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On Wednesday, November 20th ABC NH/VT was invited to Governors Phil Scotts office on the “5th floor” of the Pavilion building in Montpelier, VT for his weekly press conference. Ryan Ahern, Director of Field Operations for ReArch and Ted Sheehan, Apprentice Participant at ReArch also attended the press conference to recognize apprenticeship week. Vermont Works for Women who also hosts apprenticeship programs joined in the conference.
Governor Scott started off the press conference with a speech recognizing the hard work Vermonters face in growing their workforce, but also in retaining the workforce through programs like apprenticeships. Scotts applauded that employers across the state now have over 1,500 active participants in apprenticeships and that the state would work hard to expand those opportunities and programs. The Governor pointed out that we need to continue to create pathways into professions because the average age of a worker in Vermont is 55 and we are in a demographic crisis.
Following Scott was Vermont Department of Labor Commissioner, Michael Harrington who echoed the governor’s statements and added some of his own insight. He reported on the hard work the agency was doing to improve outcomes for employers and employees while focusing on future financial investments needed to expand opportunities.
Josh Reap, CEO ABC NH/VT, stepped up next to talk about the excitement and results from apprenticeship programs including some of the benefits of careers in construction. Reap pointed out that growing the construction trade was one of the methods that Vermonters could use to solve the existing housing crisis by, “building our way out of it”. He also pointed out that the average age of a construction worker in Vermont was 60 years old and we are in full crisis mode in need of growth which is why ABC NH/VT and its members were active in creating more opportunities.
Ryan Ahern, Director of Field Operations for ReArch went next with a passionate speech declaring that ReArch would continue to grow, train and recruit as much as possible to meet the community needs. He said, “We are going to bring dignity back to the trades” which is a much-needed message for young people and people who may not be served well by their current employment situations. Ahern shared his experience of learning the basics and hard work that he and ReArch seek to share with others. His tone was clear and the message was that we have our work cut out for us.
Closing the show was Ted Sheehan, a recent graduate of the ABC NH/VT Carpentry Apprenticeship and ReArch builder. Sheehan shared his experience which started with a four-year college route but quickly realized it wasn’t for him. He said he learned about ReArch and the opportunities to grow there and the support they shared. He explained how the apprenticeship program helped him earn a good living while at the same time improving his skills and experience in the industry. Sheehan said he appreciated both ReArch and ABC NH/VT for their partnership in the program that has helped him reach personal success.
Vermont Government Affairs Update November 19, 2024
On Tuesday, November 12th, 2024, Vermont Secretary of State, Sarah Copeland Hanzas, certified the election results from the prior week’s election which point to a changing trajectory in Vermont.
Hanzas, while certifying her own reelection, was one of the six statewide candidates who won reelection. Our Congressional delegation will remain the same as Vermonters sent Representative Becca Balint and Senator Bernie Sanders back to Washington DC. State Treasurer Mike Pieciak, Auditor Doug Hoffer and Governor Phil Scott also sailed into easy reelection.
The only surprise in the statewide candidate races was the Lieutenant Governor race which had Republican John Rogers of Orleans County beat incumbent Progressive/Democrat David Zuckerman. The race which Rogers won by only 6,000 votes represented the real shift in Vermont politics showing a resounding opposition to progressive policies and wild state spending. This race is likely to put an end to Zuckerman’s chances to run for governor in the future and the opposite for Rogers.
Governor Scott successfully spent most of the campaign season promoting 6 Senate districts Republicans were trying to win. 3 of the seats up for grabs were open due to retirements and Republicans won in Grand Isle, Orleans and Caledonia Counties. 3 seats were lost by Democrat incumbents in Addison, Orange and North Chittenden Counties to Republicans. Those seats including ones where Republican incumbents won gives Governor Scott the ability to have vetoes sustained by his party where he had not been able to during the Democrat supermajority. With the new Senate things will change, particularly because 3 major committee chair positions have opened in Transportation, Appropriations and Energy and Environment. Whoever takes over those chairs will drive Vermont policy for the near future.
