The Chamber

NLRB Recess Appointments

In January of 2012, President Obama declared the Senate to be out of session and appointed three new members to the National Labor Relations Board (NLRB) without due vetting under the Senate’s constitutional responsibility of advice and consent.

On January 25, 2013, the U.S. Court of Appeals for the District of Columbia held unanimously in Noel Canning vs. NLRBthat the President’s recent appointments to the Board were unconstitutional. The NLRB plans to petition the ruling before the U.S. Supreme Court. 

Neither the administration nor the NLRB itself has taken any meaningful steps to demonstrate restraint in the wake of the ruling while it awaits Supreme Court consideration. In February of 2013, the White House re-nominated two of the controversial appointees to the NLRB, and Board Chairman Mark Pearce announced following the Noel Canning decision that the Board “will continue to perform [its] statutory duties and issue decisions.”

While a few specific D.C. Circuit cases have been suspended pending Supreme Court review of the Noel Canning case, the fates of most decisions issued in the past year remain unclear. The ruling that the Board appointments were invalid raises questions as to whether NLRB actions taken while operating without Senate-confirmed Board members are in fact enforceable. This means employers could face litigation over potentially invalid NLRB decisions now, and then yetagain if the Supreme Court holds that the Board did not have a right to take such actions without a quorum of confirmed members. This uncertainty imposes real costs and additional layers of litigation on employers and other parties involved in pending NLRB actions.

Status of Legislation: On March 13, 2013, Representative David Roe (R-TN) introduced H.R. 1120, the Preventing Greater Uncertainty in Labor-Management Relations Act.  The bill would prohibit the NLRB from taking actions which require a quorum until this controversy is resolved by Senate confirmation of the appointees, a Supreme Court ruling, or the expiration of the terms of the three recess appointees with the adjournment of the 113th Congress.  It also would prohibit the Board from enforcing any action taken after January 2012 that required a quorum. On March 20, the House Committee on Education and the Workforce approved H.R. 1120 by a vote of 23-16. The bill now awaits consideration by the full House of Representatives. 

IEC Position: IEC supports H.R. 1120 and the upholding of the D.C. Court’s decision in Noel Canning. IEC issued a letter of support for H.R. 1120 during committee consideration, and is urging House members to vote YES on the bill when it is brought to the floor the week of April 8. Click here to contact your Member of Congress and ask for their support. 

 

Workforce Development Funding and Reform

According to the U.S. Bureau of Labor Statistics (BLS), electricians will have a 23 percent growth rate between 2010 and 2020, which is higher than the national average job growth rate.  Even so, our industry is still experiencing a shortage of qualified workers. 

In 1998, Congress passed the Workforce Investment Act (WIA), replacing the Job Training Partnership Act (JTPA) as the largest single source of federal funding for workforce development activities. WIA created a universal access system of one-stop career centers providing access to training and employment services for a range of workers, including low-income adults, low-income youth, and dislocated workers. A number of IEC chapters currently receive funding through several key workforce development programs that have helped them to train approximately 10,000 apprentices per year. Ensuring continued funding for federal job training programs is integral to electrical contractors seeking skilled workers and bolsters America's recovering economy by providing job seekers with the training they need to find employment. 

Since its enactment, WIA has not been revised or updated by Congress to reflect the changing needs of America's workforce. Both employers and job seekers have expressed frustration that navigating the bureaucracies of the multiple federal agencies administering education and training programs is often difficult and confusing. In 2011, the Government Accountability Office (GAO) conducted a review of federally available workforce development programs. GAO found little information was actually known about the effectiveness of these programs, and that almost all programs surveyed overlapped with at least one other program in the services they provided and populations they served. As a result, GAO recommended in its report that colocating and consolidating employment and training services provided by these mutiple programs would increase administrative effeciencies.

Status of Legislation: On February 25, 2013, Representative Virginia Foxx (R-NC) introduced H.R. 803, the Supporting Knowledge and Investing in Lifelong Skills (SKILLS) Act. The bill streamlines and consolidates the array of funding streams for workforce development into one Workforce Investment Fund, through which states can more efficiently provide support services for employers, workers, and job seekers.  By requiring that two-thirds of both state and local Workforce Investment Board members are employers, the SKILLS Act also strengthens the involvement and decision-making power of business leaders familiar with the employment and training needs and priorities of their communities. Lastly, the SKILLS Act removes statutory language barring merit shop contractors from accessing green jobs training grants.  

On March 20, the U.S. House of Representatives passed H.R. 803 by a vote of 215-202. The bill now awaits consideration by the Senate.

IEC Position: IEC supports the SKILLS Act as part of a much-needed effort to modernize federal job training programs as well as funding at current levels or above for workforce training and development.

 

Davis-Bacon Act

The Davis-Bacon Act is a Depression-era law that requires the payment of the local prevailing wage - the wage paid to a majority of workers or the average wage in a given classification in given area - on all federally-funded construction projects.  The Davis-Bacon wage rate is supposed to be based on the information gathered via voluntary wage surveys.  In reality, due to inefficiencies and inaccuracies with this archaic program, the rates are often the local union rates and not the prevailing market wage rates.

As a federally-supervised law, Davis-Bacon also requires significant paperwork and reporting.  Many smaller businesses avoid bidding for projects that include Davis Bacon requirements because of the added paperwork and reporting requirements.  Davis-Bacon is an inaccurate, cumbersome system that adds more red tape and bureaucracy to federal contracts and prevents taxpayers from getting the best bargain on federal construction projects by eliminating true competition from the contracting process.

