April 2025

US Housing Starts See Sharpest Drop in a Year, Driven by Single-Family Slowdown

U.S. housing starts plunged in March, posting their largest monthly decline in a year, as elevated home prices and mortgage rates continued to dampen demand and shake builder confidence.

New home construction dropped 11.4% to an annualized pace of 1.32 million, falling short of the 1.42 million median forecast from Bloomberg’s economist survey. The decline was primarily driven by a sharp pullback in single-family housing starts.

Single-family starts tumbled 14.2% to a 9.40 million annualized rate—marking the steepest monthly drop since the early days of the pandemic. Construction of multifamily units also declined, though the decrease was not as pronounced.

The housing market remains under pressure from persistently high mortgage rates and home prices. Last week, mortgage rates surged to 6.81%, their biggest weekly gain since October. At the same time, tariffs imposed during the Trump administration have driven up material costs, further eroding builder optimism.

Although some price relief has occurred—thanks to builder incentives aimed at moving excess inventory—inventory levels remain elevated, hovering near their highest point since 2007. This surplus has led to a slowdown in construction, with the number of single-family homes under construction falling to its lowest since 2020, continuing a downward trend that began in mid-2022.

Permits for new single-family homes, a key indicator of future construction, also declined to a four-month low, signaling ongoing weakness. In contrast, permits for multifamily dwellings saw a modest increase.

Regionally, the South—America’s most active homebuilding area—recorded a nearly 18% decline in single-family starts. The Northeast and West saw similar softness, while the Midwest experienced a slight rebound after a sharp decline the previous month.

Bloomberg Economics Weighs In:
“Inventory overhang, trade uncertainty, and a slowing economy are likely to keep construction growth subdued throughout the year,” said Stuart Paul, economist at Bloomberg.

Consumer sentiment has also taken a hit. On a recent earnings call, the CEO of homebuilding giant Lennar Corp. noted that rising personal debt levels are making it more difficult for buyers to secure mortgage approvals, adding to the drag on demand.

Despite the slowdown, the housing sector is still expected to make a modest contribution to first-quarter GDP. The Atlanta Fed’s GDPNow model estimates that residential investment will add 0.15 percentage points to growth.

It’s worth noting that housing data can be volatile. The government’s latest report showed a 90% confidence interval ranging from a 24.9% decline to a 2.1% increase in monthly activity.

Separately, a report released April 17 showed a decline in U.S. jobless claims, which fell to a two-month low—an encouraging sign for the broader labor market.

Source: Michael Sasso, Bloomberg Law

Illinois Study Finds PLAs Don’t Raise Construction Costs, Boost Bid Competition

A recent study by the Illinois Economic Policy Institute (ILEPI) found that project labor agreements (PLAs) in Illinois did not lead to higher construction costs—and actually encouraged more bidding competition.

The report, which examined over 2,500 bids across 773 state-funded construction projects worth more than $1.2 billion from 2017 to 2023, showed no statistically significant difference in cost between projects with PLAs and those without, once factors like project size, complexity, location, and type (new construction vs. renovation) were considered.

According to Frank Manzo, ILEPI economist and co-author of the study, this is the most comprehensive research to date on PLAs in state-level construction. “We looked at critical elements—location plays a big role in Illinois—and found that PLAs didn’t inflate costs but did encourage greater competition,” he said.

PLAs and Project Cost Efficiency

Manzo emphasized that the findings support PLAs as a cost-stabilizing tool. The data revealed that PLAs led to a 14% increase in the number of bids received. Each additional bid raised the chance that the final award would come in below the project’s official estimate by 6%.

This counters the widely held assumption that PLAs drive up construction costs or limit bidder pools. Instead, the study positions PLAs as a mechanism for fostering competitive, equitable procurement practices that benefit taxpayers.

Not everyone agrees. Ben Brubeck, vice president of regulatory, labor, and state affairs for the Associated Builders and Contractors, challenged the findings, pointing to other national studies that show PLA-covered projects—especially in education and affordable housing—costing 12% to 20% more on average than those without.

“These claims contradict two decades of experience and feedback from union and nonunion contractors as well as public officials, many of whom report that PLAs limit competition and raise costs,” Brubeck said.

Trends in Bidding Activity

The number of bids on Illinois Capital Development Board projects varied year to year. In 2017, projects averaged 3.3 bids, dropping to 3.1 in 2018. Following the Biden administration’s 2019 executive order encouraging PLAs on major federal projects, the average bids per project rose—reaching 3.9 in 2020 and 3.6 in 2021. However, by 2022 and 2023, the average dipped below 3.

“Projects with PLAs consistently drew more bids,” said Manzo. “That increase in competition helps drive down costs. PLAs allow qualified contractors to compete based on merit—quality, efficiency, and resource management—not just price.”

Boosting Inclusion and Access

The study also highlighted the positive effect of PLAs on awarding contracts to minority-, women-, and veteran-owned businesses. These groups experienced a 1 to 2 percentage point increase in market share on PLA projects.

