OFCCP Publishes Guide on Combatting Harassment in the Construction Industry

The Office of Federal Contract Compliance Programs (OFCCP) has released A Guide to Combatting Harassment in the Construction Industry, a resource designed to help federal construction contractors address harassment at worksites. The guide is in a question-and-answer format, making it accessible and easy to navigate for both contractors and workers.

This guide details the legal responsibilities of contractors to ensure workplaces are free from harassment, as mandated by Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). It explains what constitutes harassment, offers examples, and highlights that unlawful behavior can come from supervisors, coworkers, or third parties, including vendors, clients, and subcontractors.

This guide, to support compliance and create safer workplaces, emphasizes several best practices, including:

• Communicating anti-harassment policies to all personnel.
• Training should be offered that contains examples of harassment and guidance on prevention.
• Posting Equal Employment Opportunity (EEO) policies at job sites.
• Developing and implementing robust complaint and investigation procedures.
• Taking immediate and appropriate action when harassment is reported.

The guide can serve as a tool to support contractors in ensuring compliance and fostering safe, respectful, and equitable workplaces across the construction industry. The guide can be found at: https://www.dol.gov/sites/dolgov/files/OFCCP/Construction/files/OFCCP-Harassment-in-Construction-Guide-508c.pdf 

OFCCP Reinstates Monthly Employment Reports for Federal Construction Contractors

The Office of Federal Contract Compliance Programs (OFCCP) announced reinstating the Monthly Employment Utilization Report (Form CC-257) for federal construction contractors and subcontractors. The first report, covering March 2025, will be due by April 15, 2025, with subsequent reports due monthly by the 15th (or the next business day if the 15th falls on a weekend or holiday).

Key details include:

• The report is required for federally funded construction contracts and subcontracts exceeding $10,000.
• Contractors must report workforce data by race/ethnicity, gender, and trade for each Standard Metropolitan Statistical Area (SMSA) or Economic Area (EA).
• The reports aim to address employment discrimination in construction, enhance OFCCP enforcement and compliance assistance, and allow contractors to monitor and improve equal employment opportunities.

To support compliance, OFCCP has published a Frequently Asked Questions (FAQ) section on its CC-257 Report webpage, addressing common contractor concerns about the new requirements. Additionally, the agency plans to provide further compliance assistance, including a webinar, in early 2025.

The new requirements follow the final approval of Form CC-257 in September 2024 and complement earlier changes to contractor obligations. However, the policy’s future may depend on the decisions of the incoming presidential administration.

Trump Nominates Lori Chavez-DeRemer as Labor Secretary

President-elect Donald Trump has named Rep. Lori Chavez-DeRemer (R-Ore.) his choice for Secretary of Labor. A former one-term congresswoman, Chavez-DeRemer has built a reputation as a pro-labor Republican, co-sponsoring legislation like the Protecting the Right to Organize (PRO) Act to strengthen union rights and expand penalties for labor law violations. Her nomination has been endorsed by major labor groups, including the Teamsters, but has drawn criticism from conservatives for her union-friendly policies.

Chavez-DeRemer, who represented Oregon’s 5th Congressional District, built a reputation for bipartisan collaboration and advocacy for worker rights by supporting bills to strengthen public-sector unions and safeguard workers’ Social Security benefits. Additionally, she emphasized apprenticeship programs and workforce development, showing her commitment to improving opportunities for American workers.

Her nomination signals a potential shift in the Trump administration’s approach to labor policy, emphasizing workforce development and labor-management cooperation. The confirmation process will determine how her leadership will shape labor relations and business practices.

If confirmed, Chavez-DeRemer could shift the Department of Labor toward expanded training programs. With ongoing legal challenges to Biden-era overtime and contractor wages regulations, Chavez-DeRemer’s stance on defending or revising these rules will be closely monitored.

Court Strikes Down DOL’s Overtime Salary Threshold Rule

The U.S. District Court for the Eastern District of Texas recently invalidated the Department of Labor’s (DOL) final rule that increased overtime exemption salary thresholds under the Fair Labor Standards Act (FLSA). The court ruled that the regulation exceeded the agency’s statutory authority. The decision nullifies the salary threshold increase that took effect in July 2024 and the planned increase for January 2025. The nationwide ruling reverts the threshold to $684 per week ($35,568 annually) and $107,432 annually for highly compensated employees.

