September 2017

Contractors Must Be in Compliance with OSHA Silica Rule by Sept. 23

Construction contractors with more than 10 employees have until Sept. 23 to comply with OSHA’s final rule (http://bit.ly/1WZOnFf) regulating employee exposure to respirable crystalline silica. Under a rule issued by OSHA on March 25, 2016, construction employers must comply with all requirements of the standard by Sept. 23, 2017, except requirements for laboratory evaluation of exposure samples, which begin on June 23, 2018. The rule requires construction employers to limit worker exposure to silica and to take other steps to protect workers.

Crystalline silica is a common mineral found in many naturally occurring materials and used at construction sites. Inhaling very small crystalline silica particles can cause multiple diseases, including silicosis, lung cancer, chronic obstructive pulmonary disease and kidney disease. Respirable silica is generated by high-energy operations like cutting, sawing, grinding, drilling and crushing stone, rock, concrete, brick, block and mortar. Activities such as abrasive blasting with sand; sawing brick or concrete; sanding or drilling into concrete walls; grinding mortar; and cutting or crushing stone generate respirable dust. Under the OSHA standard, construction employers can either use a control method, as laid out in Table 1 of the standard, or they can measure workers’ exposure to silica and independently decide which dust controls work best to limit exposures to the permissible exposure limit in their workplaces. Regardless of which exposure control method is used, all construction employers covered by the standard are required to:

• Reduce the permissible exposure limit for respirable silica to 50 micrograms per cubic meter of air, averaged over an eight-hour shift.
• Use engineering controls, such as water or ventilation, to limit worker exposure to the PEL.
• Provide respirators when engineering controls cannot adequately limit exposure.
• Establish and implement a written exposure control plan that identifies tasks that involve exposure and methods used to protect workers, including procedures to restrict access to work areas where high exposures may occur.
• Designate a competent person to implement the written exposure control plan.
• Restrict housekeeping practices that expose workers to silica where feasible alternatives are available.
• Offer medical exams, including chest X-rays and lung function tests, every three years for workers who are required by the standard to wear a respirator for 30 or more days per year.
• Train workers on work operations that result in silica exposure and ways to limit exposure.
• Keep records of workers’ silica exposure and medical exams.

ASA, in collaboration with 22 other construction associations, has initiated a lawsuit to prevent OSHA from implementing its rule. In addition, ASA, as part of the Construction Industry Safety Coalition, has filed a petition with OSHA requesting the agency to stay and reopen the rulemaking. In the meantime, ASA urges construction employers to take steps to be in compliance by the OSHA deadline.

For more information, see the ASA Fact Sheet on OSHA’s Rule on Respirable Crystalline Silica (http://bit.ly/1MBCrJp), the ASA Frequently Asked Questions on the OSHA Standard on Respirable Crystalline Silica (http://bit.ly/1MB0UOX), and the free ASA video-on-demand, “OSHA Silica Rule—Applications for Subcontractors (http://bit.ly/2lmJfTq)” (Item #8101), presented by Gary Visscher, Esq., Law Office of Adele L. Abrams, P.C.

Crane Operator Certification: Two Months and Counting

“Employers have only two months to ensure their crane operators are certified according to OSHA requirements,” ASA Chief Advocacy Officer E. Colette Nelson reminded subcontractors.

The Occupational Safety and Health Administration published a rule on Aug. 9, 2010, that requires employers to ensure that crane and derrick equipment is in safe operating condition via required inspections and that employees in the work zone are trained to recognize hazards associated with the use of the equipment and any related duties that they are assigned to perform.

The rule takes effect on Nov. 10, 2017.

Who needs to be certified or qualified? Any person engaged in a construction activity that is operating a crane covered by the cranes and derricks rule, except: sideboom cranes, derricks, equipment with a rated hoisting/lifting capacity of 2,000 pounds or less. (Operators of the listed equipment must meet the criteria for minimum expertise described elsewhere in OSHA rules.)

Are operators of digger derricks required to be qualified or certified? Yes, unless the digger derrick is being used to auger holes for poles carrying electric or telecommunication lines, place or remove the poles, or handle associated materials to be installed on or removed from the poles.

What is required in the testing for certification? Certification has two parts: (1) A written examination that includes the safe operating procedures for the particular type of equipment the applicant will be operating and technical understanding of the subject matter criteria required in the rules. (2) A practical exam showing the applicant has the skills needed to safely operate the equipment, including, among other skills, the ability to properly use load chart information and recognize items required in the shift inspection.

Does an operator need more than one certification? With respect to certification from an accredited testing organization, an operator must be certified for the type and capacity of crane he or she is going to operate. Each accredited testing organization develops its own categories for crane type and capacity.

