Category: News Line

ABC joined 42 other national and state organizations in signing onto a letter to Treasury Secretary Steve Mnuchin asking the department to address the confusing and conflicting definitions of “seasonal worker” and “seasonal employee” that are included in the Affordable Care Act (ACA) and its implementing regulations.

The letter points out that due to the varying definition of “seasonal,” small businesses continue to struggle with determining their employer size and employer shared responsibility requirements. When complying with the ACA, it is possible for the same worker to be a “seasonal worker” for the purpose of determining employer size, but not be considered a “seasonal employee” under an employer’s shared responsibility obligations.

The letter explains that the various definitions of “seasonal” include: 

• A “seasonal worker” is defined as “a worker who performs labor on a seasonal basis as defined by the secretary of labor” in determining whether an employer is treated as a small business or a large business, known as an applicable large employer (ALE). 
• The ACA’s “seasonal worker exception” is used for determining ALE size. The regulation allows employers to examine if seasonal workers put the employer over the 50-employee threshold for 120 days or less. This determination is made on an annual calendar-year basis. 
• If determined to be an ALE for the calendar year, the employer must determine to whom coverage must be offered; otherwise they face a potential penalty. Options include using either a monthly measurement method or an optional look-back measurement method. Under the optional look-back measurement method, “seasonal employee” is defined as an “employee who is hired into a position for which the customary annual employment is six months or less.” 

In the letter, ABC and the other organizations requested an open dialogue with Secretary Mnuchin to discuss possible approaches to simplifying the various definitions to the extent allowed by regulation. 

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ABC joined 42 other national and state organizations in signing onto a letter to Treasury Secretary Steve Mnuchin asking the department to address the confusing and conflicting definitions of “seasonal worker” and “seasonal employee” that are included in the Affordable Care Act (ACA) along with its implementing regulations.

The letter points out that due to the varying definition of “seasonal,” small businesses continue to struggle with determining their employer size and employer shared responsibility requirements. When complying with the ACA, it is possible for the same worker to be a “seasonal worker” for the purpose of determining employer size, but not be considered a “seasonal employee” under an employer’s shared responsibility obligations.

The letter explains that the various definitions of “seasonal” include: 

• A “seasonal worker” is defined as “a worker who performs labor on a seasonal basis as defined by the secretary of labor” in determining whether an employer is treated as a small business or a large business, known as an applicable large employer (ALE). 
• The ACA’s “seasonal worker exception” is used for determining ALE size. The regulation allows employers to examine if seasonal workers put the employer over the 50-employee threshold for 120 days or less. This determination is made on an annual calendar-year basis. 
• If determined to be an ALE for the calendar year, the employer must determine to whom coverage must be offered; otherwise they face a potential penalty. Options include using either a monthly measurement method or an optional look-back measurement method. Under the optional look-back measurement method, “seasonal employee” is defined as an “employee who is hired into a position for which the customary annual employment is six months or less.” 

In the letter, ABC and the other organizations requested an open dialogue with Secretary Mnuchin to discuss possible approaches to simplifying the various definitions to the extent allowed by regulation. 

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Eight ABC members joined more than 100 small business owners at the White House this week for an event highlighting small businesses, “The Engine of the American Dream.” 

At the event, President Trump highlighted his administration’s commitment to instituting policies that allow small businesses to flourish in America and spotlighted the important contributions that small businesses make to the American economy.  Topics of discussion included tax reform, growth resources and regulatory relief.  Also in attendance were Small Business Administrator Linda McMahon and Ivanka Trump, White House senior advisor. 

ABC members found value in the event. “I felt that President Trump and Ivanka understood the spirit of our struggles as small business owners. Ivanka really hit the nail on the head when she spoke about surrounding yourself with people you can trust who know areas of the business that you are lacking knowledge in,” said ABC Oklahoma member Andy Wright. 

