Additional
Links
Economic
Stimulus Information:
latest information from the AGC of America and
their efforts to get the construction industry
back to work.
Local Industry
News and Happenings:
information about the construction industry in
Oregon, including event/meeting announcements,
training/educational opportunities, and industry
announcements.
Strong
Construction Spending Rebound in April as
Stimulus Funding & Residential Construction
Drive Demand
2.7 Percent
Increase in Spending Represents Largest
Monthly Increase in 10 Years
June 1, 2010
Construction
spending rebounded strongly in April, with
an increase of 2.7 percent or $23 billion
from March to a seasonally adjusted annual
rate of $869 billion according to the latest
analysis of federal spending figures
released today by the Associated General
Contractors of America. The association
noted that the gains were primarily driven
by private residential construction (up 4.4
percent) and public construction (up 2.4
percent), but that private nonresidential
also increased significantly (up 1.7
percent).
“The stimulus is
clearly driving one of the biggest increases
in construction spending the industry has
experienced in a long time,” said Ken
Simonson, chief economist for the
construction trade association. “Once you
look beyond the stimulus, however, these
figures show how uneven and fragile the
construction recovery remains.”
Simonson noted
that the stimulus drove significant
increases in a range of public construction
categories. For example, compared to March,
2010, spending on public drinking water
supply facilities jumped 7.9 percent; public
sewage treatment, 3.9 percent; and highway
construction 3.6 percent. Spending on other
public transportation modes was flat for the
month but soared 29 percent compared to
April 2009. In contrast, public educational
construction spending, which received little
stimulus support, only edged up 0.4 percent
for the month and was 18 percent lower than
a year earlier.
Private
nonresidential spending was boosted by
strong gains in private power construction
($3.9 billion, 5.2 percent for the month);
manufacturing ($1.5 billion, 2.7 percent);
and communication ($1.3 billion, 7.3
percent). Meanwhile, developer-financed
categories, which are plagued by
high-vacancy rates and tight credit
conditions, continued to tumble. Private
lodging construction rose 0.8 percent for
the month but was down 61 percent compared
to April 2009; commercial (retail, warehouse
and farm) was down 2.9 percent and 37
percent; and private office was down 1.7
percent for the month and 36 percent for the
year.
Private
residential construction figures were also
mixed, Simonson commented. New single-family
construction climbed 3.4 percent for the
month and 29 percent year-over-year, and
improvements to existing single- and
multi-unit construction rose 6.3 percent and
4 percent from a year earlier. But new
multi-family construction—condos and rental
buildings, which are developer-financed
—slumped 1.9 percent in April and 57 percent
compared to a year ago.
“Assuming the
economy continues to expand,
privately-funded construction should
experience a rebound starting in 2011,”
Simonson noted. “But for now stimulus
funding remains the main source of support
for nonresidential contractors.”
AGCA Healthcare
Webinar
What Impact Will the New Health Care Law
Have on Construction Contractors?
Thursday, May 6,
2010, 10 am
This AGC of
America webinar will detail the recently
enacted health care bill and the sweeping
changes to the delivery of health care in
the United States. Focusing on the impact on
employers in the construction industry as
well as their responsibilities and
requirements to offer health care benefits
to their employees, AGC has partnered with a
prestigious law firm experienced in this
matter to analyze the impact of the bill on
construction employers and suggest
preparations that employers should begin
implementing to comply with the new law.
Plus, AGC will detail its advocacy efforts
during the debate and AGC’s chief economist,
Ken Simonson, will close out the event with
a preview of the impact the legislation will
have on the demand for future health care
construction.
Registration
information will be available in the coming
days. For additional guidance, please review
AGC’s analysis:
The Health Care
Reform Bill is Final...Now What?
March 29, 2010
On March 23,
2010, President Obama signed into law the
Patient Protection and Affordable Care Act
(H.R. 3590) and shortly thereafter the
Health Care and Education Reconciliation Act
of 2010 (H.R. 4872), which changes health
care as we know it. In the coming years
there are many adjustments that construction
companies need to be aware of in order to
comply with the new law.
