Home » Features » 2015 Opens with a Laundry List of Regulatory Issues to Monitor

2015 Opens with a Laundry List of Regulatory Issues to Monitor


Contractors who feel like there’s a new regulation looming every time they turn around are not just imagining an increase in the rules. Federal agencies issued 3,659 final rules in 2013. These rules along with proposed rules, notices and executive orders filled 80,224 pages of the Federal Register, a 3.8 percent increase over 2012.

Because these regulations are developed for businesses across all industries, one key role for AGC of America is to serve as the voice of the construction industry to federal and state agencies. “We’ve been effective in our efforts to move agencies toward reasonable positions or to stall some regulations that would have negative effects on the construction industry,” says Jeff Shoaf, senior executive director of government affairs. “We have also had a lot of luck working with discrete segments of the construction industry to educate agency representatives and develop effective comments on proposed rules.”

In addition to proposed rules, two executive orders could limit contractors’ ability to bid on federal projects, says Shoaf. “Executive Order 13502 encourages federal contracting agencies to impose Project  Labor Agreements (PLAs) on federal construction projects in excess of $25 million,” he explains. Although the order does not mandate PLAs, many agencies do consider them.

Where mandated, PLAs may require both union and open shop contractors to alter their hiring practices, work rules, job assignments and benefits simply to compete for the covered project. “We’ve written to federal agencies over 90 times in the five years since the president issued the Executive Order and have been effective in making these agencies aware of the negative effects of PLAs, particularly on competition for the work,” he says. “We rely on our members to let us know when PLAs are being  considered and when they are, we work with the agency to identify the consequences of going forward with a mandate.”

One of the most far-reaching of the new executive orders is Executive Order 13673 on “Fair Pay and Safe Workplaces.” It requires contractors to disclose, and agencies to consider, any labor law or employment law violations that bidders or proposers have had at any time in the past three years,” says Jimmy Christianson, director of AGC’s federal and heavy construction division. “Our concern is that contractors will be deemed irresponsible and denied work for violations for which they have already made amends,” he says. “The Executive Order covers not only federal but also state laws, creating a particularly severe problem for companies operating in states with stringent laws of their own. Through no fault of their own, the contractors operating in those states may be deemed less responsible than contractors operating in other states.” While AGC supports efforts to weed out “bad actors” who cannot be expected to act responsibly, AGC does not believe this EO is appropriate, he says. “We are communicating with federal agencies and Congress, and working with coalitions to represent our members’ interests,” he says. “We will continue to monitor and report to members.”

While the list of proposed rules that may affect contractors’ businesses in 2015 is constantly changing, the top issues for the construction industry currently include the following:

EPA and Corps of Engineers proposal to redefine “waters of U.S.”

A proposed rule redefining the “waters of the U.S.” asserts control of waters that were previously under the sole jurisdiction of states, including ditches, conveyances, isolated waters and other wet features, says Leah Pilconis, a consultant on environmental law and policy, and AGC’s senior environmental advisor. The number of ditches – roadside and flood-control channels and even “green infrastructure” controls that are required by many states, will fall under federal control under the proposed rule. “Contractors will also have to prove that water-filled depressions created during construction are not federal waters through use of aerial photos and old maps,” she says. “These requirements place undue burden on contractors in addition to additional permits, expense and time,” she adds.

EPA proposal to require e-reporting
In an effort to give the public (including special interest groups) greater access to information on stormwater controls and how well they are working, EPA has proposed to require contractors operating under a National Pollutant Discharge Elimination System (NPDES) permit to report to EPA electronically. This would enable EPA to post each contractor’s stormwater permit records and compliance history on a publicly accessible website. “AGC is concerned about the accuracy of data that would appear in EPA’s publicly available database(s), the likelihood that such data will be misinterpreted or misconstrued, and the potential disclosure of confidential business information,” says Pilconis.

EPA post-construction stormwater runoff
EPA is no longer pursuing a national rule to control stormwater flow from new and redeveloped sites. The agency is, however, seeking to add new requirements to the stormwater permits that municipalities have long required, and in that indirect way, restrict the same flow. “As they renew their municipal stormwater permits, municipalities are being led to believe they must include stringent requirements to retain/infiltrate stormwater onsite,” says Pilconis. “Our concerns are that these requirements will deter construction and expose contractors to liability for the performance of projects long after their completion,” she adds. The issue arises whenever a municipality seeks to renew its NPDES permit. Pilconis urges AGC members to notify the association as these permits go out for public comment.

EPA plans to regulate projects involving lead paint
The EPA is preparing to propose a rule in the summer of 2015 to greatly expand the number of requirements for building renovations and other projects subject to stringent requirements because they might disturb lead-based paint – creating lead dust that endangers others in the area. Prior to proposing this rule, EPA is seeking to survey the construction industry to better identify which buildings contain lead paint and how they are maintained. AGC has argued that EPA should first establish that there is a hazard, given that OSHA regulations already regulate exposure to lead dust. AGC has added that the survey results are not likely to be analyzed and interpreted prior to the deadline for the proposed rule.

EPA proposal to garnish wages
A surprise proposal that appeared in August of 2014 is an EPA proposal to allow the agency to garnish up to 15 percent of an individual’s disposable pay if the individual is delinquent in the payment of EPA fines and penalties. AGC opposes this proposed rule because it deprives individuals of their due process right to a fair and impartial review of claims that they have violated the law and puts individual citizens at risk for what are typically corporate matters. Pilconis explains AGC’s concerns by asking, “If an employee signs a permit application or verifies completion of work, does that employee risk personal liability, via wage garnishment, for any unpaid company fines for alleged violations?”