“This demonstrates that PLAs can help level the playing field and open up public construction opportunities to historically marginalized business owners,” said co-author Robert Bruno, director of labor education at the University of Illinois Urbana-Champaign.

Brubeck, however, argued that diversity can be achieved through targeted procurement policies alone and doesn’t require a PLA framework. “Tying diversity initiatives to PLAs doesn’t change the fact that the majority of diverse contractors operate outside of union networks,” he said.

Conclusion: A Strategic Approach to Project Delivery

The ILEPI report concludes that PLAs can be an effective tool for enhancing competition and workforce diversity without increasing costs. Bruno believes they provide a structured approach to managing large projects with complex labor needs.

“PLAs help attract skilled, reliable contractors,” Bruno said. “They ensure a competitive process and high-quality outcomes across a diverse labor force, without burdening budgets.”

Source: Keith Loria, Construction Dive

 

Strike Risk Rises as Trump Slashes Federal Labor Mediators from 143 to Just Four

The Trump administration has drastically downsized the Federal Mediation and Conciliation Service (FMCS), leaving only four mediators where there were once 143. This sweeping cut threatens the ability of unions and employers to resolve disputes and avoid costly strikes, according to labor experts and agency insiders.

The FMCS, which plays a behind-the-scenes but vital role in smoothing labor relations across the U.S., is now a shell of its former self. Two sources familiar with the situation confirmed the mass layoffs, which stem from a March executive order issued by former President Donald Trump aimed at eliminating several small federal agencies.

In 2023 alone, FMCS supported nearly 2,500 contract talks and handled over 1,200 complex grievance mediations. But with just 15 staff members remaining, including the last four mediators, its capacity to step in during critical labor disputes has been severely diminished.

“These mediators help keep local economies running,” said one longtime FMCS employee, who asked not to be named due to pending termination. “We quietly help people stay at work, even if we never make headlines.”

The executive order mandated cutting FMCS “to the maximum extent,” according to agency documents. The move, critics say, eliminates a cost-effective public service that helps prevent labor strikes and foster stable employer-union relationships.

A Small Agency with a Big Impact

FMCS has often played a pivotal role in high-stakes negotiations—from helping Starbucks and its union Workers United lay the groundwork for contracts at over 500 stores, to aiding in labor talks involving Boeing and major shipping companies. It also helped finalize the first union contract for Apple retail employees.

The agency’s work in fiscal year 2023 included over 2,400 collective bargaining sessions, 1,265 grievance mediations, and 1,500 training programs. It was created under the Taft-Hartley Act of 1947 to serve as a neutral third party in labor disputes, offering mediation, arbitration, and training to unions and employers—most of it at no cost.

Despite having no regulatory or enforcement authority, FMCS has long punched above its weight. It received just $53 million in congressional funding for 2024—less than 0.0015% of the federal budget.

Commissioner Jefferson Dedrick noted in a LinkedIn post that the agency saved the U.S. economy over $500 million annually with its limited resources. “I’m saddened to see such an impactful organization dismantled,” he wrote.

Immediate Fallout

The decision to gut FMCS is already being felt. One of the two mediators working on the Starbucks national agreement was removed from negotiations in late March, said a person close to the talks.

“It’s baffling,” said Wilma Liebman, former FMCS deputy director and ex-chair of the National Labor Relations Board. “This agency offers a huge return on a very small investment. Ending disputes faster saves everyone money and hardship.”

Other federal bodies, such as the NLRB and Department of Labor, are not structured to step in. The NLRB is prohibited from providing mediation, and it’s unclear whether Trump’s new labor secretary, Lori Chavez-DeRemer, will fill the gap left by FMCS.

In the absence of free federal mediation, labor and management will likely have to hire private mediators, which will raise costs and may discourage parties from seeking neutral help at all, said a management-side attorney with a major U.S. law firm.

“This change will hit negotiations hard,” the attorney said. “You’ll see fewer mediators at the table and probably more strikes.”

Wider Public Sector Impact

Public-sector contracts may also be disrupted. Many government agencies are contractually obligated to use FMCS mediators, and its near-elimination could bring critical negotiations to a halt.

According to Cathie McQuiston, deputy general counsel for the American Federation of Government Employees, “For many agencies, the absence of FMCS creates an almost insurmountable obstacle.”

A coalition of 21 states is now suing to block the executive order, arguing that losing FMCS places undue financial and logistical strain on states forced to turn to pricier private options—or risk widespread labor unrest.

“Without FMCS, the chances of costly work stoppages increase significantly,” the lawsuit states.

Source: Parker Purifoy, Bloomberg Law

Fifth Circuit Drops Challenge to Biden’s $15 Minimum Wage for Contractors

A lawsuit brought by three states against the Biden administration’s $15 minimum wage requirement for federal contractors has been dismissed as moot by the Fifth Circuit Court of Appeals.

