new EO13706 Paid Sick and Family Leave regulations affecting direct federal prime contractors and subcontractors. The new regulations will begin to take effect on new contracts entered into on and after January 1, 2017. Vigorous discussion of ways to implement that new set of requirements centered on whether covered employers would want to implement the new paid time off rules as individual employers or under a Taft-Hartley benefit plan.
MCAA will be presenting a webinar with the Groom Law Group on the new rules in mid-November. Additional guidance on compliance options will be presented at that time.
The new Labor Department Mega Construction Project affirmative action program was described in detail by Theresa Lujan, Director of the Mega Project Initiative in the Office of Federal Contract Compliance programs (OFCCP). She noted that 11 of the 37 mega project programs currently in effect involve some aspects of project labor agreements and community workforce development programs.
The conference ended with discussions about pension reform, alternate plan de signs and plan liability issues. Josh Shapiro, an actuary, and Malcolm Slee an attorney with the Groom Law group led a discussion session on multiemployer pension plan issues and what legislation and their prospects bargaining parties and contributing employers should anticipate for new composite plan options, increased Pension Benefit Guaranty Corp premium increases and other specific plan liability developments. Shapiro also discussed pension plan asset return assumptions, developments relating to the use of new mortality tables for actuarial assumptions and a variety of multiemployer plan withdrawal liability issues. Slee discussed prospects for changes to the Affordable Care Act by the new Congress as well as benefit plan implementation of the new regulations requiring paid sick leave on direct federal construction prime contracts and subcontracts.
Following a multi-year tradition, board of directors’ members for the MCA of Connecticut and the MCA of New England all donated generously to the MCAA PAC. Both associations are among the most consistent supporters of MCAA’s PAC and legislative policy initiatives.
MCAA PAC resources will be especially important in the upcoming 115th Congress as our industry will be faced with challenging legislative and regulatory policy initiatives that will require a high profile with decision makers on key industry issues. Gaining access to policy makers on both sides of the aisle concerning our issues will be critical to passage of the legislation we need to keep our industry strong and thriving.
Flat rate premiums for multiemployer plans increased by 3.7 percent, rising from $27 to $28.
The increase is the result of the COLA escalator added to the PGBC premium mechanism in the Multiemployer Pension Reform Act of 2014. The next question will be how much more Congress may increase the basic PBGC premium to address the likelihood that PBGC’s multiemployer premium fund will become insolvent within 10 years, unless some effective way is found to staunch the growing claims on PBGC’s multiemployer insurance fund by the growing number of critical and declining plans.
The issues relating to PBGC premiums are separate and distinct from MCAA’s efforts in the National Coordinating Committee for Multiemployer Plans’ (NCCMP) Solutions Not Bailouts coalition to gain enactment of greater options for multiemployer plan trustees to devise composite plan structures that will help avoid insolvencies in the future. The composite plan options are merely options for trustees to consider; they are not mandatory and will be subject to individual plan fiduciary decision-making.
For more information, go to PBGC premium rates.