“It was in honor to be asked to go to the White House and represent ABC and the merit shop,” said ABC Cornhusker chapte member David Chapin. “The president hit home on several issues important to our members.  He delivered a clear message that he is not done rolling back regulations. He is serious about real tax reform.” 

ABC members who attended the event were:

David Chapin, President, Willmar Electric Service, Lincoln, Neb.
Sharon Hamilton, President, Sentinel Fence and Contracting, Scottsdale, Ariz.
Larry Lopez, President, Green JobWorks, Baltimore
David C. Mollitor Jr., President/CEO, DeWitt, Mich.
Shawn P. Pnacek, President, Great Lakes Bay Construction Inc., Midland, Michigan 
Stephanie Schmidt, President, Poole Anderson Construction, State College, Pa.
Andy Wright, President, FlorWright Inc., Tulsa, Okla.
Kirby Wu, President, Wu & Associates Inc., Mount Laurel, N.J

From left to right, Shawn Pnacek, David Mollitar, Larry Lopez, David Chapin, Kirby Wu, Andy Wright,

Sharon Hamilton and Stephanie Schmidt 

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Eight of the top 10 construction companies are ABC members, according to Engineering News-Record’s recently published annual list of Top 400 Contractors. The firms were ranked based on 2016 revenue.

1. Bechtel, San Francisco
2. Fluor Corp., Irving, Texas
3. The Turner Corp., New York 
4. Cb&I Llc, The Woodlands, Texas
5. Aecom, Los Angeles
6. Kiewit Corp., Omaha, Neb.
7. Skanska Usa Inc., New York
8. Pcl Construction Enterprises Inc., Denver

The combined contracting revenue of the Top 400 was a record $366.41 billion, according to ENR, an increase of 6.5 percent from 2015’s $344.14 billion. Contracting revenue from U.S. projects rose a healthy 9.7 percent, to $322.83 billion, on top of a 9.5 percent rise in domestic revenue last year.

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The U.S. Department of Labor (DOL)’s Wage and Hour Division recently published a Request for Information (RFI) related to the overtime final rule. This is likely the first step in issuing a revised proposed overtime exemption rule. The public has the opportunity to submit comments on the RFI until Sept. 25, 2017.

ABC’s general counsel, Littler Mendelson P.C., provided an analysis of DOL’s RFI.

The Obama administration issued the overtime final rule on May 18, 2016, which would have changed the federal exemptions for overtime pay under the Fair Labor Standards Act for “white collar” workers by doubling the current minimum salary level for exemption from $23,660 to $47,476 per year and automatically increasing it every three years. 

In September 2016, ABC and a coalition of business groups filed a lawsuit against the rule in the U.S. District Court for the Eastern District Court of Texas, which on Nov. 22 issued a preliminary injunction blocking the final rule from going into effect. ABC’s lawsuit remains pending.
  
ABC has been a vocal opponent of the overtime rule and submitted comments along with more than 900 ABC members opposing the rule. ABC supported legislation that would prevent DOL from implementing the rule and that would have delayed its implementation and submitted comments as a member of the Partnership to Protect Workplace Opportunity as well.

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Health Care Alert:  “Skinny Repeal” Rejected in Senate 

During the early hours of July 28, Senators Susan Collins (R-Maine), John McCain (R-Ariz.) and Lisa Murkowski (Alaska) voted “no” on the Senate Republican’s “skinny repeal” proposal, a scaled-back version of previously supported Senate Republican Affordable Care Act (ACA) repeal bills, which failed by a vote of 49 to 51. If the vote on final passage had been successful, it would likely have triggered a conference committee with the House of Representatives whereby the chambers would have tried to resolve their legislative differences. Senate Majority Leader Mitch McConnell’s (R-Ky.Y) statement on the failed vote can be read here.  

At this time, it is unclear what further action Congress will take on health care reform.  Most likely, their attention will now turn to tax reform.  