The New Orleans-based appeals court had previously upheld the mandate in a February ruling. However, the regulation’s foundation—an executive order—was later rescinded by the Trump administration, prompting all parties to agree that the case was no longer relevant.

“Both parties agree that this appeal is moot and that it is appropriate to vacate our panel opinion in this case,” wrote Judges Edith Brown Clement, James Earl Graves Jr., and Irma Carrillo Ramirez in their decision.

The judges sent the case back to the district court, directing it to be dismissed with prejudice.

Originally filed in 2022, the lawsuit by Texas, Louisiana, and Mississippi claimed President Biden overstepped his authority in issuing the wage mandate through executive order. After losing in the panel decision, the states had requested a rehearing by the full Fifth Circuit.

Legal battles over the federal contractor wage hike have produced conflicting outcomes in different circuits. The Ninth Circuit ruled against the administration, while the Tenth Circuit sided with the president’s authority.

Source: Alex Ruoff, Bloomberg Law

Unions Sue DOD and GSA Over Alleged Violation of Biden-Era Construction Labor Order

The Department of Defense (DOD) and the General Services Administration (GSA) are facing a lawsuit accusing them of disregarding a 2022 executive order from President Joe Biden that mandates project labor agreements (PLAs) for major federal construction contracts.

The lawsuit, filed Wednesday in the U.S. District Court for the District of Columbia by North America’s Building Trades Unions (NABTU) and its Baltimore-Washington affiliate, claims the agencies have not only failed to follow the executive order but have actively instructed contracting officers to act against it.

President Biden’s executive order requires that all federal construction projects expected to cost over $35 million include a labor agreement with unions, which sets the employment terms and working conditions for the specific job. The order allows for certain exemptions, such as when a PLA would significantly limit competition by reducing the pool of bidders.

Despite this directive, the DOD and GSA have reportedly issued internal memos advising against the use of PLAs for broad categories of projects, according to the complaint. These memos allegedly direct contracting officers to eliminate PLA requirements from solicitations entirely, without offering proper justification.

Earlier this year, MVL USA Inc. and other construction companies challenged the executive order in the U.S. Court of Federal Claims, arguing it violates the Competition in Contracting Act. The court agreed that the order conflicted with the Act but stopped short of blocking its enforcement. Meanwhile, the U.S. Department of Justice has maintained that the court lacks the authority to overturn the executive order.

Although the order remains in effect and has not been rescinded by any administration, NABTU alleges that the DOD and GSA’s internal guidance has undermined the order’s implementation. According to the unions, this has negatively impacted their ability to negotiate project agreements as they otherwise would have, harming their role in representing over 3 million skilled workers.

The lawsuit argues that the agencies’ actions violate the Administrative Procedure Act by contradicting the executive order without proper explanation or legal basis. NABTU and its affiliates are asking the court to block the enforcement of the memos and ensure compliance with the PLA mandate.

The DOD declined to comment on the matter. A response from the GSA was not immediately available. NABTU is represented by the law firm Sherman Dunn PC.

The case is N. Am.’s Bldg. Trades Unions v. Dep’t of Def., D.D.C., No. 1:25-cv-01070, complaint filed 4/9/25.

Source: Mallory Culhane, Bloomberg Law

March 2025

Trump Axes $15 Contractor Wage, Infastructure Project Orders

 

President Donald Trump has revoked Biden-era executive orders that had increased the minimum wage for federal contractors to $15 and steered federal infrastructure funds toward companies committed to union neutrality.

He also rescinded an order that had instructed federal agencies to encourage their contractors to use registered apprenticeship programs.

These rollbacks, announced late Friday, are part of a broader effort by Trump to undo more than 70 executive orders signed by previous administrations, a process he began on Inauguration Day.

The decision to reverse the contractor wage hike—which took effect for new or renewed federal contracts starting in 2022—follows legal challenges from some companies and Republican-led states. Those lawsuits have had mixed outcomes.

In January, the US Supreme Court declined to weigh in on whether President Joe Biden had the authority under federal procurement law to impose the $15 wage, effectively allowing the mandate to stand.

Last month, the US Court of Appeals for the Fifth Circuit upheld the wage, aligning with the Tenth Circuit but differing from the Ninth Circuit.

Biden’s order, Executive Order 14026, included yearly cost-of-living adjustments, bringing the current minimum wage for federal contractors to $17.75.

‘Good Jobs’ Policy Reversed

Executive Order 14126, which Trump has also nullified, aimed to promote union neutrality and reward companies with equitable pay structures and participation in registered apprenticeship programs.

Business groups had criticized the order, arguing it gave unions an unfair edge in competing for funding under key legislation such as the American Rescue Plan, the Infrastructure Investment and Jobs Act, the CHIPS and Science Act, and the Inflation Reduction Act.

The order instructed agencies to give preference to applicants with project labor agreements or those supporting “voluntary union recognition and neutrality in union organizing.” Programs offering paid leave, job training, child care, and apprenticeships were also given favorable consideration.