The House followed the same trend as the Senate with Republicans flipping many seats from Democrats. The seats that were flipped were in traditionally conservative districts except for one. Representative Diane Lanphear of Vergennes, a very liberal district, lost her seat to a Republican. Lanphear was the chair of the powerful Appropriations committee and a long-time party stalwart. Another chair that was not reelected was Representative Mike McCarthy of St Albans who was a moderate Democrat in a conservative county. House leadership in the Democratic Party has taken note of the voters actions and we will likely see them attempt to cure Vermonters concerns with fiscal policy and public safety which were the two top priorities in Vermonters polled through the campaign season.
What does all this change mean for Vermonters and contractors? The voters spoke and their message to politicians was to spend less, protect our citizens and build housing. The reelection of Governor Phil Scott and end of the supermajority will require Democrats and Republicans to work towards more common-sense goals that align with Vermonters desires and slow the spending on non-critical projects. It creates an opportunity for housing advocates to push real change in development law and workforce advocates to get funding and attention where they had not in the past.
ABC NH/VT will be there working for its members and the community as a whole. We have begun our 2025 Government and Legislative Affairs Committee to gain a focus on our goals and would be happy if more would join us. If you are interested in participating, please reach out to Matt Musgrave (matt@abcnhvt.org) or Josh Reap (josh@abcnhvt.org).
Today is Election Day! As we cast our votes, we also turn our attention to the rapidly approaching 2025 legislative session in January. The drop of the gavel always seems to come quicker than some would expect or enjoy. In the months leading up to the opening of the state house, legislative and administrative study committees have been racing to complete their reports and, more importantly, their recommendations in time for the incoming legislature. ABC has been tracking several of those studies that may have significant impacts on contractors.
Vermont’s Department of Environmental Conservation has released a report detailing its recommendations for reducing and eliminating PFAS, or “Per- and Polyfluoroalkyl Substances,” from consumer products. These man-made chemicals are resistant to heat, water, oil, and grease, and are found in products such as carpets, clothing, cookware, food packaging, firefighting foams, paints, cleaning products, microelectronics, batteries, and medical equipment. Commonly called “forever chemicals,” PFAS are suspected carcinogens linked to various illnesses, including cancer and other serious diseases. Vermont took notice of PFAS contamination after groundwater near a dry-cleaning chemical company was discovered to be contaminated several years ago. The report focuses primarily on intentional additions to consumer products. While there are many exemptions to the rulemaking process, it remains unclear how items like personal protective equipment or construction materials might be impacted. Once reviewed by the legislature, a bill may follow that incorporates some or all of the report’s recommendations. ABC will monitor this process closely to ensure contractors’ concerns are addressed before any potential legislation is passed.
The Department of Public Service is leading a study group on whether Vermont should adopt recognized residential building codes and designate the Department of Fire and Safety (DFS) as the “Authority Having Jurisdiction” (AHJ) for single-family homes, which it does not currently regulate. This is a continuation of last year's study group that recommended significant changes to Vermont law to improve compliance with the Residential Building Energy Standards (RBES). The study group, which includes energy nonprofits, home builders, commercial builders, architects, and state agencies, has been meeting throughout the summer. The results appear to align with the previous report, highlighting the ongoing division in opinions on how to achieve RBES compliance and whether to designate DFS as the AHJ. The report is likely to reiterate prior suggestions, detailing various paths forward and noting dissenting views on each. It will then be up to the legislature to decide which policies to pursue. Limited state resources may restrict the scope of changes, though adopting a recognized building code without statewide enforcement could be a next step.
