enrolled in coverage offered to employees by the employer will not fail to maintain a qualifying arrangement just because the employer does not pay a uniform percentage of the premium for each worker according to the IRS.  The requirement that the employer pay at least half of the premium for an employee applies to the premium for single coverage.  Thus, if the employee is receiving single coverage, the employer meets the 50% requirement with regard to the employee if it pays at least 50% of the premium for that coverage.  If the worker is receiving coverage for a more expensive plan, such as family coverage, the employer satisfies the 50% requirement for the worker if the employer pays an amount of the premium for such coverage which is no less than half of the premium for single coverage for the worker.  Small employers may claim the full amount of the credit if they have 10 or fewer FTEs and if there average taxable wages are $25,000.00 or less.  The credit is phased out as the number of FTEs increases from 10 to 25 and as average employee compensation rises from $25,000.00 to $50,000.00.  The IRS FAQs may be found at http://www.irs.gov/newsroom/article/0,,id=220839,00.html.                  By Bill Harding, Chapter Attorney

CONSTRUCTION BACKLOG INCREASES TO SEVEN MONTHS IN MAY: Construction backlog reached 7 months in May, a 27 percent increase compared to January, ABC reported July 20 in its Construction Backlog Indicator (CBI).  “While this latest data indicate a broader improvement in nonresidential construction activity, there may be several alarming reasons for the increase including the financial failure of competitor firms leaving more opportunities for surviving companies, or contractors accepting projects with lower profit margins,” said ABC Chief Economist Anirban Basu.

Compared to one year ago, all regions across the country experienced a rise in backlog, with the exception of the South.  The Northeast reported the highest backlog in May of 7.5 months, and the Middle States had the shortest backlog in May of 6.6 months, which is still one month higher than May 2009.  “As a greater share of stimulus-financed projects moves from money-obligated status to groundbreaking status, the expectation is that the improvement observed in recent months will continue in all major regions of the nation,” Basu said.

By industry, commercial and institutional construction dropped from 7.2 months in April to 6.9 months in May and heavy industrial construction reported a backlog of 7.86 months – the highest in the history of the CBI.  Infrastructure construction has the longest backlog of 8.75 months.

Firms with more than $100 million in annual revenue still report the longest backlog at 9.4 months and firms with revenue between $30 million and $50 million saw their backlog decline by half a month between April and May.  Compared to one year ago, firms with revenue less than $30 million saw a 1.3 month increase in backlog in May.  “For the first time, there is indication of a broadening nonresidential construction recovery, perhaps a reflection that credit conditions are beginning to thaw and that the broader economic recovery is finally being reflected in privately financed nonresidential construction activities,” Basu said. “However, there is still reason to doubt the sustainability of the emerging nonresidential construction recovery for a variety of reasons, including ongoing underperformance of commercial real estate.”

ABC AND 54 CHAPTERS SPEAK OUT AGAINST INCREASED EMPLOYER PENALTIES:ABC and 54 of its chapters July 20 signed onto a letterexpressing opposition to provisions in the Miner Safety and Health Act of 2010 (H.R. 5663) in advance of a markup of the bill.  The letter was sent by the Coalition for Workplace Safety (CWS), of which ABC is a member, to Rep. George Miller (D-Calif.), chair of the U.S. House of Representatives Committee on Education and Labor, and Rep. John Kline (R-Minn.), ranking member on the Committee.  More than 200 other organizations and their chapters signed the letter.

H.R. 5663 uses language from the Protecting America’s Workers Act (H.R. 2067/S. 1590) which affects employers in all industries by amending the Occupational Safety and Health (OSH) Act by changing the penalty scheme for safety violations by altering the requirement for criminal liability from acts that are deemed “willful” to acts that are deemed only “knowing,” and broadening the definition of employer from “any responsible corporate officer” to “officer or director.”

In addition to the letter sent by CWS, ABC sent a separate letterto Miller and Kline July 20 noting out that under the bill employers could be required to make immediate and costly changes in response to a citation without the Occupational Safety and Health Administration (OSHA) showing that there is an imminent threat and without being provided a hearing or judicial review of the inspector’s allegations.  ABC also pointed out that most inspectors are not industry experts and lack knowledge or background in industry-specific safety practices and operations and that the increased emphasis on enforcement would take away the cooperative relationship most ABC members enjoy with OSHA.

“In order to work towards our shared goals of healthy and safe workplaces, OSHA must be a resource for employers as well as an enforcement agency,” ABC said in the letter. “However, we strongly believe H.R. 5663, as introduced, will not improve safety but will instead create greater cost and litigation, and hamper job creation.”

FLSA UPDATE:On May 26, the U.S. Court of Appeals for the Eleventh Circuit affirmed a federal trial court decision that a former salaried crane dispatcher for a crane rental company is not entitled to overtime compensation under the FLSA.  The duties of the employee involved communicating with customers, helping customers select cranes for specific jobs, supervising other employees and keeping the crane rental records.  After the employee resigned, he filed a lawsuit claiming that the company owed him unpaid OT under the FLSA.  The federal court, however, concluded that the employee qualified for the administrative exemption to OT under the FLSA because he was paid a weekly salary in excess of $455.00 and his primary duties involved office or non-manual work directly related to the performance of the management and general business operations of the company.  The court rejected the argument of the employee that his work was primarily sales-oriented.  The court also concluded that the job required the exercise of discretion and independent judgment because the evidence showed that the employee could hire and fire employees, set the pay levels for employees and had authority to resolve a wide array of technical problems.  The court noted that dispatchers in the bus and trucking industry would not qualify for the exemption but that the dispatcher in the crane rental company in this case did qualify for the exemption.  This decision is a reminder to all construction industry employees who seek to take advantage of any of the exemptions from the OT pay requirements of the FLSA that the duties assigned to the employee will be critical to the outcome of any litigation.  At a minimum, construction companies wishing to take advantage of one of the OT pay exemptions in the FLSA should develop a carefully written job description which matches the requirements of the regulations and then be sure that the employee actually performs such duties.     
                                                                          By Bill Harding, Chapter Attorney

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