By repealing this order, Trump effectively dismantles Biden’s “good jobs” initiative, launched in 2022 to promote better wages and benefits through government funding incentives.

Apprenticeship Focus Rolled Back

Executive Order 14119, another now-canceled directive, had emphasized prioritizing contractors and grant recipients involved in registered apprenticeship programs.

The Biden administration had highlighted these programs, overseen by the US Department of Labor, as a college-alternative path to solid, middle-class employment—offering good pay and benefits without student debt.

However, some employers questioned whether the DOL’s program was the right tool for delivering these opportunities, citing concerns about the complexity and requirements involved in participating.

Source: Rebecca Rainey, Bloomberg Law

US Housing Starts Jump In February, Rebounding From January’s Slump

 

U.S. housing starts surged in February, rebounding strongly after a weather-driven drop in January. The increase was fueled by a notable uptick in single-family home construction, bolstered by builder incentives aimed at attracting buyers.

According to government data released Tuesday, new residential construction climbed 11.2% last month to a seasonally adjusted annual rate of 1.5 million units—surpassing all expectations in a Bloomberg survey of economists.

Single-family housing starts rose 11.4% to an annual rate of 1.11 million, marking the fastest pace in a year. Multifamily construction also gained ground, increasing 10.7% after suffering a sharp decline in January.

The latest numbers reflect a strong recovery in building activity following severe winter storms that disrupted construction across the South and Northeast earlier this year. February saw those regions bounce back, while activity remained steady in the West and declined in the Midwest.

Despite this momentum, homebuilders still face challenges. High borrowing costs and a large inventory of unsold homes continue to weigh on demand. Without a significant drop in mortgage rates or improvements in housing affordability, the homebuilding sector is expected to remain under pressure.

Building permits—a key indicator of future construction—declined 1.2% to an annual rate of 1.46 million in February. Permits for single-family homes edged down 0.2%.

Bloomberg Economics Insight:

“The rebound in February following January’s weather-driven collapse was encouraging, but the decline in permits suggests caution is still warranted,” said Liza Winger. She added that uncertainty over potential tariffs on building materials is casting a shadow on future construction activity.

Builders Offer Incentives Amid High Inventory

With the supply of new homes at its highest since 2007, many builders are using incentives like mortgage rate buydowns—where they cover upfront costs to lower buyers’ interest rates—to entice buyers.

At the same time, builder confidence has dipped. Concerns over possible increases in tariffs on materials such as lumber contributed to a decline in builder sentiment this month, now at its lowest point since last August.

Over the past few years, builders benefited from a tight supply of existing homes for sale. But that advantage is fading as more resale inventory enters the market, and mortgage rates above 6% continue to deter potential buyers. “That dynamic is fading,” Bloomberg Intelligence analyst Drew Reading noted last week.

Meanwhile, the number of homes currently under construction has stabilized near the lowest level seen since 2021, after a year-long decline. Completions also slipped, falling 4% in February to a 1.59 million annualized rate.

It’s worth noting that monthly housing data can be volatile. The government report indicated a 90% confidence range for February’s housing starts, estimating the true change could have ranged from a 4.5% decline to a 26.9% increase.

Source: Michael Sasso, Bloomberg News 

Trump’s PBGC Head Could Reshape Bailout for Union Pension Plans

 

President Donald Trump’s nominee to lead the federal agency overseeing private-sector pension plans is facing growing pressure from Republican lawmakers and business groups to revamp a controversial $90 billion union bailout launched during the Biden administration.

Janet Dhillon, former chair of the US Equal Employment Opportunity Commission, is poised to take over as director of the Pension Benefit Guaranty Corporation (PBGC). The agency, established in 1974, is now in its fourth year of issuing taxpayer-backed aid to deeply underfunded union-run multiemployer pension plans.

This special financial assistance program, part of President Joe Biden’s American Rescue Plan, has become a political flashpoint—especially after a 2023 audit revealed that nearly 70 plans received millions more than they should have, in part because they mistakenly included deceased participants in their applications.

That misstep gives Trump an opening to influence how the bailout money is handled—especially if Dhillon, pending Senate confirmation, takes the helm, according to former PBGC officials.

“The administration can now encourage the agency to revisit these rules and consider adjustments—particularly to prevent overpayments and address employer concerns around withdrawal liability,” said Katherine Kohn, a partner at Thompson Hine LLP and former PBGC attorney.

When the bailout passed narrowly through Congress in 2021, Republicans and some Democrats pushed to include guardrails requiring plans to prepare for future economic shocks. Instead, the final version delivered nearly unrestricted Treasury funding to about 200 union-managed pension plans.

PBGC auditors have since recovered $181.9 million from 43 plans that failed to properly verify participant data with the Social Security Administration’s Death Master File, according to the agency. Audits are ongoing, and more recoveries are expected, said former PBGC Director Gordon Hartogensis, who served under both Trump and Biden.

Withdrawal Liability Battle

A key provision in the PBGC’s rule prohibits employers from counting bailout funds toward their withdrawal liability—the cost they face to exit a multiemployer plan.