The Public Utility Commission has presented a plan to adopt the Affordable Heat Act (also known as the Clean Heat Standard) in Vermont. This plan would require registered heating fuel dealers to reduce the fossil fuels they sell by incentivizing alternatives like electric heat pumps or other efficiencies. If a dealer is unable to meet these requirements, they would pay a fee (“credit”) to an entity that could reduce or incentivize reduced usage, with this cost likely passed on to customers. Current estimates suggest the policy could add a substantial tax of 70 cents or more per gallon of fuel. The proposed plan, which would cost tens of millions of dollars paid by Vermonters, is now in the public comment period before it is presented to the legislature in January. Even the Public Utility Commission has acknowledged that the associated costs should prompt legislators to consider less expensive alternatives.
These are just a few of the topics ABC NH/VT will be tracking in the Vermont legislature, and we’ll keep you informed every step of the way. If you have questions or are interested in participating in ABC NH/VT’s government advocacy committee, please contact matt@abcnhvt.org.
As of October 15th, the statewide election races are basically locked in with the same people representing Vermonters expected to win, except for Lieutenant Governor. Incumbent David Zuckerman from Hinesburg faces off with Republican (formerly Democrat) John Rodgers of Essex-Orleans County for the #2 seat in the state house.
The Lieutenant governor is an important seat in the legislature although it doesn't actually introduce policy or vote on bills with the exception of tiebreakers on the Senate floor. One of the most important jobs the Lieutenant Governor has is working on the Committee on Committees which is designed to establish who sits on what committee in the State Senate. Legislators who chair and/or sit on committees have a significant amount of control over how bills are written and the outcomes of those bills. Finally, the Lieutenant governor also serves in place of the governor if he/she is ever unable to perform his/her duties.
David Zuckerman a Progressive/Democrat has been in the Lieutenant seat since 2017 with an exception for a 2-year break after losing to Molly Gray who ran a strong campaign in the primary of 2020. Zuckerman is running on his experience in Montpelier and dedication to Vermonters in need. Zuckerman as the incumbent has a significant chance of being re-elected but as Vermonters have been seeing double-digit tax increases in almost all parts of their lives it may challenge his campaign.
John Rogers was a long time “blue dog” Democrat in the Senate and after bucking many of his parties policies over the years switched and recently became a Republican. His focus in the Senate was on rural working Vermonters while working in his committees but his floor votes in the Senate were mostly party lines with the Democrat/Progressive caucus. Rogers switch from Democrat to Republican, as he describes, was from a perspective of “common sense” and that his old party has focused on policies that hurt and do not reflect the value of Vermonters. His challenge to election will always be the party switch and having to explain that to voters.
The 2024 election will be an important one here in Vermont and it’s critical that everyone finds a reason to vote. Although most offices won’t change statewide, it’s important to look forward. The Lieutenant Governor is the next likely “real” candidate for governor after Phil Scott decides to leave office.
If you have your ballot it’s time to fill it out and send it in. Encourage others you know to do the same. Think about ways your organization can help either get people out to the polls or send in their ballots. It’s not too late to register either so encourage everyone to get out and VOTE. This year is critical for the impacts Vermont will face for the next 20 years.
If you have interest in participating in the ABC Government Affairs Committee, contact Matt Musgrave at matt@abcnhvt.org or call 802-881-9117.
Vermont Government Affairs Update October 2024
The state of Vermont is a buzz of political calls, emails and events across the state as ballots will be mailed in the next week to all registered voters. In addition, many reports due to the legislature are in the process of completion or have been delivered to answer several questions related to professions including residential contracting, building code studies and education funding.
In response to a huge statewide property tax increase with an average of 14% for every homeowner there are non-governmental organizations (NGOs), chambers of commerce and even Department of Education studies trying to assess and identify reasons and solutions to huge increases. Governor Phil Scott issued a preliminary warning in several public appearances this week that already we know of a 7% increase in 2025’s statewide property taxes based on only healthcare insurance premium increases way before school budgets have even been considered. The sweeping opinion of most of the studies is the attachment of healthcare insurance to education spending has become one of the biggest drivers in increases to budgets. Additionally, para educators and additional staff needed to work with the evolving student landscape has also been an issue. The groups studying these challenges will bring in their opinions for “fixes” which will largely be contradictory as usual, and we will see those in January when the legislature returns.
