The Associated Builders and Contractors, along with its Southeast Texas chapter, announced Friday that it has filed a legal challenge against the U.S. Department of Labor's Fair Pay and Safe Workplaces rule.
Ben Brubeck, ABC vice president of regulatory, labor and state affairs, said in a press release that the "blacklisting" rule would violate contractors' First Amendment rights and restrict open competition for federal contracts by forcing companies to reveal allegations of unadjudicated labor and employment law violations.
- The ABC also contends that the new order would create a costly regulatory burden for smaller companies, thereby reducing the pool of bidders and increasing the cost to taxpayers.
Another concern for the ABC is that contractors who have already been found guilty of labor law violations — and made good on any fines or penalties — could be punished again by being disqualified from federal work.
The DOL will begin its phased rollout of the executive order Oct. 25, with full implementation scheduled for October 2017. At first, only contractors bidding on federal projects worth $50 million or more must furnish a one-year labor/employment law compliance history as part of the prequalification process. However, by next year, both general contractors and subcontractors bidding on work valued at more than $500,000 must also provide that information. Additionally, companies working under federal contracts must give detailed wage statements with employee paychecks and offer notice to independent contractors of their status as non-employees.
According to an ABC survey last month, more than 50% of respondents said the new rule's requirements would keep them from pursuing federal work, and 91% said it would impose an "extreme" onus from a compliance standpoint. Cost was also of major concern to survey participants, with 98% responding that the contracting process would become more expensive as a result. The ABC said that from 2009 to 2015, its members performed more than 60% of all federal construction projects exceeding $25 million in value.
The ABC, the Associated General Contractors of America and other trade groups have been at the forefront of the pushback against a handful of recent government mandates they deem too oppressive. The Occupational Safety and Health Administration's revised silica rule drew industry ire this past spring when the agency decreased exposure limits and increased monitoring and reporting activities around those exposed to the breathable dust. The new OSHA regulation went into effect in June, and attempts to block it have been unsuccessful.
Not so with the "anti-retaliation" provision of OSHA's new electronic record keeping rule. In the wake of industry outcry, OSHA decided to delay implementation of this hotly contested portion of the regulation, which limits employers' ability to perform post-accident drug and alcohol testing, until November, claiming that they were taking additional time to educate employers about it. The ABC and other construction industry organizations also filed a legal challenge to that rule over the summer.