In September, bankrupt freight company Yellow Corp. lost its initial challenge against that rule. But in a twist, the company recently secured a partial win in bankruptcy court that may reduce the $540 million liability it initially faced. The outcome could set a precedent for softening withdrawal liability restrictions, said Kohn.

Dhillon, a longtime Republican donor and corporate legal veteran, may be Trump’s best chance to rework the rules under the pretense of fixing the overpayment issue, she added.

“Janet’s extensive general counsel experience in major corporations gives her a unique understanding of compliance from the business side,” said former EEOC Commissioner Victoria Lipnic, who worked alongside Dhillon. “That insight will serve her well at PBGC.”

Hartogensis believes the agency’s auditing efforts are sufficient and sees no reason to alter the existing rule. Still, withdrawal liability remains a critical tool for sustaining traditional pensions—especially as many employers move toward cheaper 401(k) plans.

Defined-benefit pensions still serve key blue-collar industries in battleground regions that will be vital to Trump’s 2024 election strategy, noted Israel Goldowitz, a partner at the Wagner Law Group and former PBGC deputy general counsel.

“This administration’s base includes many workers in swing states who rely on these pensions,” he said.

Source: Austin Ramsey, Bloomberg Law

February 2025

Department of Labor Staff Cuts Raise Concerns Over Enforcement Capabilities

 

Recently, the Department of Labor (DOL) terminated employees across at least six departments, a move that could hinder its ability to conduct inspections and enforce fair pay and safety regulations, according to three sources familiar with the situation.

Federal employees, including those at DOL, also received an email instructing them to submit five bullet points summarizing their work from the past week. Elon Musk, posting on social media, claimed that failure to comply would be considered a resignation. However, responses among DOL staff varied, as some managers provided inconsistent guidance on whether employees were required to respond, according to two department employees who spoke anonymously.

The full extent of the terminations and resignations remains unclear. The agency has not provided details on the number of affected employees or its official stance on the work summary email.

Any reduction in staffing could impact DOL’s ability to uphold labor laws and manage the programs under its jurisdiction, employment attorneys warn.

“The burden on employers will be lighter,” said Betty Graumlich, a management-side attorney and partner at Reed Smith. “We’ll likely see fewer inspections in some areas, except for immigration-related matters.”

The layoffs have affected several divisions, including the Women’s Bureau, Employment and Training Administration, Office of Disability Employment Policy, Mine Safety and Health Administration, Employee Benefits Security Administration, and Bureau of International Labor Affairs, according to three DOL employees who have spoken with their dismissed colleagues.

For workers seeking unpaid overtime wages or reporting unsafe workplace conditions, these cuts could further limit their options, especially as arbitration agreements and collective action waivers continue to restrict legal recourse, according to Catherine Ruckelshaus, general counsel and legal director at the National Employment Law Project.

“This puts even more responsibility on the Department of Labor because, in some cases, they’re the last line of defense in holding employers accountable for minimum wage and overtime laws,” she said.

Limited Options

The White House and the Department of Government Efficiency, led by billionaire Elon Musk, have made efforts to encourage resignations or directly terminate federal employees at a time when critical DOL subagencies were already operating with historically low staffing levels.

As of October, the Wage and Hour Division—which enforces minimum wage, overtime, and child labor laws—had only 650 investigators on staff, the lowest number recorded since at least 2007.

“This signals to employers that accountability will be even weaker than before,” Ruckelshaus said.

However, Graumlich advised employers not to assume compliance requirements will ease entirely, as many states have stricter labor protections than federal law and better-funded enforcement agencies.

“Companies with multi-state workforces must operate under the assumption that local labor laws will apply, and that can be a major compliance challenge,” she said.

Source: Bloomberg BNA, Rebecca Rainey, Construction Labor News

Court Puts Prevailing Wage Lawsuit on Hold for Trump Team’s Review 

 

A federal court in Texas has paused an industry group’s lawsuit challenging a Biden-era rule that revises how wages are determined for workers on federal construction projects. This move signals that the Trump administration’s efforts to cut back federal regulations are already in motion at the US Department of Labor.

Judge James Wesley Hendrix of the US District Court for the Northern District of Texas approved the stay request on Feb. 19. Both sides had sought the pause, citing the need for the new administration’s DOL leadership to evaluate the case and the claims brought against the rule.

The Trump administration is set to provide an update on its stance within 90 days.

The 2023 regulation revised the methodology for establishing “prevailing wages” under the Davis-Bacon Act, which mandates that contractors on certain federal projects pay workers the local wage rate plus fringe benefits. The update broadened the scope of prevailing wage rules to include prefabrication firms, material suppliers, truck drivers, and professional surveyors.

Industry groups have pushed back against the rule, asserting that it drives up costs for small businesses vying for federal contracts. Management-side attorneys and business organizations anticipate that the rule may be scrapped as part of Trump’s broader agenda to deregulate and reduce government intervention.