The Office of Professional Regulation (OPR) has issued a “status report” on a recently created residential contractor registry requirement. The new law requires any contractor who performs $10,000 or more in any one contract with the owner of primary residential property (up to 4 units) to register with OPR while following written contract and insurance requirements. The report suggests the $10,000 threshold requirement for registration should be lower, or non-existent due to a small number of people/firms registering currently. It also, suggests that the registry is insufficient to deal with quality of work issues as the department is not qualified to do so. It also points out that the voluntary certification system created cannot manage safety or quality and refers the reader to consider sending jurisdiction of those issues to the Department of Fire and Safety (DFS). DFS has repeatedly refused to work in the single-family residential market for many reasons. It is likely a bill will be introduced to try to change all three. What this means to commercial contracting firms is that their employees who may be moonlighting on the weekends should be registered in the system to prevent their employers from vicarious liability should someone be driving a work truck or use tools provided by an employer while moonlighting.
At the same time OPR is seeking to create a new jurisdiction under Department of Fire and Safety (DFS) another legislative working group is focused on not only the jurisdictional element but the adoptions of a statewide residential building code. Director of DFS, Michael Desrochers, is a member of the committee and has repeatedly opposed sending jurisdiction of single-family residences to his department due to staffing and funding issues. NGOs involved with the study have already produced “napkin estimate” projections for the cost of the program, licensing of contractors and inspections of buildings. The committee is operating as a rerun of a similar working group from the 2023 and it’s likely that even before the report is written that legislation is already in the works. That legislation would likely ask for all jurisdiction of single-family homes and licensing/registration of residential contractors be moved to DFS. It will then be up to the legislature and advocates on either side what, if anything, comes to pass.
If you have an interest in Vermont’s political and regulatory process, please reach out to Matt Musgrave at matt@abcnhvt.org or 802-881-9117.
Vermont Government Affairs Update September 17, 2024
With the 2024 General Election right around the corner Vermont candidates are out pounding the pavement, attending events and fundraising to keep themselves front of mind with voters through November. With Vermonts new program of mailing absentee ballots to the list of registered voters, people will begin casting theirs as early as the first week of October.
The very low turnout during the primary election which resulted in almost 100% of incumbents winning may be a sign for the general election in November. The low turnout surprised many political analysts in Vermont who were expecting the public to react poorly to a 14% increase in the state property tax which was vetoed by Governor Scott who was eventually overridden by the supermajority. In addition to the property tax and other taxes raised, the public was frustrated by a lack of legislation to make Vermont safer from violent crime and drug trafficking.
The results of the general election will depend on voter turnout, but few see sweeping change coming to Vermont’s legislature. It’s likely that Vermont’s state office candidates and congressional delegates will solidly be won by incumbents and Vermont will most likely vote for the Democratic Presidential Candidate which might stifle the motivation of many to vote.
It’s critical for Vermonters to encourage their friends, peers and coworkers to get out and vote. Some of the challenges pertaining to costs of heat, property taxes and public safety depend on people showing up or mailing in their ballots.
There are 5 competitive Senate races including Grand Isle, Chittenden North, Orange, Orleans and Bennington Counties of which only two have incumbents running. Those races will determine whether the Senate can sustain a gubernatorial veto which wasn’t possible through 2023-2024 which has led to higher taxes, lack of safety legislation and lack of affordability. It’s expected that the House will remain the same holding a supermajority for Democrats supported by Progressives which makes the Senate races so important.