How is an operator certified or qualified? There are four ways that an equipment operator can be qualified or certified to meet OSHA requirements:

1. A certificate from an accredited crane operator testing organization.
2. Qualification from the employer through an audited employer program.
3. Qualification by the U.S. Military (only applies to employees of the Department of Defense or Armed Forces and does not include private contractors).
4. Licensing by a state or local government (if that licensing meets the minimum requirements set forth by OSHA). When a state or local government requires a crane operator license, the crane operator must be licensed accordingly to meet OSHA requirements.

See OSHA’s Web site on Cranes and Derricks in Construction (http://bit.ly/2fvDJKq) for more information.

What’s Really Going on with Federal Tax Reform?

As the Senate rushed through a series of votes on healthcare reform, the White House and the Congressional Republican leadership issued a joint statement (http://bit.ly/2u54UPi) setting forth the key principles that they have agreed upon for tax reform. Perhaps the big news in the announcement is an agreement not to pursue the introduction of a border adjustment tax. “Without the savings that would have been generated by healthcare reform and the $1 trillion in new revenue projected from BAT, Republicans will need to make some hard decisions on how to proceed,” reports ASA Chief Advocacy Officer E. Colette Nelson. She set forth three options:

1. An alternative revenue raiser to offset the cost of tax cuts. House Ways and Means Committee Chair Kevin Brady (R-Texas) has made it clear that he sees no low-hanging fruit that could be plucked to generate significant revenue. Indeed, the lack of alternative revenue raising options is the reason that House Speaker Paul Ryan (D-Wis.) continued to back the BAT for so long despite its controversy. Absent a major new source of tax revenue, the only alternative to make the bill anywhere close to tax neutral is to chip away at tax credits and deductions.
2. Smaller tax cuts than promised. According to estimates, under the current tax reform proposal but without the revenue raised by the BAT, the lowest the corporate rate could go while keeping things revenue neutral would be somewhere between 26 percent and 28 percent. The House’s latest proposal calls for a 20 percent corporate rate; President Trump has called for a 15 percent corporate rate.
3. Enact bigger cuts on a temporary basis. Because Republicans are trying to pass tax reform through reconciliation, any tax cuts must be offset by revenue in order to be permanent. If provisions increase the budget deficit, they will sunset at the end of the budget window, which currently is 10 years. There has been some talk about the option of extending the budget window. However, that would be an unusual move and still wouldn’t change the fact that the provisions would ultimately sunset.

The Republican leadership stated that they “are confident that a shared vision for tax reform exists, and are prepared for the two committees to take the lead and begin producing legislation for the President to sign.” Nonetheless, as they did with healthcare reform, the Republican leadership is hammering out the details behind closed doors without input from other legislators. In the meantime, ASA, in collaboration with the Small Business Legislative Council, submitted recommendations to the Senate Finance Committee, which among other things:

1. Urged Congress to pursue greater parity in the tax rates for pass-through entities and C corporations while avoiding providing an opening for complex rules and systems.
2. Advocated for the preservation of the business interest deduction.
3. Stated support for immediate expensing.
4. Encouraged Congress to maintain the step-up in basis while repealing the estate tax.
5. Pushed for the preservation of deductions for health insurance premiums and retirement plan contributions.

DOL Requests Information Regarding Overtime Exemptions Under FLSA

The Wage and Hour Division of the U.S. Department of Labor published a Request for Information (http://bit.ly/2ftzcd6) regarding overtime regulations under the Fair Labor Standards Act. DOL invited comments on the 2016 revisions to the “white collar” exemption in the FLSA, including whether the standard salary level set effectively identifies the employees who should be exempt, or whether there should be a different methodology used to set the standard salary threshold.

DOL also is seeking feedback on whether small entities encountered any unique challenges posed by this rule, and if they faced any economic and non-economic impacts.

Under the FLSA, most workers are entitled to minimum wage and overtime pay for hours worked over 40 hours. However, there is a “white collar” exemption in the FLSA for certain executive, administrative, professional, outside sales and computer employees; qualifying for this exemption requires that these employees earn no less than a standard salary threshold and other criteria.

In May 2016, DOL finalized a rule that changes the standard salary threshold for this exemption, from $23,660 to $47,476. In November 2016, the rule was enjoined by a federal court before it became effective. Interested parties can submit comments at www.regulations.gov, the federal government’s regulation portal, on or before Sept. 25.

ASA and SBLC Call for Tax Reform to Preserve Retirement Plan System

ASA, in conjunction with the Small Business Legislative Council, submitted comments to the Senate Finance Committee that call for preserving the small business retirement plan system as part of planned tax code overhaul.