Last June, Hendrix granted a preliminary injunction sought by the Associated General Contractors of America, temporarily blocking the rule’s expansion to truck drivers and material suppliers. He ruled that the extension was likely unlawful since the Davis-Bacon Act applies only to “mechanics and laborers employed directly on the site of the work.”

Source: Bloomberg BNA, Rebecca Rainey, Construction Labor News

 

Acting NLRB General Counsel Rescinds Biden-Era Labor Policies 

 

The Trump administration’s acting NLRB general counsel has reversed large portions of the agency’s pro-worker enforcement policies established under Biden.

Recently, Acting General Counsel William Cowen rescinded more than two dozen memos issued by former GC Jennifer Abruzzo. These included directives asserting that student-athletes have the right to organize and that noncompete agreements violate federal labor law.

This rescission aligns with a longstanding pattern at the National Labor Relations Board, where shifts in White House control often result in policy reversals. However, this back-and-forth has become more rapid in recent years, with the last two presidents dismissing the NLRB general counsels appointed by their predecessors.

While the agency’s legal division continues operating, the board itself is currently unable to issue rulings. This stems from President Donald Trump’s seemingly unlawful removal of Democratic member Gwynne Wilcox, which left the board without the three-member quorum required for decisions.

Cowen’s directive also revoked Abruzzo’s memos on a range of key issues, such as:

• Pursuing full remedies for workers affected by unfair labor practices;
• Expanding the use of federal court injunctions to safeguard employee rights;
• Promoting legal protections against algorithm-driven workplace monitoring;
• Increasing public access to NLRB case materials; and
• Helping employers navigate the intersection of federal labor law and anti-discrimination statutes.

Additionally, Cowen withdrew Abruzzo’s guidance on applying the NLRB’s pivotal 2023 Cemex Construction Materials Pacific LLC decision, which introduced a new framework aimed at curbing unfair labor practices before union elections.

Regarding Abruzzo’s stance that mandatory anti-union “captive audience” meetings should be deemed illegal, Cowen stated that her guidance is now “irrelevant” due to the NLRB’s ruling formally prohibiting such meetings.

Cowen justified his actions by highlighting the increasing workload faced by the NLRB’s staff.

“Despite the dedication and skill of our team, our case backlog has reached an unsustainable level,” he said. “The hard truth is that trying to do everything at once risks achieving nothing at all.”

Source: Robert Lafolla, Construction Labor News 

JANUARY 2025

2.2 Million Job Gains Keeps US Hiring Engine Running

  

The US economy added 2.2 million jobs in 2024, reflecting a slowdown from the previous year but still demonstrating notable resilience that few experts had anticipated just a year ago. Nonfarm payrolls increased by 1.4% throughout the year, averaging 186,000 net jobs added monthly. While this is quicker than the pre-pandemic pace in 2019, it’s slower compared to the monthly gain of about 250,000 jobs in 2023.

At the start of 2024, many analysts predicted that the post-pandemic recovery would lose momentum, but the US economy has defied those expectations. This continued strength has led investors to reassess predictions for Federal Reserve rate cuts in the coming year, as reducing inflation may be more challenging with a still-strong economy.

“The monthly job growth trend in 2024 mostly mirrored 2023’s gradual cooling, with a few unexpected bright spots along the way,” said Cory Stahle, economist at Indeed Hiring Lab. “Although job gains are slower than a few years ago, they continue to outpace the roughly 100,000 jobs needed monthly to match population growth—offering a promising sign of resilience.”

Health care and social assistance sectors saw the largest increases in jobs, accounting for over 40% of net job growth. Government hiring also contributed significantly, taking up nearly 20% of the total. The rise in health care jobs is largely driven by the aging population, while government employment grew thanks to fiscal spending under the Biden administration. Additionally, the hospitality and construction industries saw job growth, while manufacturing experienced a decline.

By the end of 2024, the federal government employed over 3 million people, or about 1.9% of the civilian workforce, according to the BLS. This number excludes the approximately 1.3 million active-duty military members, who are not typically categorized as employees. Roughly one-fifth of federal workers are with the US Postal Service.

These figures may be revised when the BLS releases its annual employment data adjustments on February 7, along with the first jobs report for 2025. Preliminary estimates from August suggested a reduction of about 818,000 jobs for the 12 months through March 2024.

Source: Alex Tanzi, Construction Labor News

Construction Company Owner Sentenced For Employment Tax Crimes

Source: Bloomberg Law Automation, Construction Labor News 

A Massachusetts construction company owner has been sentenced to 18 months in prison for committing employment tax fraud and for making false statements during an Occupational Safety and Health Administration (OSHA) investigation, the Justice Department announced recently.

Mauricio Baiense, the owner of Contract Framing Builders, orchestrated a scheme in which checks totaling approximately $11 million were drawn from the company’s corporate bank account and issued to entities he controlled, disguised as subcontractors. He instructed others to cash these checks and used the funds to run an “off-the-books” payroll for his employees. Baiense failed to report these wages to the IRS and did not pay the corresponding employment taxes. Additionally, he played a role in preparing a fraudulent tax return that misrepresented the wages paid to his workers.