The court determined that the DOL’s rule improperly emphasized salary thresholds, effectively overshadowing the requirement to evaluate whether employees perform exempt duties. This ruling aligns with a Fifth Circuit Court decision limiting the DOL’s authority to set salary thresholds that “replace or swallow” statutory exemptions. The now-vacated rule raised the salary threshold to $844 per week ($43,888 annually) on July 1, 2024, with a planned increase to $1,128 per week ($58,656 annually) on January 1, 2025.

For now, employers are no longer required to adjust salaries to meet the previously planned increases under the vacated DOL rule. However, reviewing current pay practices and evaluating the potential reinstatement of exempt status for employees affected by the July 2024 changes is essential. Employers should consult legal counsel to ensure compliance with wage laws, especially in states with stricter requirements.

The DOL may appeal the decision, but with the impending presidential transition in January 2025, the likelihood of the rule being reinstated appears low. Employers should monitor further developments and adjust their compliance strategies accordingly.

USDOL Publishes AI Principles to Protect Workers

The U.S. Department of Labor (USDOL) has introduced a set of principles and best practices to guide employers and AI developers in safeguarding workers’ rights and well-being amidst the rapid adoption of artificial intelligence. Directed by President Biden’s executive order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, the guidance outlines how AI can be ethically and transparently integrated into workplaces, ensuring that both businesses and employees benefit from technological advances.

The guidelines highlight several essential principles, with a primary focus on empowering workers. This involves including workers in designing and implementing AI systems that impact their roles. Ethical development is also prioritized, ensuring AI systems are created with solid safety measures and anti-bias standards. Furthermore, transparency in AI usage is vital; companies should inform workers about AI applications, mainly when they influence employment decisions.

Other principles include ensuring data responsibility, whereby employers are urged to collect only necessary data, protect it diligently, and avoid sharing it without explicit consent. The DOL also advocates for support during transitions in cases where AI may replace specific roles, recommending that employers provide retraining or alternate positions for affected workers.

The guidance underscores the potential of AI to improve job quality, enhance safety, and promote equitable practices in the workplace, but it warns against its unchecked use. With these guidelines, the DOL aims to help employers and developers navigate AI integration responsibly, balancing innovation with the rights and protections of American workers.

You can see a copy of the guide here; https://www.dol.gov/sites/dolgov/files/general/ai/AI-Principles-Best-Practices.pdf

Prevailing Wage Seminars: Compliance Training Dates Announced for FY25

The U.S. Department of Labor’s Wage and Hour Division (WDH) offers free compliance seminars to help contracting agencies, contractors, unions, workers, and other stakeholders understand the requirements for paying prevailing wages on federally funded construction and service contracts.

These seminars continue the Department’s efforts to increase awareness and improve compliance with federal labor standards, offering stakeholders an opportunity to stay informed and ensure compliance with federal wage regulations.

New seminar Dates, which will begin at 11:00 EST and run until 5:30 EST, are:

• November 13-14, 2024
• March 18-19, 2025
• June 25-26, 2025
• September 24-25, 2025

The two-day seminars will cover the labor standards protections outlined in the Davis-Bacon Act (DBA) and the Service Contract Act (SCA), including how the Department sets and administers prevailing wages. In addition, conference participants will learn about the following:

• Executive Order 13495, “Nondisplacement of Qualified Workers”
• Executive Order 13658, “Establishing a Minimum Wage for Contractors”
• Executive Order 14026, “Increasing the Minimum Wage for Federal Contractors”
• The process of obtaining wage determinations and adding classifications
• Compliance assistance and enforcement processes
• The process for appealing wage rates, coverage, and compliance determinations

Participants can attend sessions on both days or select sessions most relevant to their interests. The first day will focus primarily on DBA compliance, while the second will cover the SCA.

Although the seminars are free, registration is required at: https://www.dol.gov/agencies/whd/government-contracts/construction/seminars. Registered participants will receive additional details and a link to attend the online workshops.