“Most small business owners are motivated to establish plans, and to make contributions for their employees, by a desire to save for their own retirement,” SBLC said. “If the tax laws are changed to reduce the ability or appeal of saving in a retirement plan, small business owners will be much less likely to continue an existing plan or start a new plan.” So as not to disturb the current small business retirement system, SBLC urged Congress to:

• Reject attempts to decrease the amount that can be saved in a qualified plan. If the amount that small business owners can save in a qualified plan is reduced, small business owners will be motivated to freeze or terminate plans once they themselves have hit that cap. This will mean that fewer small business employees will be offered a plan.
• Avoid changes that would quickly force savings out of a plan after the owner’s death or otherwise do anything to make owners concerned about saving too much in a retirement plan. If a small business owner is concerned about his/her descendants who inherit the plans assets will be forced to take the money out over a short period of time and therefore face negative consequences, the owner is likely to save less in the plan, which will not only impact his/her retirement security but that of the other employees of the business as well.
• Protect the deductibility of employer contributions. If the deduction for the employer contribution is eliminated, an employer will be far less likely to contribute toward an employee’s retirement savings.
• Reject proposals to try to limit how much can be saved in a defined contribution plan pre-tax (i.e., to force some or all of the defined contribution retirement plan system towards Roth IRAs). If employees are taxed on contributions to a plan, they will be less likely to save, which, given that people are far more likely to save in employer-sponsored retirement plans than in any other vehicle, would reduce retirement savings overall.

SBLC is a permanent, independent coalition of more than 40 trade and professional associations that share a common commitment to the future of small businesses. ASA Chief Advocacy Officer E. Colette Nelson is a past chair of SBLC and currently serves on its board of directors.

ASA-Endorsed Change Order Reform Bill Introduced in U.S. House

“The ‘Small Business Payment for Performance Act,’ when enacted, will help protect the cash flow of small contractors and subcontractors,” said ASA Chief Advocacy Officer E. Colette Nelson.

H.R. 2594, introduced by Rep. Brian Fitzpatrick (R-Pa.) on May 23, would require a federal agency to make interim partial payments to its construction prime contractor for work performed under a directed change order.

“This is a best practice concept embodied in the changes clause in ConsensusDocs and brought to the attention of federal legislators by ASA and other members of the Construction Industry Procurement Coalition,” Nelson said.

Today, when a federal agency unilaterally requires a prime construction contractor to perform extra work, a prime construction contractor may request an equitable adjustment—an increase in fee—for the additional work. The request must be made in a timely manner and must specify the estimated amount it cost to perform the extra work required by the agency.

Under H.R. 2594, once it receives a request for an equitable adjustment from a small business construction contractor, a federal agency would have to make an interim partial payment of at least 50 percent for the additional work performed, within the time frame specified by the Prompt Payment Act. The provisional payment would not prejudice the rights of either party in finalizing the contractor’s request for an equitable adjustment during subsequent negotiation or failing to reach mutual agreement, any further resolution pursuant to the disputes clause in the Federal Acquisition Regulation.

As under the existing Prompt Payment Act, a federal prime construction contractor would have to pay its subcontractors and suppliers within seven days of receipt of payment from the federal agency. Ask your Representative to co-sponsor H.R. 2594 by using the ASA Legislative Action Center (http://bit.ly/2qjyWgk).

ASA Invites Subcontractors to Apply for Certificate of Excellence in Ethics

ASA, upon the recommendation of the ASA Task Force on Ethics in the Construction Industry, has renamed the ASA Excellence in Ethics Awards Program as the ASA Certificate of Excellence in Ethics to better reflect that the program is not an awards competition, but rather a certification program that determines whether a subcontracting firm has met certain qualifications demonstrating its commitment to professionalism and sound business practices.

The ASA Certificate of Excellence in Ethics recognizes subcontractors that demonstrate the highest standards of internal and external integrity. Applicants still must meet a number of critical milestones before the Dec. 15, 2017, deadline, particularly those who have not yet developed a documented ethics program. ASA provides a timeline to help applicants keep on track. Each applicant is also required to respond to questions concerning the firm’s corporate ethics policies and procedures, its construction practices, and its general business practices. Each applicant must submit detailed documentation, including sealed letters of recommendation from a customer, a competitor, and a supplier.

Applicants can learn more about the judging criteria and submission requirements in the program brochure, download an application, and access a resource guide to help them prepare and submit an application. This guide contains model documents, such as sample recommendation letter requests and model policies on topics ranging from competition and conflicts of interest to internal procedures and whistle blowing.

Apply for the ASA Certificate of Excellence in Ethics by Dec. 15, 2017. Certificate recipients will be announced during an awards ceremony held in conjunction with SUBExcel 2018 (http://www.subexcel.com/), which will take place Feb. 28-March 3, 2018, in Tempe, Ariz. Be sure to save the dates on your calendar! Online registration is expected to be made available this month. Information about this certificate is located under “About ASA” on the ASA Web site at www.asaonline.com.