Please note:
While this article is intended to provide
you with information, it was written with
the members in mind, so please feel free to
pass it along to your membership.
The Process
On March 21, 2010, the House voted to
pass the health care reform bill that was
previously passed by the Senate in December
2009, which made the bill available for the
president to sign into law. After passing
the Senate bill, as is, the House then
passed a “reconciliation” bill that made
several changes to the law. It was then sent
to the Senate, modified and passed again by
the House. While there is a lot of
information and commentary about state
lawsuits and other efforts to repeal
portions of the law, the fact of the matter
is that on March 23, 2010, health care
reform became “the law” and employers will
have to begin complying. Now that the dust
has settled on the bill, AGC will continue
to seek regulatory guidance and compliance
assistance tools for its members as
information becomes available.
Is your
company required to provide health insurance
to employees?
The quick answer is “No,” companies
don’t have to provide health insurance to
employees. But if your company chooses not
to, beginning on January 1, 2014, there may
be stiff penalties to pay. Under the new
law, employers with 50 or more employees who
choose not to offer qualified health
coverage to employees will have to pay
$2,000 per full-time employee, excluding the
first 30 employees from the assessment, each
year if at least one full-time employee
receives income-based premiums assistance to
purchase coverage through an Exchange. The
number of full-time employees can be
determined by adding the number of employees
who work an average of 30 hours per week in
a month to the calculated number of
part-time workers. This calculation requires
employers to divide the total number of
hours worked in a month by employees who
work fewer than 30 hours per week, by 120.
Originally, there was a requirement that
only construction contractors with fewer
than five employees be exempt from the
penalty, but AGC worked with other
construction trade groups to repeal this
provision that targeted the industry. Now,
all companies with fewer than 50 employees
are exempt from the penalty.
Example 1
Scenario:
Calculation:
-
20 PT X 20
hours worked per week = 400 total hours
worked per week
-
400 total
hours worked per week X 52 weeks =
20,800 hours worked per year
-
20,800 / 12
months = 1733.333
-
1733.33 /
120 = 14.444 employees
-
40 full-time
employees + 14.444 part-time equivalents
= 54.44 total employees.
-
54.44
employees minus the 30 employee
allowance = 24.44 employees
Conclusion:
This employer would have to provide
qualified benefits to its employees or pay a
penalty of $49,000 ($2,000 x 24.44 =
$49,000).
Example 2
Scenario:
Calculation:
-
20 PT X 20
hours worked per week = 400 total hrs.
worked per week
-
400 total
hours worked per week X 52 weeks =
20,800 hours worked per year
-
20,800 / 12
months = 1733.333
-
1733.33 /
120 = 14.444 employees
-
35 full-time
employees + 14.444 part-time equivalents
= 49.44 total employees.
Conclusion:
The 30 employee allowance is not
applicable here because the employer has
fewer than 50 total full-time equivalent
employees. Because this number is less than
50, the employer is exempt from the mandate
and does not have to provide qualified
coverage or pay a penalty.
Available small
business pooling options and tax incentives
designed to entice those small businesses to
offer health coverage may do just that. For
example, by 2014, a Travelocity-like health
care exchange system will be created for
businesses with fewer than 100 employees to
pool together and shop for affordable
healthcare plans. Until then, companies with
10 or fewer employees earning less than an
average of $25,000 will be eligible for a
tax credit of 35 percent of health insurance
costs. Companies with 11-25 employees with
an average wage up to $50,000 are eligible
for partial tax credits. Once the exchange
is created, the tax credit will increase to
50 percent for the first two years coverage
is purchased through the exchange and then
the credit would end. While these tax
credits are retroactive to January 1, 2010,
it has not been determined how the credit
will be claimed.
In addition to
the tax credits, grant programs will also be
created to help small and mid-sized
companies develop and strengthen workplace
wellness programs.
