In today’s construction news, read about how Project Labor Agreements (PLAs) will be needed for federal construction projects worth at least US$35 million for the first time in US history, but some business leaders are upset and threatening legal action. Meanwhile, following years of inability to increase the number of foreign workers entering the country to address ongoing labor shortages, the construction sector managed to buck the trend and bring in over 90,000 new immigrants—a level not seen since the 2005–2006 housing bubble. On the other hand, according to the Ontario Provincial Police (OPP), two people are being charged with fraud in relation to an invoicing scheme at a construction services company. Beginning in February 2020, the OPP conducted an investigation in collaboration with the Serious Fraud Office for Ontario (SFO), the Federal Bureau of Investigation (FBI), and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Lastly, President Joe Biden and Acting Labor Secretary Julie Su said on Monday that around 200,000 construction workers in the United States will benefit from new collective bargaining rules. Additionally, the administration unveiled a final rule that implements an executive order that was introduced last year.
Conflicts over PLAs in the US may Result in Legal Issues
Original Source: Disagreements over PLAs in US could lead to legal challenges
Project Labor Agreements (PLA) will be required on federal construction projects over $35 million for the first time in US history, but industry leaders are upset and threatening legal action.
On December 18, US President Joe Biden issued his final rule on Executive Order 14063 (Federal Acquisition Regulation: Use of Project Labor Agreements for Federal Construction Projects), which mandates PLAs for federal projects over $35 million.
ABC announced shortly after the president’s announcement that the move “will face legal challenges.”
PLAs are what?
US federal government pre-hire collective bargaining agreements called Project Labor Agreements (Community Workforce Agreements) set terms and conditions for a specific federal construction project. PLA projects require unionized enterprises, contractors, and workers, which worries non-union companies.
PLAs set wages, benefits, and project timeframes, among other aspects.
ABC vice president of regulatory, labor, and state affairs Ben Brubeck said compulsory PALs provide union firms a monopoly on government contracts, which advantages the minority of US contractors.
He said required PLAs excluded “the 88.3% of America’s construction industry who have made the choice not to belong to a union and want a fair opportunity to participate in federal construction projects.”
Brubeck termed mandating PLAs “burdensome, inflationary and anti-competitive” and predicted taxpayers will pay more for government projects.
President Biden’s statement was opposite.
“This means projects funded by my Investing in America agenda will move faster and without delays, giving taxpayers better bang for their buck,” said the announcement.
The US President also said greater union work on federal projects will improve worker safety and benefits.
The Pros and Cons
According to political affiliation, Democrats support compulsory PLAs while Republicans oppose them.
PLA supporters say they improve safety, cost, and timeline control. Opponents argue PLAs raise federal project costs, favor unions, and hinder competitiveness.
US federal government PLA use began in the 1930s.
Historians believe that 90% of US construction enterprises and workers were unionized in the 1930s. ABC reports that nearly 90% of workers and enterprises are non-union.
Immigration Labor is Growing in the United States Construction Industry
Original Source: U.S. construction industry attracting more immigrant labor
After years of struggling to increase the number of foreign workers to fill labor shortages, the construction industry attracted over 90,000 new immigrants, a level not seen since the 2005-2006 housing boom. Native-born workers are reluctant and join the business at a slower rate, with their total count over half a million below mid-2000s housing boom levels. The 2022 American Community Survey found a record 24.7% of immigrants in construction. According to the National Association of Home Builders, immigrants make up over 31% of construction workers.
The ACS reported 11.8 million construction workers in 2022, including self-employed and temporarily jobless. According to the ACS, 8.9 million were native-born and 2.9 million were foreign-born, the biggest number of immigrant construction workers ever.
The construction workforce, including native- and foreign-born workers, has increased since the pandemic but is lower than during the mid-2000s housing boom. The graphic above shows that native-born workers are lacking. Construction lacks 525,000 native-born workers compared to 2006 peak employment, and new immigrants only partially compensate. The early pandemic lockdown data gathering challenges prevented us from providing solid 2020 projections, therefore we omitted them from the figures.
The annual influx of new immigrants into construction is usually tied to labor need. New immigrants in construction increase significantly when housing starts rise and plummet when housing starts fall. Immigration responds quickly, usually in the same year as single-family building. The annual flow of new immigrants into construction is highly correlated with new home development, especially single-family starts.
The relationship collapsed in 2017 when NAHB estimates showed an unexpected reduction in new immigrants in construction despite consistent housing starts. Pandemic-related travel bans and border restrictions severely disrupted the flow of new immigrant workers. Immigration into construction returned to normal levels in 2021, driven by home building activity, according to latest data.