Below is an overview of the actions that led up to the July 30 vote:

On July 25, the U.S. Senate voted to begin debate on the repeal of the Affordable Care Act (ACA). The Senate voted 50-50, with Vice President Mike Pence breaking the tie, in support of moving forward with debate on H.R. 1628, the American Health Care Act. In advance of the vote, ABC sent a key vote letter urging senators to vote “yes” on the motion to proceed. 

On Tuesday evening, the Senate voted on the Senate Republicans’ Better Care Reconciliation Act, which included the Cruz and Portman proposals.  The amendment failed by a vote of 43 to 47, with nine Republican senators voting no.  Sixty votes were needed for it to advance. 

On July 26, the Senate voted on Sen. Rand Paul’s (R-Ky.) amendment to repeal the ACA with a two-year delay, which failed by a vote of 45-55.  Seven Republican senators voted no.  

The Senate moved forward with 20 hours of debate and voted on dozens of amendments. 

Background:

On May 4, the U.S. House of Representatives took steps to repeal and replace the ACA by passing H.R. 1628, the American Health Care Act (AHCA). H.R. 1628 would repeal several of the most harmful and burdensome provisions of the ACA, including the employer mandate penalty, costly tax increases and limitations on contributions to and restrictions on the use of flexible spending accounts and health savings accounts. ABC sent a letter in support of H.R. 1628 to the U.S. House of Representatives, which passed the House by a vote of 217-213. 

For the past several weeks, the U.S. Senate had worked on crafting “repeal and replace” legislation, and at the end of June, H.R. 1628, the Better Care Reconciliation Act (BCRA) was unveiled as well as scored by the Congressional Budget Office (CBO). On July 13, an updated version of BCRA was released following further discussions with the Senate Republican Conference, which included the much-publicized Cruz amendment.  No vote was taken on the bill, as various reports indicated Republicans did not have enough support to move the bill forward.   

On July 20, a third draft of the BCRA was released (see a section-by-section summary for details). CBO estimated that over the next ten years, the bill (which did not include the Cruz amendment) would reduce federal deficits by $420 billion and increase the number of uninsured individuals by 22 million in 2026.  

ABC staff will continue to provide updates on any health care developments in Newsline.

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During ABC Legislative Week 2017, ABC launched a video, “Be a Hero: Download the ABC Action App” to encourage construction advocates to download the mobile app and advance the merit shop message on Capitol Hill. Now members can share the video as well. 

The ABC Action app is an important advocacy tool that enables users to take action in grassroots campaigns and push for pro-merit shop legislation in Congress. Through the app, users can send letters to their members of Congress with just one click, receive instant notifications for grassroots and legislative alerts, learn more about ABC priority issues, access the voting records of their representatives on key ABC issues, find detailed contact information for federal and state lawmakers and check out state-specific policy information from ABC’s Merit Shop Scorecard.  Construction advocates can download the app in the Apple or Google Play stores. 

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Last week, U.S. Citizenship and Immigration Services (USCIS) announced a newly-revised Form I-9, Employment Eligibility Verification, which will be made mandatory starting Sept. 18, 2017.

Employers may use the revised version immediately (revision date of 7/17/17 N), but may also continue to use Form I-9 with a revision date of 11/14/16 N through Sept. 17.

Changes to the revised form include: 

• A new name for the Office of Special Counsel for Immigration-Related Unfair Employment Practices, which has been changed to the Immigrant and Employee Rights Section (IER).
• The changed language in Section 2, which now reads: “Employers or their authorized representative must complete and sign Section 2 within 3 business days of the employee’s first day of employment.”
• The List of Acceptable Documents includes the Consular Report of Birth Abroad (Form FS-240) as a List C document.
• All certifications of report of birth issued by the U.S. Department of State (Form FS-545, Form DS-1350 and Form FS-240) have been compiled.

In addition, USCIS also revised the Handbook for Employers: Guidance for Completing Form I-9 (M-274). More information on Form I-9 is available on the USCIS website.