What if your
company already provides health insurance?
If your company already provides health
insurance coverage for employees, there are
still a few things to consider and
anticipate. For example, beginning in 2014,
employers who offer health benefits but have
at least one employee who applies for a
federal subsidy to purchase insurance on
their own would be subject to a an
annualized penalty of $3,000 for each
employee who has qualified for subsidized
coverage. Employees are eligible for the
federal subsidy if the employer provided
plan does not have an actuarial value of at
least 60 percent or if the employee share of
the premium exceeds 9.5 percent of their
income. In addition, employers may still be
required to help low and middle-wage earners
who opt out to buy coverage on their own.
Specifically, an employee who earns less
than four times the federal poverty level,
$88,200 for a family of four, will have the
option to purchase coverage through the
exchange. In turn, the company would have to
provide a “free-choice voucher,” which must
be equal to the amount paid to provide
coverage to all other participating
employees. Furthermore, companies with more
than 200 employees will be required to
automatically enroll new hires into the
health plan, but the new hire can
voluntarily opt-out after enrollment if they
choose. There is no penalty for workers in a
waiting period, but employers must limit the
period to 90 days beginning in 2014.
Plans that were
in effect on the date of enactment, March
23, 2010, are grandfathered-in and able to
keep their existing coverage; however, they
must still comply with the following
requirements on their respective effective
dates: no lifetime limits, restrictions on
annual limits, restrictions on coverage
rescissions, coverage of dependent adult
children, coverage of dependent children
with pre-existing conditions, coverage of
adults with pre-existing conditions, and
maximum 90 day waiting periods.
So, what
should be done now?
The good news is that most of the major
changes won’t occur until January 1, 2014,
so there isn’t much that employers have to
do right away. There are several plan
changes that insurance companies are
required to make on your plan’s renewal
date, so expect to receive communication
regarding these changes and communicate them
to your employees and new hires
appropriately. The timeline below provides
an explanation of when changes are expected
to occur that may affect employers.
|
Tax
Years 2010-2013 |
Employers with fewer than 25
employees many take advantage of tax
credits in exchange for providing
healthcare benefits. |
|
June 23,
2010 through December 31, 2013 |
Employers will be able to
participate in an incentive program
to provide coverage for retirees
over the age of 55 who are not
eligible for Medicare.
A
temporary high-risk insurance pool
will be created to provide health
care to individuals with
pre-existing medical conditions who
have been uninsured for at least six
months. |
|
Effective for plan years beginning
on or after September 23, 2010 or
for calendar year plans beginning
January 1, 2011. |
Insurers
will not be able to deny coverage to
children who have pre-existing
medical conditions.
Insurance companies will have to
provide coverage for dependent
children up to the age of 27,
regardless of educational or marital
status. However, the adult child
must not be eligible to enroll in
another eligible employer-sponsored
health plan.
Plans
can no longer set “lifetime limits”
on essential benefits regarding how
much they will pay, except in cases
of fraud.
Health insurance plans will be
required to cover preventative
services such as immunizations for
children and cancer screenings for
women.
Policies cannot be cancelled for
those who get sick. |
|
January
1, 2011 |
The
federal tax on individuals who spend
money from Health Savings Accounts (HSAs)
on ineligible medical expenses will
double to 20 percent.
The
Aggregate cost of applicable
employer-sponsored coverage must be
reported annually on the employee’s
Form W-2. |
|
January
1, 2013 |
The
limit on how much individuals can
contribute to flexible spending
accounts (FSAs) will be set at
$2500.
The
Medicare tax rate will increase from
1.45% to 2.35% on earnings over
$200,000 for individuals and
$250,000 for families. |
|
January
2, 2014 |
Companies with 50 or more employees
will be required to pay a penalty
($2,000 annualized) for each
employee if the company does not
provide a health insurance plan.
(The threshold for construction
companies was increased from 5 to 50
as a part of the reconciliation
process.)