For more information on prevailing wage compliance, the WHD has also updated its video library with resources on the DBA, the SCA, and the relevant executive orders.

OFCCP Revises Scheduling Letter for Federal Construction Contractors

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued a revised Construction Scheduling Letter, effective October 1, 2024. This letter will impact federal and federally assisted construction contractors and subcontractors through July 31, 2027. OFCCP says that the revised letter offers improved clarity and more efficient data requests, but others say it increases contractors’ reporting burden.

Contractors must provide payroll data beyond base pay and report details on employee lay-offs. Contractors must also disclose the use of technology-based tools such as artificial intelligence, algorithms, or automated systems. For companies with direct federal contracts, additional requirements related to Section 503 (addressing individuals with disabilities) and VEVRAA (for protected veterans) can apply.

The new scheduling letter applies to contractors undergoing construction compliance reviews on or after October 1, 2024. A copy of the Scheduling Letter can be found at: https://www.dol.gov/sites/dolgov/files/OFCCP/FCCM/Construction%20Scheduling%20Letter%20Effective%20Oct%201%202024%20508c.pdf

Understanding the Davis-Bacon Act and Its Role Under DOE Loan Programs

The U.S. Department of Energy (DOE) Loan Programs Office (LPO) released a guide earlier this year to explain how LPO financing programs are subject to Davis-Bacon labor standards, the Davis-Bacon requirements that apply, and a summary of those requirements.

The Davis-Bacon Act (DBA), enacted in 1931, sets the standard for contractors and subcontractors working on federally funded construction projects exceeding $2,000. The Davis-Bacon and Related Acts (DBRA) apply these requirements to projects financed by the federal government.

Projects financed by LPO must comply with DBRA. This requirement includes most projects, though some, like those under specific programs such as the Tribal Energy Finance Program, may follow different guidelines unless they opt into tax benefits under the Inflation Reduction Act (IRA), where prevailing wage compliance is required.

The Inflation Reduction Act links tax incentives to prevailing wage standards, drawing a clear connection between these two laws. This connection means contractors must adhere to wage decisions determined by geographic location and construction classification, ensuring wages reflect local economies.

By tying tax incentives under the IRA to Davis-Bacon wage standards, contractors must prioritize fair wages in their planning to qualify for benefits. This balance ensures that projects under the Inflation Reduction Act support the workforce and sustainability initiatives.

The LPO Davis-Bacon guide can be found at: https://www.energy.gov/lpo/articles/ensuring-prevailing-wages-closer-look-davis-bacon-act

SBA Proposes Changes to Size Recertification Rules Could Impact Federal Contractors

The Small Business Administration (SBA) proposed new regulations that could significantly impact federal contractors in small business programs.

The proposed changes aim to standardize size recertification requirements, potentially impacting small businesses involved in mergers, acquisitions, or capital infusions.

Key provisions include:

1. Consolidation of Regulations:

• The SBA plans to create a unified set of size recertification rules under 13 CFR 125.12, replacing the current program-specific requirements for more consistency across all SBA programs.

2. Size Determination Exceptions:

• Triggering Events: Mergers, acquisitions, or novations would require recertification. If a business can no longer be certified as small, it becomes ineligible for future set-aside orders under multiple award contracts (MACs) but can still compete for unrestricted orders.
• GSA Federal Supply Schedule (FSS) Contracts: Size would be determined at the date of the triggering event or recertification request for set-aside orders, eliminating the current exception for FSS contracts.
• 8(a) Sole-Source Awards: Businesses must qualify as small at the initial offer date for each order, regardless of the underlying contract type.

3. Impact on Contractors:

• Eligibility Risks: Contractors may lose eligibility for set-aside contracts if certain events lead to disqualification. This is a change from the current rule where size status is maintained for the contract’s duration unless recertification is requested.
• Early Affiliation Concerns: Preliminary agreements between two firms could trigger early affiliation with the large business, potentially disqualifying a business from small business contracts before an actual transaction.