The Republican Study Committee has made repealing Davis-Bacon the first focus of a newly created Repeal Taskforce that will “work to eliminate U.S. federal laws that inhibit, restrict, or are otherwise harmful to the American public.  The taskforce will focus on laws that are unconstitutional, anti-free-enterprise, or otherwise counter to economic, national security, or social conservatism.”  The taskforce will be lead by Rep. Connie Mack (R-Fla.). 

On April 6, 2011 the General Accounting Office (GAO) released a report titled, “Davis-Bacon Act: Methodological Changes Needed to Improve Wage Survey.”  The report concluded Department of Labor's (DOL) current wage survey method results in especially high or low prevailing wages for construction workers.  GAO attributed the findings to several factors: a low number of contractors who respond to surveys; the long periods of time between wage surveys; and methodology for analyzing the surveys' results.  The report revealed that 63% of prevailing wage determinations are based on collectively bargained rates despite the fact less than 14% of construction employees are union members.  Perhaps most alarming was the finding that over 25% of the wage rates were based on six or fewer workers.  The GAO recommended the DOL:

• Amend the requirement that the department issue wage rates by civil subdivision to allow more flexibility; in some cases wage determination could not be made for a county because of insufficient survey responses;
• Obtain expert advice on the survey design and methodology; and
• Improve the transparency of its wage determinations.

Status of Legislation:  Several bills have been introduced over the past few years that would repeal the Davis-Bacon Act.  Last Congress, Representative Steve King (R-Iowa) introduced the Davis-Bacon Repeal Act and has also sponsored repeal amendments. Davis-Bacon repeal legislation has yet to be reintroduced in the 113th Congress.

IEC Position:  IEC supports efforts to repeal this outdated, inefficient law.  IEC supports updating the federal prevailing wage so that accurate wage rates are obtained and the uncertainty and inefficiency is removed from the process.

 

Union-Only Project Labor Agreements

Union-only project labor agreements (PLAs) on federal contracts require that contracts be awarded only to contractors who agree to collective bargaining and union hiring.  Union-only PLAs exclude a majority of the workforce from the opportunity to participate in federally-funded projects. 

On February 6, 2009, President Barack Obama signed Executive Order 13502, which authorizes and encourages the use of union-only project labor agreements (PLAs) on federal construction contracts.  President Obama’s order also repealed President Bush’s Executive Order 13202, which banned PLA’s on federal projects.  On April 13, 2010, the Final Rule implementing Executive Order 13502 was published in the Federal Register.

Union-only PLA proponents argue that the agreements promote fair wages and labor peace through non-strike clauses.  However, Davis-Bacon laws already ensure that the local, usually union, prevailing wage is paid on federal construction projects and merit shop employees do not go on strike.  In reality, these agreements are about forcing merit shop contractors to submit to union rules and hiring halls if they want to bid on projects covered by a union-only PLA. 

PLAs cost the American taxpayer more money by drastically limiting project bids to a small segment of the market that runs union-only shops.  In a time when elected officials in both parties preach the doctrine of fiscal discipline, the expense of PLAs does not seem justified. 

In 2010, according to the Bureau of Labor Statistics, nearly 87% of the construction workforce in the United States did not belong to a labor union.  Not only do union-only PLAs waste taxpayer money, but they prohibit the large majority of the workforce, which has chosen not be a part of a union, from working on projects financed by their tax dollars.

Status of Legislation:  The Government Neutrality in Contracting Act aims to preserve open competition on federal construction projects.  Senator David Vitter (R-La.) introduced the Government Neutrality in Contracting Act (S. 109) on January 23, 2013.  Representative Andy Harris (R-MD) introduced the House counterpart (H.R. 436) on January 29, 2013, and currently has 76 cosponsors.   Specifically, S. 109 and H.R. 436 would “prevent discrimination against Federal Government contractors or their employees based upon labor affiliation or the lack thereof, thereby promoting the economical, nondiscriminatory, and efficient administration and completion of Federal and federally funded or assisted construction projects.”

IEC Position:  IEC supports S. 109 and H.R. 436 and any effort to ensure open competition on federal construction projects.  IEC opposes Executive Order 13502, and any legislation or other efforts that promote union-only PLAs.

  

Estate Tax

The federal estate tax, commonly referred to as the Death Tax, is a tax on the estate of a deceased person.  Essentially, taxpayers are paying double taxes as they build their estate and then again as they pass it on to the next generation.  The Death Tax acts as a major hurdle, if not outright barrier, to passing down family owned small businesses to future generations. 

As part of the 2001 Economic Growth and Tax Relief Act, the threshold amount at which the Death Tax is applied was increased and the tax rate was decreased, with outright repeal of the tax in 2010.  The repeal of the tax was set to sunset after just one year, with the death tax going back into effect at the 2001 levels starting in 2011.  As part of a larger tax package signed into law in December 2010, the death tax was re-instituted for 2011 and 2012 at a top rate of 35% and an exclusion amount of $5 million.  

The threat of the death tax forces families to pay for costly estate planning or possibly even selling some the business’ assets in order to ensure they are able to keep the business in the family.  Permanently repealing the death tax would allow family business owners to focus their resources on growing their business and creating jobs.

Status of Legislation:  Several bills (H.R. 137, H.R. 177) to make repeal of the Death Tax permanent have been introduced in the 113th Congress. 

IEC’s Position: IEC opposes this double taxation and will continue to support efforts to permanently repeal the Death Tax.