Companies with 50 or more employees
would pay a fine if any of their
full-time workers qualified for
federal health care subsidies.
A
state-based health care exchange
system will be created as a
marketplace for uninsured
individuals and small businesses to
comparison shop for insurance
policies.
Health plans will be required to
meet minimum benefits standards
covering a minimum of 60 percent of
costs.
All
annual limits must be eliminated
from health plans.
Adults with pre-existing conditions
can no longer be denied coverage.
Employers must automatically enroll
employees into the company’s health
plan. Employees may opt out later.
Waiting periods of more than 90 days
are not permitted. |
|
January
1, 2018 |
A 40
percent tax would be imposed on
healthcare plans that cost more than
$11,850 for individual coverage and
$30,950 for family coverage. This
amount is higher for construction
employers than most other industries
because construction is one of many
high-risk industries and excludes
the value of dental and vision
benefits.
States may choose to allow large
companies with 200 or more employees
to purchase coverage through the
exchanges. |
Note: While this article focuses mainly on
the requirements for employers, for
companies that self-insure, both the insurer
and employer requirements are applicable.
For more
information please contact
Tamika C.
Carter, Associate Director, Construction
HR, 703-837-5382.
Health Care
Provisions Important to the Construction
Employer Community
March 25, 2010
Click here for
a document distributed by AGC of America that
reviews some specific provisions important to
the construction employer community in the
Patient Protection and Affordable Care Act
(Public Law 111-148).
Although the bill
was signed into law Tuesday the Senate continues
to work on the Reconciliation package and they
are expected to finish debate and pass it
tomorrow. The changes within the Reconciliation
bill are highlighted in the attached document
and the most noticeable change is the removal of
the Merkley Language, the Reconciliation bill
would restore the small business exemption for
the construction industry.
AGCA will continue
to update the
document.
More Construction
Firms Likely to Perform Stimulus-Funded Work in
2010 as Funding Expands Beyond Transportation
Programs
February 16, 2010
Analysis of
Stimulus Data Shows Program Delivering More
Construction Jobs than Initially Estimated,
Helping Boost Transportation Spending,
Contractors Group Notes
Stimulus funded
infrastructure projects are saving and
creating more direct construction jobs than
initially estimated, according to a new
analysis of federal data released today by
the Associated General Contractors of
America. The analysis also found that more
contractors are likely to perform stimulus
funded work this year as work starts on many
of the non-transportation projects funded in
the initial package.
“The stimulus is
one of the very few bright spots the
construction industry experienced last year
and is one of the few hopes keeping it going
in 2010,” said Ken Simonson, the
association’s chief economist. “The stimulus
is saving construction jobs, driving demand
for new equipment and delivering better and
more efficient infrastructure for our
economy.”
Simonson noted
that new federal reports show the $20.6
billion dollars worth of stimulus highway
projects initiated over the past twelve
months have saved or created nearly 280,000
direct construction jobs. That amounts to
15,000 jobs per billion dollars invested,
well above pre-stimulus estimates that every
billion invested in infrastructure projects
would create 9,700 direct construction jobs.
The economist
added that heavy and civil engineering
construction employment was stable last
month even as total construction employment
declined by 75,000. Meanwhile, highway and
road construction was one of the only areas
to see an increase in spending last year
even as total construction spending fell by
$100 billion. The two figures are a clear
sign the stimulus is having a significant,
and stabilizing, impact on the industry,
Simonson noted.
Simonson cited
examples like Pittsburgh’s Golden Triangle
Construction Co as an indication of the
benefits of investing in infrastructure. The
company is hiring two new engineers and over
100 employees this spring just to perform
$24 million worth of stimulus-funded
projects this year.
It also is
ordering new construction equipment to
perform the work from Ripon,
California-based Guntert and Zimmerman. As a
result, the equipment maker saved 40 jobs on
its assembly line. And thanks to its
stimulus work, Golden Triangle decided to
complete construction of its delayed
headquarters, providing even more local
construction jobs.
