Capitol Update – 10/04/2021
Initial jobless claims unexpectedly rise to 362,000
The number of Americans filing for first-time unemployment benefits rose to 362,000 in the week ended Sept. 25, according to the Labor Department. Analysts surveyed by Refinitiv were expecting the number of first-time filings to decline to 335,000.
Report: Labor, material shortages worsen in Q3
More than half of contractors say they’re struggling hard to find skilled construction workers as more than 9 in 10 experience at least some difficulty, according to the US Chamber of Commerce’s third-quarter Commercial Construction Index. Roughly 4 in 10 contractors have turned down work as the labor crunch worsens and as material shortages persist. U.S. Chamber of Commerce
Federal contractors, subs to be vaccinated by Dec. 8
Federal contractors must be fully vaccinated against COVID-19 by Dec. 8, the Biden administration said Friday. The new guidance details how agencies and federal contractors should comply with President Joe Biden’s Sept. 9 executive order. They will apply to all covered contractor employees, including “contractor or subcontractor employees in covered contractor workplaces who are not working on a federal government contract or contract-like instrument,” the guidance reads. Associated Builders and Contractors said that although vaccinations are important for the construction workforce, the new regulations will add to already overburdened contractors. “Based on our initial reading, this guidance will result in additional compliance burdens, exacerbate the construction industry’s skilled workforce shortage and increase costs for federal contractors and taxpayers,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs, in a statement.
Federal Contractor Vaccine Mandate Guidance Released
On Sept. 24, the Safer Federal Workplace Task Force issued guidance to help implement the president’s executive order calling for a broad vaccination mandate for direct federal contractors (i.e., prime and subcontractors that work on contracts directly for federal agencies, and not contractors working on state department of transportation federal-aid highway contracts or federal grant contracts). The guidance puts forth many questions without clear answers, including but not limited to how the mandate will be enforced and employer liabilities stemming from the mandate; the precise (but clearly broad) applicability of the mandate to federal contractors’ employees, whether or not they are working directly in connection with a federal contract; and whether there will be provisions for testing employees who do not meet accommodation exemptions. As it stands, the Federal Acquisition Regulation (FAR) Council is expected to release on October 8 an interim contracts clause that agencies could include in new solicitations and contracts (including new task orders on IDIQ contracts) as early as October 15. AGC has retained outside legal counsel–and is in touch with some of the brightest legal minds within the industry–to review viable legal options. AGC, however, cannot completely conduct such a review until the FAR Council issues a contracts clause, which, as opposed to the recent guidance, is legally binding and authoritative. The association has also spoken with the White House Office of Management and Budget (OMB), and key federal owner agencies to explain the significant issues this mandate will have on the ability of the federal government to meet its construction needs, among other things.
Infrastructure bill promotes One Federal Decision
Federal permitting for major construction projects can drag on for decades, but a little-noticed provision in the infrastructure bill addresses this problem, write Jeffrey Rosen and DJ Gribbin. Fifteen pages of the massive bill describe a process called One Federal Decision that promises to shorten permit processing to two years. The Hill
Financing outlook optimistic for Calif.-Las Vegas rail
Brightline Holdings expects to firm up funding plans within six months for an $8 billion Las Vegas-to-Southern California rail line, and a bipartisan infrastructure bill would help, said CEO Michael Reininger. Parent company Fortress Investment Group last year downsized and then abandoned a planned bond sale for the project amid growing investor concerns over the effects of the pandemic. BNN Bloomberg (Canada)
New plans sketch out timeline for California Northstate hospital in Natomas
New plans filed with the city of Sacramento lay out a plan for construction of the California Northstate University teaching hospital on part of the closed Sleep Train Arena site in North Natomas. The plans filed with the city sketch out more details for a proposed California Northstate University teaching hospital and campus — and suggest the project is a matter of months away from beginning construction.
Report: P3 megaprojects often lose money for contractors
Timed to the $1 trillion infrastructure bill advancing in the House, a new study takes a look at the pros and cons of different delivery methods for extremely large civil projects. The study, which has not yet been published, found that public-private partnerships (P3s) have proven to be the most money-losing procurement method for design-build contractors. The study from insurance company Travelers examined 224 heavy civil building projects between 2004 and 2020 that had contract values between $250 million and $2 billion. They encompassed bridge, highway, rail, tunnel and other large-scale civil work, and most were projects on which Travelers had been the surety or co-surety. Over the past 15 years infrastructure projects greater than $250 million in contract value — especially bridge, highway and transit work — have been the public construction industry’s worst-performing segment for contractors, the study found.
Study: Contractors embrace hybrid work
Since the COVID-19 pandemic began, companies across the country have pivoted to hybrid working models — part in-person and part remote — and according to new data, construction is adopting this trend, too. Construction tech company OpenSpace surveyed its customers about their working models and found that prior to the pandemic, 52% of respondents said their field teams had never worked remotely but now, 92% say that they will allow occasional or frequent remote work. In addition, 95% noted that technology was very or critically important in their decision to continue allowing remote work. Respondents hailed from a wide range of firms, including general contractors, subcontractors and developers, according to OpenSpace, a San Francisco-based maker of artificial intelligence-driven technology that captures and analyzes construction site data.