4. Updates to HUBZone and Other Small Business Programs:

• The proposed changes aim to refine eligibility criteria for the Historically Underutilized Business Zone (HUBZone), Women-Owned Small Business (WOSB), and Veteran Small Business Certification (VetCert) programs and standardize recertification rules to ensure uniform application and reduce confusion for businesses holding multiple certifications.

These changes may discourage small businesses, contractors, and investors from engaging in transactions that could trigger disqualifying recertifications. Federal contractors should review the proposed rule, which could impact their eligibility for future contracts. Comments on the proposed rule are due by October 7, 2024.

SECURE 2.0 mandatory Auto Enrollment and Auto Escalation changes are coming in 2025. Are You Prepared?

The Secure Act 2.0 mandates Auto Enrollment and Auto Escalation starting January 1, 2025. Here’s what Plan Sponsors need to know and how The Contractors Plan will help clients prepare.

What to Expect

Automatic Enrollment:
Beginning in 2025, 401(k) plans that meet certain criteria must include an automatic enrollment feature. This means that all eligible employees who are not currently deferring must be automatically enrolled in the retirement plan at a minimum deferral rate of 3% of their eligible compensation. This feature of SECURE 2.0 encourages higher participation rates in retirement savings programs by reducing the barrier to entry for employees and makes it easier for employees to start saving for retirement without taking initial action. Employees can opt out of deferring at any time. If participants choose to opt-out prior to 90 days from the first auto-deferral contribution, they may request a refund of those deferral contributions.

Automatic Escalation:
In addition to automatic enrollment, these plans must also include an automatic escalation feature. Each year, the deferral rate will automatically increase by 1% until it reaches at least 10% (but not more than 15%). This gradual increase helps employees build their retirement savings over time without needing to make ongoing decisions about their contribution rates. By steadily increasing the contribution rate, employees can enhance their savings potential, helping to secure a more robust retirement fund. Employees can opt out of auto escalation at any time.

Next Steps:

Determine if your Plan is Impacted. The Contractors Plan will consider all 401(k) plans established after December 29, 2022, as subject to the mandatory Automatic Enrollment and Automatic Escalation provision of Secure 2.0 unless the plan sponsor can claim an exemption based on the criteria and conditions below. Based on the client information on file, The Contractors Plan will be directly contacting clients to confirm your plan is impacted or if your plan meets the conditions for an exemption.

*Note that once your plan no longer meets any of the exemption criteria, it is immediately subject to these provisions.

Review and Update Plan Documents:
The Contractors Plan will provide impacted clients with the final amendments to reflect the new automatic enrollment and escalation requirements in 2025. This step is crucial for compliance and for avoiding potential penalties. Until these amendments are available, the plan is permitted to operate without them in good faith.

Communicate Changes:
Clearly communicate these changes to your employees so they are prepared for the new automatic enrollment process. Transparency will help employees understand how these changes will affect their paychecks and retirement savings. The Contractors Plan will provide employers with materials to distribute to employees relating to this requirement.

Implement Administrative Adjustments:
Ensure your payroll vendor is able to make any changes necessary to implement auto enrollment and auto escalation. The Contractors Plan provides an easy-to-use online deferral process that allows your employees to make elective deferral changes, including an opportunity to opt-out of the mandatory auto-deferrals. Consider moving to this process to reduce your administrative burden and streamline the process for your employees.

By proactively addressing these changes, employers can ensure compliance with the new rules and help their employees achieve greater retirement readiness. If you aren’t sure if your plan falls within these new guidelines, please contact us.

The Contractors Plan understands the unique challenges that Davis-Bacon and Service Contract Act contractors face when creating and managing a bona fide employee benefits plan. We specialize in prevailing wage retirement, major medical, specialty benefits, compliance and more. We’ve assembled our knowledge into a flexible, easy-to-use solution that offers great benefit options for your employees.

For over 40 years, The Contractors Plan has designed and administered healthcare, retirement, and specialty benefits programs for government contractors.  Our products and services help employers save money, reduce their workload, and stay compliant with local and federal government mandates and regulations.

When offering employee benefits products through The Contractors Plan, you gain the administrative solutions that make working with prevailing wage contractors possible. Our powerful eligibility management process is designed specifically for government contractors, so you can reduce your workload and keep winning jobs.