Simonson
cautioned however that overall declines in
construction activity have, and likely will
continue to overshadow the benefits of the
stimulus. “The stimulus will keep a bad
situation from deteriorating further,”
Simonson said. “That may not make for great
headlines, but it is welcome news for
construction workers anxious to continue
receiving paychecks.”
Read Ken Simonson’s analysis of the impacts
of the stimulus.
Nearly 90 Percent
of Contractors Say Industry Will Not Recover in
2010 as Construction outlook Finds Stimulus Lone
Bright Spot
Construction
Firms Predict Drop in Private-Sector Work, Fewer
Equipment Purchases Amid Widespread Uncertainty
About 2010 Hiring & Lay Off Plans
January 20, 2010
Nearly nine-in-ten
contractors say there will be no recovery in
2010 as part of a new national construction
hiring and business outlook forecast released
today by the Associated General Contractors of
America. As a result, fewer contractors plan to
purchase construction equipment and after a year
of near-record industry layoffs, many doubt
they’ll be able to hire new staff this year.
“Unfortunately for
the industry and for our economy this year’s
construction outlook is far from positive,” said
Stephen E. Sandherr, the association’s chief
executive officer. “As long as the construction
industry remains mired in its own depression,
broader economic and employment growth will
continue to lag.”
The outlook, which
is based in part on survey responses from nearly
700 construction firms submitted in late
December and earlier this month, shows that
privately-funded construction activity is likely
to decline even further this year. Indeed, 64
percent of responding contractors expect demand
for new manufacturing facilities will decline,
while 71 percent expect demand for new retail,
warehouse and lodging facilities will drop.
As a result, the
number of firms expecting to buy new equipment
is down to 46 percent this year from 61 percent
in 2009. Meanwhile, 81 percent of firms report
already having to cut profit margins in their
bids just to stay competitive and another ten
percent say they are now submitting bids so low
they will actually lose money on the projects.
Sandherr added that
many construction firms are uncertain that
they’ll be able to add staff following a year of
record layoffs. In 2009, 73 percent of firms
said they laid off employees, averaging 39
layoffs per firm. For 2010, however, 60 percent
of firms say they are unsure whether they will
be able to add new staff, or be forced to make
further cuts. “Perhaps they can’t imagine who
else to let go,” Sandherr noted.
One of the
relatively few bright spots for the industry was
the federal stimulus. Thirty-one percent of
contractors say they were awarded stimulus
funded projects. Of these, 46 percent say the
stimulus helped them retain an average of 24
employees each. Another 15 percent say the
stimulus helped them to add an average of 10 new
employees per company while 12 percent cite the
stimulus as driving new equipment purchases.
Sandherr added that
the stimulus is driving up expectations for
publicly-funded construction activity in 2010.
He noted that 62 percent of contractors expect
the highway market to improve or remain stable,
61 percent say water and sewer construction will
improve or remain stable. And 55 percent say
work on public buildings will improve or remain
stable in 2010.
“The stimulus is
finally beginning to have a measurable, but
limited, impact on the construction industry,”
Sandherr noted. “The full impact of those
investments has sadly been tempered by the
inability of Congress to put a host of
multi-year infrastructure funding plans in
place.”
In addition to
stimulus-funded projects, contractors also are
relatively upbeat about prospects for power and
hospital/higher education construction.
Fifty-two percent expect demand for power
facilities to be at or above last year’s levels
while 57 percent of contractors expect growth or
stability in demand for hospital and higher
education construction.
Overall, however,
the outlook points to another difficult year for
contractors Sandherr said. The only truly good
news, he added, is that construction costs
remain at multi-year lows, providing good deals
for anyone willing to begin a construction
project.
Citing examples like
a DC-area county that is increasing its capital
budget in light of the “limited time sale,”
Sandherr said the association was contacting
Congressional and Administration leaders to urge
them to invest in new construction activity. “If
they act now, they can save taxpayers millions
on construction costs while immediately boosting
employment and economic activity,” Sandherr
said.