Stopgap funding bill includes post-disaster relief aid
Congress included $29 billion for disaster recovery and $5.7 billion for the US Army Corps of Engineers civil works program as it took steps to briefly avoid a federal government shutdown. The continuing resolution also includes funding to help states conduct emergency repairs to highways and bridges, but the ultimate reauthorization of federal highway and transit programs is part of the $1.2 trillion infrastructure bill that remains stuck in the House. Full Story: Engineering News-Record (tiered subscription model), Transport Topics/The Associated Press
Calif. to help fund Pajaro River levee system rebuild
California Gov. Gavin Newsom has signed legislation that will lessen the financial burden for local governments involved in the roughly $400 million rebuild of the Pajaro River levee system. The rebuild is intended to bring 100-year flood protection, according to state Sen. John Laird, who authored the bill. Santa Cruz Sentinel (Calif.)
$954M in federal grants aimed at medical construction
Improved health care infrastructure and equity are the objective for roughly $954 million in Department of Health and Human Services grants distributed to nearly 1,300 health centers across the US. The funding under the American Rescue Plan Act is focused on constructing and renovating facilities to serve medically needy patient populations struggling with the pandemic. FierceHealthcare
SB 572 Authorizes Labor Commissioner Enforcement of Wage Liens With Property Lien
On September 27, 2021, Governor Gavin Newsom signed into law Senate Bill 572 by Sen. Robert Hertzberg (D-Los Angeles), dealing with enforcement of wage liens against employers. The bill adds Section 90.8 to the Labor Code as an alternative to judgment liens assessed by the California Labor Commissioner. The bill grants authority to the Labor Commissioner to create a lien on real property in order to secure a final amount due to the Labor Commissioner’s Bureau of Field Enforcement (BOFE) division.
These amounts can be assessed through Labor Commissioner citations, findings, or decisions. The amounts are subject to the real property lien once they become final and may be entered as a judgment. This new lien on real property may be created by the Labor Commissioner by recording a certificate of lien with the county recorder in which the party has real property. As a result, the lien could attach to all interests in that real property. The county recorder is required to accept and record the lien certificate.
Only upon payment of the amount due must the Labor Commissioner issue a certificate of release, which is recorded by any person at the person’s expense. Finally, the bill provides that, unless the lien is satisfied or released, a lien under this new section of law would continue until 10 years from the date of its creation. Moreover, the lien may be renewed for additional periods of 10 years by recording a renewal of certificate of lien or a copy of the renewed judgment at any time prior to its expiration.
AB 1003 Creates a New Offense for the Intentional Theft of Wages by an Employer
On September 27, 2021, Governor Gavin Newsom signed into law Assembly Bill 1003 by Assemblywoman Lorena Gonzalez (D-San Diego), relating to wage theft. AB 1003 adds Section 487m to the California Penal Code to specify criminal penalties for wage theft by an employer.
Section One of the bill specifies that the intentional theft of wages in an amount above $950 from any single employee, or $2,350 in the aggregate from two or more employees, by an employer in any consecutive 12-month period may be punished as grand theft under state law.
The new law defines the phrase “theft of wages” as the “intentional deprivation of wages, gratuities, benefits, or other compensation by unlawful means and with the knowledge that the wages, gratuities, benefits, or other compensation is due to the employee. Under this new provision of the Penal Code, the term “employee” includes an independent contractor. The term “employer” includes the hiring entity of an independent contractor.
In addition, this new criminal law provides that the wages, gratuities, benefits, or other compensation may be recovered as restitution, but the new provision of law does not prohibit the employee or the Labor Commissioner from commencing a civil action to seek remedies provided for under the Labor Code.
Finally, the bill specifies that this new section of the Penal Code does not constitute a change in, and does not expand or limit the scope of conduct prohibited by Penal Code Section 487. The law takes effect on January 1, 2022.
Governor Signs AB 1033 – Family Leave
On September 27, 2021, Governor Newsom signed Assembly Bill 1033 (AB 1033), which provides that employers must grant eligible employees up to 12 weeks of job-protected time off from work annually for the purposes of providing care to a parent-in-law with a serious medical condition under the California Family Rights Act (CFRA).
The bill also modifies procedural aspects of the Department of Fair Employment and Housing’s (DFEH) pilot program for mediating family leave disputes between small businesses and their employees. When a small business employee requests an immediate right-to-sue letter based on an alleged CFRA violation, that employee must inform DFEH’s mediation program of the employee’s intent to file a civil action in court prior to filing that action. The bill also sets forth other requirements for completion of the DFEH mediation program prior to an employee’s claim proceeding to a civil court.
This legislation goes into effect on January 1, 2022.
Governor Gavin Newsom signed AB 1561, UCON-sponsored legislation.
AB 1561 extends vital protections for the construction industry and material suppliers under AB 5 (Dynamex) provisions. The bill would extend the laws secured in AB 5 (Dynamex), allowing materials to be delivered to job sites by independent truckers. AB 1561 extends the sunset on the crucial construction trucking safe harbor provided for in AB 5.
Mark Smith
Advocate
California Builders Alliance
5370 Elvas Avenue ǀ Sacramento, CA 95819
Cell: 916.335.5072
Email: mark.smith@calbuilders.org