5 crucial issues impacting the construction industry

Contractors in all sectors of the construction industry have expressed their frustrations about how much meeting regulatory requirements is costing them. A recent National Association of Home Builders report found that government fees — local, state and federal — added nearly 25% to the cost of a home. Trade associations are also fighting the Department of Labor over new stipulations in the agency's silica and overtime rules — changes the industry said will cost contractors millions, perhaps billions, to fully comply. Costs to homebuilders are so steep that they are limiting the supply of entry-level homes, making it more difficult for first-time buyers to enter the housing market.

Among the rules receiving pushback from the construction industry, these are some of the most controversial right now:
Silica rule
The DOL's Occupational Safety and Health Administration enacted new requirements in March under its existing silica rule that further restrict worker exposure to "respirable crystalline silica," which is dispersed into the air whenever silica-containing materials are cut or ground, which occurs often on most construction sites. Constant breathing of silica dust, which is 100 times smaller than sand, can result in severe respiratory illnesses such as silicosis, lung cancer and tuberculosis, according to the Centers for Disease Control.
Although there has been a silica rule on the books since the 1970s, OSHA determined that lowering exposure limits from 250 micrograms per cubic meter of air over an average of eight hours to 50 micrograms and instituting certain medical surveillance measures could save approximately 600 worker lives annually and prevent approximately 900 new cases of silica-related health problems. The rule also requires that contractors utilize additional engineering controls — such as water or ventilation to manage the dust — or provide appropriate personal protective equipment to exposed workers.
OSHA estimates the new rule will cost the construction industry as a whole approximately $500 million for implementation. However, the Construction Industry Safety Coalition (CISC), a group made up of a wide range of trade associations including the Associated General Contractors of America and the Associated Builders and Contractors, contend that the measure will cost almost $5 billion per year in direct costs, productivity loss, medical surveillance and recordkeeping. Although the CISC argued that the technology required to monitor the new exposure limits is not available to most contractors, construction trade unions have fired back and have said the technology has been available for a few years now and that even the new OSHA requirements are, in essence, outdated.
Major industry groups, including the AGC and ABC, have filed a legal challenge to block implementation of the rule, which is set to take effect June 23 and gives construction companies one year to comply.
Overtime wage rule
Another DOL rule that has galvanized major trade associations in opposition is the agency's new overtime rule, which raises the exempt threshold for salaried workers from $23,660 to $47,476 per year. In other words, salaried workers making less than the new threshold must be paid overtime wage rates if they work more than 40 hours in a week. Not only did the DOL raise the threshold, but the new rule allows for automatic increases every three years.
The chairman of the National Association of Home Builders, Ed Brady, called the DOL's action "sheer arrogance," and the ABC said the rule would only spur companies to put salaried employees on an hourly pay schedule. The ABC added that the exemption amounts did not take into consideration different pay levels in various regions of the country. Several major trade associations have said that the new rule would not raise wages but, on the contrary, force companies to reduce hours and benefits.
Davis-Bacon Act
Not quite as firmly in the construction industry crosshairs at the moment like the silica and overtime rules, but still a point of contention, ...  Read the rest of the Article


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