Membership Directory Fraud Alert
November 9, 2009
After reports
earlier this year regarding a fraudulent
Membership Directory Listing Application, they
are at it again. AGCA believes that the fax is a
SCAM. Scam solicitations, like the ones attached
have once again begun to circulate.
Neither AGC of
America nor their directory provider sent this
fax. They have already sent two cease and
desists letter and are in discussions with
outside lawyers regarding additional actions.
This is NOT an AGC
directory and members should be careful in
responding to the fax and providing money to
this inquiry.
Questions can be
directed to:
Elisa Brewer Pratt, Senior Director, Chapter
Support Services
The Associated General Contractors of
America
2300 Wilson Boulevard, Suite 400
Arlington, VA 22201
Direct Phone - (703) 837-5343
email:
brewere@agc.org
www.agc.org
AGCA Launches New
Recovery Plan Website
October 26, 2009
New Site
Includes Interactive Features, Update on Plan's
Progress
AGC of America today
launched a new website for its construction
industry recovery plan, “Build Now for the
Future: A Blueprint for Economic Recovery.” The
new site, http://blueprint.agc.org, includes new
interactive features, like real-time updates on
each of the 30 measures outlined in the plan,
and easy-to-use features to allow members and
industry friends to send letters of support to
congress, download sample op-eds and post links
to the plan on Facebook and Twitter.
Federal Contractor E-Verify Rule Now in Effect
September 8, 2009
A rule requiring
federal contractors and subcontractors to use
the Department of Homeland Security U.S.
Citizenship and Immigration Services’ E-Verify
system to verify their employees' authorization
to work in the U.S. is now in effect. The rule
applies to federal solicitations and contract
awards government-wide beginning today,
September 8.
The rule applies
only to employers with direct contracts with the
federal government and, via a flow-down
requirement, to their subcontractors. It does
not apply to employers working only on federally
funded projects or on other projects not under
contract with a federal agency.
The rule requires
the insertion of a new clause in certain federal
contracts and subcontracts. Prime contracts
below the simplified acquisition threshold of
$100,000 and those with performance terms of
less than 120 days are excluded. The clause
requires the contractor to use E-Verify to
confirm employment eligibility of all new
employees hired during the contract term and all
current employees assigned to work on a federal
job within the U.S. It also allows, but does not
require, the federal contractor to use E-Verify
to confirm eligibility of all employees,
regardless of whether they are assigned to work
on a federal job. Currently, use of E-Verify to
confirm anyone other than a new hire (including
applicants and current employees) is prohibited.
The FAR Council
issued the final rule in November 2008. In
response to a legal challenge to the rule and in
order to give the new administration time to
fully review the matter, the government agreed
to suspend the rule on three separate occasions,
but, in a
July 8 statement, DHS Secretary Janet
Napolitano announced that DHS will "push ahead
with full implementation" of the rule without
further delay.
Although the
litigation continues, we are advising
contractors to carefully review all new
solicitations and contracts for federal projects
and comply with any E-Verify requirements at
this time. AGC will continue to monitor all
related litigation and legislation and will
report on significant developments.
Click here for the E-Verify Supplemental
Guidance for Federal Contractors issued by USCIS
on September 8.
Click here for DHS's list of Frequently
Asked Questions (FAQ's) for Federal Contractors
and E-Verify.
Click here for more information about
critical components of the rule.
Click here for information about free
webinars on the E-Verify program.
Further guidance on
immigration compliance is available in an
MP3 download of a live educational session
held at AGC's Annual HR Professionals Conference
in June 2008. An immigration law update will
also be provided at AGC's next HR Professionals
Conference, which will take place October 27-29,
in Atlanta, Ga. Click here for conference
details and registration.
For more
information, contact Denise Gold at (703)
837-5326 or goldd@agc.org, or Marco Giamberardino at
(703) 837-5325 or
giamberm@agc.org.