One of the most critical issues Vermonters are facing this year is the formulation and adoption of the “Affordable Heat Act” as dubbed by the legislature. This is a policy intended to reduce fossil fuel usage in in the thermal sector by either incentivizing people to switch out of their fossil fuel burning heat sources to others such as electric heat pumps OR fuel suppliers will pay a surcharge for their fuel which will be handed back to the consumer. Recent studies by consultants working on the policy estimate that fuel costs would go up $2-4/gallon depending on type of fuel. Details of the act and concerns can be seen by CLICKING HERE for a webcast by Matt Cota of Meadow Hill consulting who represents Vermont’s Fuel Dealer Association.
For information about your registration status and who is running in your district you can visit Vermonts Secretary of State website by CLICKING HERE.
First Apprentices Graduate from Vermont’s Newest Multi-Employer Commercial Craft Apprenticeship Program
Graduating Class includes Three Vermonters from Two Employers
Burlington, VT (June 20) – Associated Builders & Contractors NH/VT Chapter (ABC) and ReSOURCE conducted a graduation ceremony, June 20, for three apprentices graduating from the inaugural class of the association’s new carpentry apprentice program.
“We are excited for the graduates of our carpentry apprenticeship program,” said Josh Reap, President & CEO of ABC. “They came into this program with an interest and today graduate as journeyworkers in their craft. These individuals chose to be part of something bigger than themselves and we are proud of them!”
"Taking this course gave me an opportunity to learn the more academic side of the trades,” said Caley Martin, an apprentice with Bread Loaf Corporation. “Getting to learn the same subject at the same time as my peers enabled us to reinforce each other's learning. The wonderful instructors kept it interesting and helped us get a holistic understanding of the building trades from foundation to roof. I hope more students are able to get this opportunity. Big thanks to Bread Loaf for enrolling me."
The Commercial Craft Apprenticeship Program teaches apprentices carpentry skills in a safe, controlled environment. Registered apprenticeship helps people develop their craft faster than stand alone on the job training.
“ReSOURCE has experience empowering individuals and strengthening Vermont through workforce development. We are proud to be a leading the instruction for this growing apprenticeship program. Each person that enters an apprenticeship program is on the path to earning competitive salary, learning new skills, and answering the call to help solve the construction industry’s workforce shortage.” --Tom Longstreth, Executive Director of ReSOURCE
The program required students to complete 310 hours of classroom instruction while working full time for 18 months. Over the course of the program, apprentices also receive wage increases as they master their skills. The program is jointly run by ABC and ReSOURCE and includes several Vermont general contractors that want to solve the workforce shortage by taking an active role in training Vermonters who want to get into a construction career.
"Completing this construction apprenticeship program has taught me proper technique and skills crucial for success in my career. Furthermore, I gained a deeper appreciation for teamwork and the thorough process necessary for completing a successful project,” said Trenten Mead, Carpenter Apprentice with ReArch Company. I’m eager to apply what I’ve learned and be a greater asset in the field. This graduation is just the beginning of the meticulous process of mastering carpentry.”
"Congratulations to all the graduates! As you step into your careers, remember that the skills you've acquired are not just for building structures but for building your future. We are excited to see the remarkable contributions you will make to the construction industry,” said John Illick, CEO of ReArch Company. “Endless job opportunities are available to apprentice graduates and those interested in pursuing a career in the skilled trades. Here’s to the builders of tomorrow and improving lives through the built environment.”
“The State of Vermont is a great partner in helping employers build programs like this, which people skill new hires and upskill incumbent employees,” added Josh Reap. “With their help, we are changing lives more and more for the better. In fact, the second class of apprentices currently numbers nearly two dozen individuals and they will graduate next year. As the program continues to grow, so do the opportunity for careers in a great industry.”
Employers and jobseekers interested in the program can learn more by visiting www.abcnhvt.org or www.resourcevt.org
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ABC NH/VT represents 270 firms in Northern New England. Founded on the merit shop philosophy, ABC NH/VT is a chapter of the national Associated Builders & Contractors, and has the mission of helping members develop people, win work and deliver that work safely, ethically, profitably and for the betterment of the communities in which ABC and its members work. ABC's membership represents all specialties within the U.S. construction industry and is comprised primarily of firms that perform work in the industrial and commercial sectors.