The rising trend and increase of immigrants since 2021 are consistent with but slightly stronger in construction than in the rest of the US economy. Except for construction, where foreign-born workers are more prevalent, immigrants’ percentage of the US labor force rose from 14% in 2004 to 16.6% in 2018, the highest level recorded by the ACS. In 2022, immigrants returned to 16.6% from record highs in the post-pandemic market.
Two GTA Residents Are Being Charged With Fraud After a U.S. Construction Company’s Invoicing Scheme
Original Source: 2 GTA residents facing fraud charges following invoicing scheme at U.S. construction company: OPP
OPP said two people are charged with fraud in connection with a construction services company’s invoicing scheme.
In early February 2020, OPP, SFO, FBI, and FINTRAC began an inquiry.
A Canadian subsidiary of an unidentified American construction services company was investigated for fraudulent invoicing, according to police.
Our app provides local alerts on your mobile.
Receive local updates in your email.
A combined investigation examined alleged bogus invoicing for unrequested and unfinished services. Cheques used to pay false invoices allegedly resulted in losses of over $300,000.
American authorities charged a former construction services accountant.
Invoicing scheme charges have been filed against two GTA residents. Giovanni Imbesis, 47, of Woodbridge is accused with one count of fraud over $5,000, while Peter Lavorato, 47, faces three charges.
Courts have not heard the charges.
To preserve the court process, the SFO did not comment.
Collective Bargaining Is Required for Major Federal Building Projects Under the Biden Rule
Original Source: Biden Rule Mandates Collective Bargaining for Major Federal Building Projects
President Joe Biden and Acting Labor Secretary Julie Su announced new collective bargaining rules for 200,000 U.S. construction workers on Monday as the administration finalized an executive order from last year.
Federal agencies must sign project labor agreements (PLAs) for $35 million or more construction projects under the new rule.
The General Services Administration (GSA) revised federal regulations under Executive Order 14063, which will take effect 30 days after being published in the Federal Register on Friday.
The PLA requirement requires contractors, subcontractors, and unions to negotiate project construction terms, guaranteeing almost 200,000 construction workers collectively bargained salaries, benefits, and safety safeguards regardless of union membership.
“In President Biden’s America,” Su remarked Monday, “‘union’ is not a negative word It makes America strong.”
Biden promised that his Investing in America employment plan projects “will move faster and without delays.”
“Workers will have the security and peace of mind that collectively bargained wages and benefits bring, better pathways to good-paying jobs, and stronger health and safety protections,” stated Obama.
Monday’s announcement was made at Cleveland’s Anthony J. Celebrezze Federal Building, where the GSA is modernizing to provide veterans with support services.
“Contractors and unions at this site have entered into a PLA that helps the parties address the unique coordination challenges posed by large projects,” the White House stated in a new rule fact sheet. “The PLA covering the Celebrezze Federal Building project also supports equitable workforce development pathways into the trades and registered apprenticeship.”
The new rule “is welcome news for the responsible use of taxpayer dollars” and the protection of federal project workers, according to North America’s Building Trades Unions president Sean McGarvey.
“Project labor agreements ensure that large-scale projects are completed on time, with the highest quality, efficiency, and safety,” says McGarvey. “Time and again, PLAs have proven to address labor supply issues, prevent work stoppages, protect workers’ classification, strengthen health and safety standards, and achieve substantial, direct cost savings by standardizing contract terms for highly skilled craft workers.”
“PLAs also boost community economies through local hiring goals and recruitment of workers into apprenticeship and pre-apprenticeship job training programs,” McGarvey said, “that uplift historically marginalized communities into middle-class construction careers.”
Summary of today’s construction news
To sum it up, historians estimate that in the 1930s, union membership accounted for roughly 90% of construction enterprises and/or workers in the US. These ratios have now flipped; according to data from ABC, almost 90% of workers and businesses do not belong to a union.
Meanwhile, the general upward trend and the discernible increase in the proportion of immigrants since 2021 are comparable, but marginally more pronounced in the construction industry than in the rest of the US economy. With the exception of the construction industry, which depends more heavily on foreign labor, the proportion of immigrants in the US labor force rose from a little over 14% in 2004 to 16.6% in 2018, the highest percentage ever noted by the ACS.
On the other hand, two residents of the Greater Toronto Area are being prosecuted in connection with the billing scheme. Giovanni Imbesis, also 47, of Woodbridge, is charged with one count of fraud over $5,000, while Peter Lavorato, 47, of Woodbridge, is accused of three counts of fraud over $5,000. The allegations are untested in court. To preserve the integrity of the subsequent legal proceedings, the SFO declined to speak further.
Lastly, the White House stated in an information sheet about the new rule that “contractors and unions at this site have entered into a PLA that helps the parties address the unique coordination challenges posed by large projects.” “The PLA covering the Celebrezze Federal Building project also supports equitable workforce development pathways into the trades and registered apprenticeships.”