Baiense also made false statements under oath during an OSHA interview about a fatal workplace accident involving one of his employees, falsely denying that the deceased had worked for his company.

Altogether, his actions resulted in an estimated tax loss of about $2.8 million to the IRS.

NLRB Rules Construction Firm Turn Back on Union is Illegal

Source: Robert Iafolla, Construction Labor News 

A road construction company broke federal labor law by refusing to recognize and negotiate with a union that has represented its employees since at least 1993, according to a ruling by the National Labor Relations Board (NLRB). The NLRB upheld a 2023 decision by an administrative law judge (ALJ) against Rieth-Riley Construction Co., adding to a series of ALJ rulings involving the company in cases stemming from an ongoing dispute with an affiliate of the International Union of Operating Engineers (IUOE) that began more than six years ago.

The disruption in the company’s relationship with the union also led to the NLRB’s 2022 precedent, which allows regional directors to dismiss petitions to decertify unions when there is merit to related unfair labor practice charges. This ruling has played a significant role in hindering Starbucks Corp.’s efforts to remove union representation from some of its coffee shops.

The dispute began in 2018 when the IUOE affiliate withdrew from bargaining with the Michigan Infrastructure and Transportation Association, which represents Rieth-Riley and other road construction firms in Michigan. In the NLRB’s ruling, the board also agreed with the ALJ’s decision that the company committed unfair labor practices by unilaterally implementing wage increases and withholding information that the union had requested.

Union Rule Satisfies Contract Competition Requirement, US Says

Source:  Daniel Seiden, Construction Labor News 

A road construction company broke federal labor law by refusing to recognize and negotiate with a union that has represented its employees since at least 1993, according to a ruling by the National Labor Relations Board (NLRB). On Friday, the NLRB upheld a 2023 decision by an administrative law judge

The US government argued before a federal court that incorporating a project labor agreement (PLA) requirement in multiple federal contract solicitations does not violate the federal law mandate for full and open competition. According to the government, contractors who are able but unwilling to sign a PLA—a pre-hire agreement with a labor union designed to prevent project disruptions—are still eligible to compete. However, their decision not to submit a compliant bid does not imply a lack of fair competition, the government argued in a filing made public recently.

This argument came in response to a legal dispute with several companies, including MVL USA Inc., Harper Construction Co., Environmental Chemical Corp., JCCBG2, and Hensel Phelps Construction Co. These companies are contesting construction contracts worth hundreds of millions of dollars.

For example, Harper Construction claims that the PLA requirement in the US Army Corps of Engineers’ $250 million aircraft hangar construction contract violates the Competition in Contracting Act, arguing it unfairly impacts their ability to submit a competitive bid. However, the government maintains that a contractor’s refusal to agree to the terms of a PLA does not make them “responsible,” as they are not capable of fulfilling the contract as specified. This, the government asserts, does not undermine competition.

The government also pointed out that a solicitation’s ability and experience requirements do not constitute a violation of the competition laws if they still allow all qualified contractors to submit bids. The government cited a prior ruling in Oracle America Inc. v. United States, where the US Court of Appeals for the Federal Circuit upheld a competition despite the agency’s knowledge that only two companies could meet the specific requirements.

In this case, the plaintiffs are still free to bid for contracts under the government’s terms, and their refusal to comply with those terms does not change the fact that all responsible sources are allowed to compete, the government concluded. The court had consolidated the protests in a September 19 order, with the plaintiffs filing motions for judgment on the administrative record on October 25.

Fox Rothschild LLP and Smith Currie Oles LLP represent the plaintiffs.

 

NOVEMBER 2024

Pay Transparency in Illinois begins January 1

Source: Kevin Kleine, Julie Proscia from Amundsen Davis, LLC

Pay transparency laws are regulations that require employers to disclose salary information and are designed to address issues like pay gaps, wage disparities, and overall wage inequality. Laws like this are becoming more common, particularly in the US and parts of Europe.

Illinois’ pay transparency law (HB 3129) take effect on January 1, 2025.

What Information do Employers Disclose?

Beginning on January 1, Illinois employers with 15 or more employees will be required to post the pay scale and benefits for a position on all job postings or disclose this information when requested by an applicant.

HB3129 defines pay scale and benefits as the wage or salary (as well as range, if applicable) and a general description of benefits or other compensation – stock options, bonuses, or other incentives that the employer may offer in good faith.  This includes all health and retirement benefits offered.

Illinois employers can comply with the requirements of HB3129 by providing a link to a public website that discloses pay scales and benefits for a particular position.

Which Positions Must Employers Disclose Pay Scale and Benefit Information?

HB3129 applies to essentially all job positions because it covers positions where an employee will only partially be performing work in Illinois. T even includes remote positions who work outside of Illinois but report to a worksite or supervisor located in the state.