ReSOURCE has been a fixture in Vermont since 1991, empowering individuals and strengthening Vermont communities through Workforce Development, Poverty Relief, and Environmental Stewardship. ReSOURCE is intentionally located in areas with the most need to expand its community impact and increase accessibility for the most disadvantaged Vermont communities. ReSOURCE’s stores and services are open to the public, serving 100,000 people each year and salvaging more than 1,000 tons of diverted waste each year from the landfill. Sales from reuse stores provide poverty relief through the Essential Goods programs—giving free household goods to more than 1,500 people and their families each year and provide funding for our Workforce Development Training programs—directly training over 250 people on average each year, matching Vermont’s urgent need for skilled workers with the training and support local employers need. ReSOURCE excels at adapting to community needs, and as Vermont’s un-and-under employed population has shifted to include more new Americans and Vermonters with disabilities, ReSOURCE has continued to evolve its job skills training to help more Vermonters prepare for and enter the workforce.
Founded in 2007, the Future Leaders in Construction (FLiC) program is a leadership development initiative designed for both emerging leaders and established professionals who are committed to making a significant impact in their work and personal lives. Whether you are working in the field or in the office, FLiC offers a unique and enriching experience by bringing together participants from diverse backgrounds and experiences, fostering a rich environment for learning and growth.
At the heart of the FLiC program is the aim to develop a deeper understanding of oneself, which is the cornerstone of understanding and leading others effectively. Through a series of comprehensive assessments, including DISC (behavioral preferences), listening, conflict styles, and team dynamics, participants can identify their personal leadership styles. This self-awareness lays the groundwork for improving essential communication and listening skills, which are crucial for effective leadership.
FLiC was developed by Jennifer Landon, M.ED, VP of Education and Workforce Development at the Associated Builders and Contractors NH/VT. "The Future Leaders in Construction program is about more than just building skills; it's about building people,” says Landon. “Our goal is to empower both emerging and established professionals to become visionary leaders who can inspire and drive positive change in their workplaces and communities. By fostering a deep understanding of oneself and others, enhancing communication, and cultivating a positive and healthy work culture, we are shaping the future of the construction industry, one leader at a time."
Landon, along with co-facilitators Susan Losapio, PhD, and Dr. Sophia Koustas, teaches two FLiC programs, one in New Hampshire and another in Vermont. Participants attend eight full-day classes over an eight-month period, culminating in a graduation celebration in June. For more information or to join the waitlist for the 2024-2025 program, please contact Jennifer Landon, jennifer@abcnhvt.org.
The 2023-2024 Future Leaders in Construction graduates include the following:
Chris Rowan - Alpine Environmental Inc.
Joel Ruiz - Alpine Environmental Inc.
Brad Rostron - ARC Mechanical Contractors, Inc
John Bisson - ARC Mechanical Contractors, Inc
Lisha Nelson - Associated Builders & Contractors NH/VT
Haley Frazier - Charters Brothers Construction, LLC
Melanie Smith - Charters Brothers Construction, LLC
Samuel J. Marcionek - Charters Brothers Construction, LLC
Rheana Anderson - Cobb Hill Construction
Kevin Hardt - Cormack Construction Management, Inc.
Nicholas DeHaas - Cormack Construction Management, Inc.
Thomas Cracolici - Cormack Construction Management, Inc.
Ben LaFlam - DEW Construction
Cameron Riley - DEW Construction
Codie Lawson - DEW Construction
Colby Luopa - DEW Construction
Devon Wells - DEW Construction
Emily Bastian - DEW Construction
Jason M. Campbell - DEW Construction
Kimberly Lawton - DEW Construction
Robert Wells - DEW Properties
Don E. Lawrence - Engelberth Construction Inc
Chris Spirito - Fulcrum Associates
Matt Ward - Fulcrum Associates
Melissa Field - Fulcrum Associates
Michael K. Mavrogeorge - Fulcrum Associates
Colin O'Connor - Granite State Glass
Patrick Elliott - Granite State Glass
Brian Clews - H.P. Cummings Construction Co.