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Last month, the U. S. District Court for the District of New Jersey found that a 2007 Jersey City ordinance requiring project labor agreements (PLAs) on private projects receiving tax abatements is preempted by the National Labor Relations Act (NLRA).

“The ruling will create a level playing field for all qualified contractors competing for work on Jersey City tax-abated projects,” said Associated Builders and Contractors Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “It also calls into question the legitimacy of similar anti-competitive local ordinances imposing PLA requirements as well as ordinances requiring contractors to participate in apprenticeship programs.”

The case involved a Jersey City ordinance encouraging private developers to invest in the city by offering tax abatements for private developments on the condition developers require construction contractors to enter into a PLA to perform work on a project.

In August, 2015, the New Jersey Chapter of ABC (ABCNJ) led a group of merit shop contractors in filing a suit, arguing the ordinance was preempted by federal law and Jersey City was acting as a market regulator and not a market participant. See Associated Builders and Contractors Inc., New Jersey Chapter et al. v. Jersey City, New Jersey, No. 2:14-cv-05445 (D.N.J. 2015).

After the District Court dismissed the complaint on the grounds that the preemption doctrine did not apply to the city, the chapter brought the case to the Court of Appeals for the Third Circuit in June 2016. In September 2016, the appeals court reversed the decision of the lower court, holding that Jersey City was, in fact, a market regulator in its enforcement of the PLA ordinance and remanding the case to the District Court for preemption analysis. See Associated Builders & Contractors Inc. v. Jersey City (3d Cir. 2016).

The June 15, 2017, decision came from District Court Judge Susan Wigenton, who determined that the ordinance “directly intrudes on § 7 and § 8 of the NLRA,” according to her opinion. See Associated Builders and Contractors Inc. v. Jersey City, No. 14-5445 (D.N.J. 2017).

The Court also held that the PLA ordinance’s attempt to regulate the operation and reporting of apprenticeship programs intruded upon and therefore was preempted by the Employee Retirement Income Security Act.

When mandated by a government agency on a taxpayer-funded project, PLAs drive up the cost of construction projects by between 12 percent and 18 percent, according to a series of academic studies. PLAs typically ensure construction contracts are awarded only to companies that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers at the expense of existing qualified employees; obtain apprentices through union apprenticeship programs; follow inefficient union work rules; pay into union benefit and multi-employer pension plans workers will never benefit from unless they meet vesting requirements; and force workers to pay union dues and/or join a union as a condition of employment.

ABCNJ was represented by Russ McEwan of Littler Mendelson P.C.

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On July 19, the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP) approved the nominations of Marvin Kaplan and William Emanuel to serve on the National Labor Relations Board (NLRB). Both votes occurred along party lines.

Ahead of the vote, ABC sent a letter to Chairman Sen. Lamar Alexander (R-Tenn.) and Ranking Member Sen. Patty Murray (R-Wash.) urging the HELP Committee to approve the nominees and move quickly to bring the nominations to the floor for a vote. In the letter, ABC said, “The president has nominated two highly qualified candidates who can restore balance to the NLRB. Mr. Kaplan, counsel to the commissioner of the Occupational Safety and Health Review Commission, and Mr. Emanuel, a shareholder at the law firm Littler Mendelson P.C. in Los Angeles, are experts in the field of labor relations. Together they have decades of experience interpreting the NLRA in a manner that is balanced and without favor to political party.” 

The Senate HELP Committee held a hearing on the nominations July 13. ABC, along with the Coalition for a Democratic Workplace, submitted a letter for the record in support of Kaplan and Emanuel.

The nominations will now go before the full U.S. Senate and will be voted on at a date yet to be determined. If confirmed, the NLRB will have all five seats filled for the first time since August, 2015. The NLRB currently has one Republican and two Democratic members, and filling the two open seats will restore the board to its intended purpose of acting as a neutral umpire after years of the current Democrat-controlled board upsetting long-standing NLRB precedent and creating uncertainty for businesses and employees. 

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