Virginia Foxx Slams Biden Admin's Labor Rule That Could See Contractors 'Subjected To Wage Theft'

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During a House Oversight Committee hearing prior to the Congressional recess, Rep. Virginia Foxx (R-NC) questioned witnesses about Biden Administration labor rules.

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Transcript

00:00Yeah, mostly right. I'd like to recognize Ms. Fox, the Queen, for five minutes.

00:04And you don't have to stay, but I know how to pronounce it, too.

00:08Okay.

00:10But I'll start with Mr. Brubeck, and I thank the chairwoman for holding this hearing today, also,

00:17and thank our witnesses for being here. Mr. Brubeck, your written testimony mentioned that

00:22the limited number of non-union contractor employees who are possibly allowed to work

00:28on a PLA project would be subjected to wage theft. Can you explain how that works in practice?

00:36Yeah, so typical PLAs, and they can vary from job to job, but what I've seen typically is they

00:41force contractors to pay their fringe benefits into the union pension and benefits plans as a

00:46condition of winning the contract. And if you're a non-union worker, you're allowed to work on a PLA

00:52project, which may be in limited numbers, let's say you can, you would have all that money paid

00:57into those plans on your behalf, but you would forfeit that unless you joined the union and

01:02became vested in those plans. Where I come from, and what I hear from our contractors, that's wage

01:06theft. A lot of contractors will actually make sure that those employees come back and work with

01:11them after the project is done, and what they'll do is they'll actually pay for those additional

01:16benefit costs that they're going to lose, get stolen from them, and they'll pay into their

01:20existing plans the company has. But what happens is that puts that contractor at a severe competitive

01:25disadvantage. They have to have double benefit payment costs, which is yet another reason why

01:29these contractors will not pursue these PLA projects. And so what you're describing is

01:37that the employer then is also exposed to multi-employer pension plans, correct?

01:46That's right. So the employer is making the contributions to the union pension plans

01:51as required by the PLA as a condition of performing the project. And a number of these

01:56multi-employer pension plans are extremely underfunded, and what happens for the contractors

02:01that pay into these plans is they can become liable for future liabilities of the pension plans

02:05when they can no longer make the promises that they've made to the union workers that deserve

02:10benefits from these plans. And so when that happens, they get a bill for their liability,

02:16and that can be extreme. That can prevent them from getting bonding. That can prevent

02:19them from qualifying from future contracts. So they don't want to be on the hook just for one

02:24project. And PLA advocates will say, well, you can be exempt from that type of pension withdrawal

02:29liability. There's actually been legal cases where they've signed the exemption, and the judges come

02:33back and said, no, it still applies to you, sorry. And these companies either go bankrupt or have to

02:38completely reduce their operation as a result of this.

02:41Right. As I've railed against many times, the American Rescue Plan contained a provision

02:48providing over $90 billion to the PBGC bailing out these poorly performing multi-employer pension

02:56plans that were unable to pay the defined benefit pension promises that were made

03:01to worker beneficiaries, many of which were plans in the construction industry.

03:06Why would anyone think that forcing workers to pay into these poorly performing plans is a good

03:12idea and in the best interest of the construction workers? Mr. Brubeck, sorry.

03:19Yeah, no, that's, it's a great question. I know a number of our employees are taken care of by

03:25401k or profit sharing or all kinds of great programs that transfer with them, and they have

03:30certainty in that. And a lot of the folks getting into the industry aren't sure about whether the

03:35pensions will be available. I understand that's why the bailout was made for some of these programs

03:40and plans, but it's certainly something that we're concerned about, and workers are concerned

03:44about their future retirements, and not, and not knowing if it's there or not, and not knowing if

03:48the government's going to have to bail them out another time. Right. I think, Mr. Ledet, that I

03:53walked in as Mr. Brubeck was talking about how much PLAs increase costs for federal construction

03:59projects. So I'll not ask you that question, but how does this increase in cost impact your ability

04:06to budget and your ability to use the limited resources available to complete much-needed

04:12construction projects? Yeah, thank you. It, CPRA is the non-federal sponsor of major infrastructure

04:20in our state to protect our citizens from flooding, and so any time the cost goes up, the

04:25cost also for the federal government, it also goes up for us, the non-federal. And so those cost

04:30increases that we referenced, if it's 400 million, we pay 35 percent of that. And then if there are

04:35schedule delays, that's just prolonged time that our citizens are at risk. Right. And I think you

04:42all have, you alluded, particularly, I think, earlier, to PLA mandates creating new workforce

04:51shortages if contractors refuse to bid for work under a PLA. I think all of you have probably

04:58talked about that. So we all know that there's a huge worker shortage. I'm the chairwoman of the

05:04Education Workforce Committee. We're dealing with this every day. I meet with employers every day

05:10who tell me they cannot find skilled workers, and construction is one of the main areas. And so

05:16I just want to thank you all for what you're doing and for the work that you're doing to try

05:22to protect workers in this country. As my colleague Mr. Higgins said, people who choose not to join

05:29unions, he's right. This is about freedom. This is all about freedom in our country, and people

05:36being, well, if they want to join a union, they can, but nobody's holding a gun to their head to do it,

05:42and nobody should be holding a gun to your, the heads of contractors, to have a PLA. And what

05:49this is all about is freedom in our country. Thank you, Madam Chair. I yield back. I'd like to

05:54recognize Mr. Allen for five minutes. Thank you, Chairwoman.

Virginia Foxx Slams Biden Admin's Labor Rule That Could See Contractors 'Subjected To Wage Theft'

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