Emily Balzano - H.P. Cummings Construction Co.
Matt Nutting - H.P. Cummings Construction Co.
Mike Yandow - H.P. Cummings Construction Co.
Zachary Denekas - H.P. Cummings Construction Co.
Allison Bryant - Metro Walls, Inc.
Taylor Prime - Metro Walls, Inc.
Seth M. Hoenes - Multi-Weld Services
Bronson Raspuzzi - North Branch Construction
Chris Ricketts - North Branch Construction
Elizabeth Marchand - NorthPoint Construction Management
Jordan Burke - Optiline Enterprises
Laurie Couture - Optiline Enterprises
Duncan Tilford - PC Construction
Joshua Menard - PC Construction
Martin Pigeon - PC Construction
Mike Steding - PC Construction
Rob Mahoney - PC Construction
Adam Hall - PROCON
Sam Washuk - PROCON
Trevor J Snow - PROCON
Patrick Curran - Turnstone Corporation
George O'Grady - VHV Company
Joe Fischer - VHV Company
Jonathan Laramie - VHV Company
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About Associated Builders and Contractors
Associated Builders and Contractors is a national construction industry trade association representing more than 23,000 members. Founded on the merit shop philosophy, ABC and its 68 Chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. ABC's membership represents all specialties within the U.S. construction industry and is comprised primarily of firms that perform work in the industrial and commercial sectors.
The annual Safety Awards recognize commendable safety performance of individual firms. The awards convey ABC’s strong support of safety performance in full recognition of the fact that each firm has the responsibility for execution of safety, to ensure an overall safe workplace.
Annual safety awards are for the BEST and MOST IMPROVED safety records, and MOST CREATIVE safety program among “small” and “large” member firms, in each of the following Standard Industrial Classification (SIC) Code major groups, as well as SUPPLIERS:
Congratulations to the 2024 Safety Award Winners.
WASHINGTON, April 23—Associated Builders and Contractors today issued the following statement opposing the U.S. Department of Labor’s final rule that will change overtime regulations under the Fair Labor Standards Act. The final rule increases the minimum annual salary level threshold for exemption in two phases: from the current level of $35,568 to $43,888 on July 1, 2024, and to $58,656 on Jan. 1, 2025. In addition, salary thresholds will update every three years starting on July 1, 2027.
“ABC appreciates that the DOL recognized the value in retaining the methodology used by the prior administration in the 2019 overtime rule update for the phase I increase,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Regrettably, the DOL decided to use a new methodology for phase II, which results in a 65% increase to $58,656 from the current threshold only nine months from now—further complicating the current economic outlook. Multiple industries, like construction, are grappling with uncertain economic conditions such as inflation, supply chain disruptions, high materials prices and workforce shortages, all of which push operational costs ever higher. Specifically, ABC estimates that the construction industry must hire more than half a million additional workers in 2024 to meet demand.”
“Virtually all of ABC’s members employ workers who qualify for exempt status, and phase II of the final rule will reclassify huge numbers of these employees as nonexempt,” said Brubeck. “This will disrupt the entire construction industry, specifically harming small businesses, as the rule will greatly restrict employee workplace flexibility in setting schedules and hours, hurting career advancement opportunities. These issues will recur repeatedly because the DOL rule will automatically increase the salary level every three years beginning in 2027. Additionally, the rule’s significant increase in the salary level threshold fails to account for disparate income levels in different regions of the country.
“ABC will consider all options, including a legal challenge, against this final rule,” said Burbeck.
On Nov. 8, 2023, ABC submitted comments to the DOL in response to the proposed rulemaking, calling on the DOL to withdraw it.