Notice Requirements

HB3129 required employers to notify their current employees of all opportunities for promotion no later than 14 calendar days after the employer makes an external job posting for the promotional opportunity.

How to Manage Expectations

The following are some tips to manage an applicant’s expectations regarding a position’s pay range:

• First, and most importantly, carefully draft job advertisements and related communications. Clearly state on all job postings and in all communications regarding an available position or promotional opportunity that any disclosed pay range is based on neutral factors and criteria like required qualifications, experience, education, skills, training, certifications, etc.
• Second, include a disclaimer on all postings and all related communications that the employer reserved the right to offer the selected candidate an hourly rate or salary at an appropriate level to be set and determined by the employer that is commensurate with the applicant’s qualifications, experience, education, skill, training, certifications, etc.

Pay transparency laws are here to stay and will only become more common as additional states adopt the legislations. Begin this process now, so that your company will be compliant on January 1, 2025.

 

Worker Safety Rules in Danger After Trump Win

By Tre’Vaughn Howard. Bloomberg Construction Labor News. November 7, 2024

The first nationwide proposal to protect workers from high heat and a challenged rule on who can join safety inspectors will most likely be in jeopardy after Donald Trump reclaims the White House.

Legal scholars state that OSHA’s planned heat stress standards will likely be delayed and it’s final “walkaround rule” that allows OSHA inspectors to be accompanied by non-employee representatives may be withdrawn altogether.

Cary Coglianese, an administrative law professor at the University of Philadelphia, said of the ‘walkaround rule’ that we may see “under a Trump administration, even before the court rules, OSHA saying we agree that this rule is something we don’t want to have in place”. Another professor of law noted that it may be difficult for the Trump administration to withdraw the heat standard, but they may attempt to slow it down.

Heat Rule

First proposed in 2021, the heat-stress rule requires employers in a wide range of sectors to implement heat emergency response planning like providing workers drinking water or break areas for outdoor worksites. The rule will either be abandoned or delayed according to Lawrence Halprin, partner at Keller & Heckman, LLP.  He stated that the options “are to develop and adopt a more employer-friendly rule with Congress under the suggestion that it will be subject to a Resolution of Disapproval”.  The rule is on shaky ground and rushing it through before the incoming administration could prevent OSHA from issuing the standard much like what happened in 2001 with Clinton’s push for ergonomics standards.

Walkaround Rule

The OSHA Walkaround rule went into effect in May 2024 and while Coglianese says that Trump wasn’t too successful in removing existing rules in his first term, there is an expectation that there will be fewer new OSHA rules going forward. The US Chamber of Commerce, along with a coalition of business groups, have a pending case against the agency in Texas over this walkaround rule. Halprin expects an appeal by employers if OSHA were to prevail in court; but, if the rule is upheld in its current form, he expects the new administration to “propose to rescind or substantially modify the rule”.

Coglianese also expects that business advocates will seek to prolong the rule’s compliance dates, leading to a scenario where the Department of Labor reconsiders the regulation altogether.

 

Biden’s $15 Minimum Wage Mandate for Contractors Overturned

By Robert Iafolla. Bloomberg Construction Labor. Nov. 5 2024

The Federal Court of Appeals ruled that President Biden lacked the authority to impose a $15 minimum wage mandate for contractors.

The Ninth Circuit vacated the DOL rule implementing Biden’s Executive Order finding that it violated federal law governing agency rulemaking when it overlooked alternatives to the $15 minimum wage mandate. The ruling could limit future presidents’ latitude to set policies for federal contractors.

Attorneys have warned that successful challenges to presidential procurement power could open the door to lawsuits questioning the authority of the Labor Department’s Office of Federal Contract Compliance Programs – created through executive order.  This agency enforces anti-discrimination and affirmative action obligations for federal contractors.

The Biden Administration’s contractor increase drew lawsuits with split decisions. The Tenth Circuit refused to stop the pay requirement while another suit in Texas blocked enforcement of the wage increase.

In the case decided by the Ninth Circuit, the court ruled that Biden did not have the power under the Procurement Act to set a minimum wage requirement for federal contractors. Judge Ryan Nelson wrote for the majority decision that the “Government’s preferred interpretation would wildly expand the President’s authority form other statutes that contain both the ‘carry out’ language and congressional statement of purpose”.

The majority decision turned aside the administration’s argument that the Department of Labor’s (DOL) rule implementing Biden’s order was not subject to review under the Administrative Procedure Act (APA). The majority wrote, “to hold as the Government urges would allow presidential administrations to issue agency regulations that evade the APA-mandated accountability by simply issuing an executive order first”. The court stated that agencies would then be allowed to implement regulations without involvement from the public or deliberation as required under the APA.

Finally, the majority wrote that the DOL failed to meet basic APA requirements by not considering any alternatives to the $15 minimum wage mandate, so the rule must be vacated.

 

Legal And Legislative Report October 2024