DOT proposal to revise rules on Disadvantaged Business Enterprise (DBE)
A DOT proposal will require highway and transportation contractors to submit a list of the DBEs they plan to utilize, along with a description of the scope, type and dollar amount of each DBE’s work, and letter of agreement with each DBE along with their bids. Although contractors typically provide this  information post-bid, requiring them to submit it at the time of bid and prior to award of the contract causes problems for members, says Brian Deery, senior director of AGC’s Highway and Transportation Division.

“If a DBE is unable to perform the work once the project is underway, the contractor must get permission to replace the business and search for another DBE to fill the role, which creates time delay and additional cost,” he explains. Regardless of what happens with the proposed rule, AGC members should also be aware that states are pushing to increase DBE goals. “AGC members should develop relationships with reliable, quality DBEs to meet future requirements.”

DOL proposal to require more reporting on “persuader activity”
DOL has proposed to narrow the “advice exemption” from requirements for onerous reports on “persuader activity.” The requirements generally apply to consultants, including attorneys, who advise employers on communications with employees about their rights to organize, and traditionally, they have been limited to consultants who actually speak to employees. AGC believes the rule would make it more difficult for employers to oppose union organizing drives and limit the information that employees receive from their employers’ perspective, says Denise Gold, associate general counsel for AGC. “DOL has indicated it plans to publish a final rule in December of 2014, but it is possible that DOL will further delay or even abandon the rule,” she says.

OFCCP proposal for new rules on affirmative action for minorities and women
The Office of Federal Contract Compliance Programs (OFCCP) is preparing to propose an increase in the federal requirements for the recruitment and training of minorities and women for employment on federal and federally assisted projects. The agency has announced plans to propose new rules in January 2015 but may not make that deadline, says Tamika Carter, director, construction HR for AGC. “We hope to replicate the success we had last year, when we persuaded OFCCP to take a more reasonable approach to affirmative action for veterans and disabled persons,” says Carter. Among many other things, AGC persuaded the agency to drop a 2 percent sub-goal for employment of disabled veterans, and to simplify documentation and reporting requirements.

NLRB proposal to authorize “Quickie Elections”
In February of 2014, the NLRB re-proposed a “quickie election” or “ambush election” rule that would significantly expedite the union election process. AGC believes that the rule denies employers due process and time to prepare for a union organizing campaign, giving unions an unfair advantage, says Gold. Whether or not the proposed rule is finalized, Gold suggests that AGC members strive to be employers of choice, so employees will have little incentive to organize against the preferences of their employers.

OSHA proposal to further limit exposure to silica
OSHA has proposed to reduce the permissible exposure level for silica exposure to 50 micrograms per cubic meter, creating a serious compliance challenge for contractors, says Kevin Cannon, AGC’s director of safety and health services. Currently, the standard is 100 micrograms per cubic meter and most contractors operate under this threshold, he says. The proposed rule also leaves contractors uncertain of how to define a regulated area and how to monitor silica dust continuously, as different trades quickly come and go from the area. As AGC and its coalition partners continue to communicate with OSHA, Cannon suggests that AGC members evaluate silica exposure on their jobsites and identify strategies they may need to take if the rule is finalized.

OSHA proposal to require e-reporting
AGC has several concerns with an OSHA proposal to require employers to electronically report injuries and illnesses. Much like EPA, OSHA plans to post the reported information on a public website. “Privacy and liability for release of an individual’s name and associated health condition is a key issue, since employee names are included in employer reports,” says Cannon. “Also, making this information available to the public could cause undue concern, since the public has no context and no knowledge of company policies.” Requiring regular reporting, and not simply requiring records to be available to a site inspector, also increases the potential for OSHA to use reports to target employers for inspections, he adds. OSHA has extended the time for review of the proposal, and has yet to announce a deadline for making a final decision.

AGC’s professionals keep its members informed of the status of proposed rules and regulations, and offers resources to members for educational and advocacy purposes. This information can be found on the AGC website.

The Construction Advocacy Fund: Funding the Fight
Principles and integrity go a long way in fighting battles, in protecting rights, in working for the benefit of any association. But, the only way to go all the way is with sufficient funds to fuel those efforts.

The Construction Advocacy Fund (CAF) makes it possible for AGC to persist in its work to expand markets, to push back against burdensome regulations and special-interest overreach, to promote workforce development and to improve new technology.

“It pays for economic research. It pays for litigation. It pays for public relations to support funding initiatives. It pays for expert analysis of regulatory proposals,” explains Jeff Shoaf, senior executive director of government affairs for AGC. “It pays for expert analysis of regulatory proposals, things that we don’t have the time or resources, or in some cases the specialized expertise, to make credible claims for or against certain initiatives put forth by the government.”

In other words, it’s critical to keep the coffers full.

Contributions to the Construction Advocacy Fund can be made via the AGC website at www.agc.org/constructionadvocacyfund. It’s really that simple.

And, says Shoaf, those who reach out will also be identified as members who care about a given issue. As such, they may be called upon to provide insight into a given regulatory proposal’s potential impact on the industry.

Members have united to help the cause, as well. “We’ve had groups of members raise $100,000 to help make the case for multiemployer pension plan reform,” says Shoaf. Organized fundraisers between contractors and their colleagues and other interested parties are a great way to network while aiding the efforts for a common cause.

“It’s nice to see the shared concern,” he notes, “and the willingness of our members to really step up and make sure we have the resources we need to get these jobs done for the industry.”