CHAPTER 14 CONSTRUCTION LABOR

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CHAPTER 14CONSTRUCTION LABOR
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BIOMETRIC IDENTIFICATION RECOGNITION

• The Need Even though visitors. Office workers
  and residents are given keys or id badges after
  being screened, there is still a possibility that
  unauthorized people could access important
  property with fake ids or keys, etc. Recently,
  biometric technology has arisen as a new,
  effective and secure method for identification
  recognition of personnel
• The Technology Biometric are computerized
  methods of recognizing people based on physical
  or behavioral characteristics. The main biometric
  technologies include face recognition,
  fingerprints, hand geometry, iris palm prints,
  signature and voice

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Biometric Identification Devices
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14.1 LABOR RESOURCE

• The man-power component of the four Ms of
  construction is by far the most variable and
  unpredictable
• Man-power or labor has four major aspects that
  have an interest to management
• To properly understand the management and control
  of labor as a resource, the manager must be aware
  of the inventory among the following elements
• Labor organization
• Labor laws
• Labor costs
• Labor productivity
• Labor includes added human factor

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14.2 SHORT HISTORY OF LABOR ORGANIZATIONS

• The history of labor organizations begins in
  early 19th century
• Initially tradesman possessing some skill or
  craft began organizing, called guilds,
  brotherhoods or mechanic societies
• Their objective was to give widows and children
  health and death benefits
• They were secret organizations because they
  were unlawful
• From 1840s until 1930s, the history of labor
  organization is the saga of confrontation between
  management and workers
• American Federation of Labor (AFL) was organized
  by Samuel Gompers in 1886. This was the first
  successful effort to organize skilled and craft
  workers as opposed to industrial assembly line
  workers
• The Building and Construction Trades Department
  of the AFL, which is the umbrella organization
  representing all construction craft unions, was
  organized in 1908
• The semi-skilled and unskilled factory workers in
  sweat shops, plants and mills were unorganized
  at the time Gompers started AFL
• Gompers was interested in protecting the rights
  of skilled workers and little interest in the
  unskilled labor organization
• In the 1930s, industrial (i.e. factory,
  semi-skilled) workers began to organize
  effectively with the support of legislation
  evolving during the post-depression period

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SHORT HISTORY OF LABOR ORGANIZATIONS CONTD.

• AFL, realizing such organizations might threaten
  its own dominance, recognized these organizations
  by bringing them into AFL
• But industrial workers were treated as 2nd class
  citizens by older craft folks
• This led to friction and rivalry, which
  culminated in the formation of the Committee for
  Industrial Organizations (CIO). This committee
  was established in 1935 unilaterally without
  permission from governing bodies of AFL
• The AFL board ordered the committee to disband or
  be expelled from the industrial unions
• In response, the unions organized as the Congress
  of Organization (CIO) with John Lewis of the
  united mine workers as the first CIO President
• In 1955, two organizations combined to form
  AFL-CIO. This organization remains the major
  labor entity in the U.S. today

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14.3 EARLY LABOR LEGISLATION

• The courts and legislative bodies of the land
  have alternatively operated to restart or
  accelerate the progress of labor organizations
• See table 14-1 for the chronology of major items
  of legislation and the significant events in the
  labor movement
• At the outset, the law was such that the
  management was controlling the situation
• The more classic illustration of this is the
  application of the Sherman Antitrust Act, enacted
  in 1890 to suppress the formation of large
  corporate trusts, which dominated the market and
  acted to fix prices and restrain free trade
• More recently, Microsoft Corporation reviewed by
  DOJ to prevent dominance in the computer market
• In 1980, the Supreme Court ruled that the
  Antitrust law could be applied to prevent labor
  from organizing
• In 1914, Congress acted to offset the effect of
  the Sherman Antitrust Act by passing Clayton Act
• This act authorized employees to organize to
  negotiate with a particular employer
• However, in most cases the employer could
  demonstrate that the organizing was directed by
  parties outside the employers shop
• This implied that the action was not a local one
  and , therefore, was subject to action under the
  Sherman Antitrust Legislation

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Table 14-1 Chronology of Labor Law and
Organization
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14.4 NORRIS-LAGUARDIA ACT

• The passing of the Norris-LaGuardia Act was the
  major movement of the power pendulum away from
  management and toward labor
• This Act specifically stated that the courts
  could not intercede on the part of the management
  so as to obstruct the formation of the labor
  organizations
• It effectively overruled the Supreme Court
  interpretation that the Sherman Antitrust Act
  could be applied to labor organizations
• It also outlawed the yellow-dog contracts on
  the part of management
• Yellow-dog contracts are employees hired but
  agreed not to join unions
• Yellow-dog contracts were ruled illegal by the
  Norris-LaGuardia Act

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14.5 DAVIS-BACON ACT

• David-Bacon Act provided that the wages and
  fringe benefits on all federal and federally
  funded projects shall be paid at the prevailing
  rate in the area
• The level of prevailing rates is established by
  the Secretary of Labor and a list of these rates
  is published with the contract documents
• To ensure that these rates are paid, the
  government requires submittal by all contractors
  of a certified payroll
• Since the DOL accepts the negotiated union
  contract as the prevailing ones, this allows
  union contractors to bid without fear of being
  underbid by nonunion contractors paying lower
  wage rates

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14.6 NATIONAL LABOR RELATIONS ACT

• National Labor Relations Act, is also referred to
  as Wagner Act
• Its central purposes are to protect
  union-organizing activity and encourage
  collective bargaining
• Employers unfair labor practices defining
  precisely what actions are not acceptable are
  shown in table 14-2
• This act also established a watch-dog
  organization to ensure its provisions were
  properly administered. This organization is the
  National Labor Relations Board (NLRB).
• The NLRB acts as the clearinghouse for all
  grievances and issues leading to complaints by
  labor against management and vice-versa
• It is the highest tribunal below the Supreme
  Court
• This act also established the concept of a closed
  shop
• Labor organizations had fought for the right to
  force all members of a particular work activity
  (shop) to be members of a union
• If the majority voted for union membership, then
  the order to work in the shop, a new employee has
  to belong to the union
• This is in contract to the open shop in which
  employees are not recognized and do not belong to
  a union
• The Wagner Act endorsed the concept of the closed
  shop and made it legal
• This concept was later revoked by the
  Taft-Hartley Act and replaced by union shop

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Table 14-2 Employer Unfair Labor Practices
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14.7 FAIR LABOR STANDARDS ACT

• The Fair Labor Standards Act is commonly referred
  to as minimum wage law
• The law defines the 40-hour work week and time
  over this amount as overtime

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14.8 UNION GROWTH

• Under the provisions of the union legislation of
  the 1930s, the labor unions began to flourish
• Criminal activities within the unions were
  widespread and virtually unchecked
• 1943, Congress responded to the changing public
  perception of unions by passing the War Labor
  Disputes Act (Smith Connaly Act)
• It was designed to limit strikes in critical
  wartime industries
• The criminal activities in unions were recognized
  by the Hobbs (Anti-Racketeering) Act of 1946
• This legislation was enacted to protect employers
  from threats, force or violence by union
  officials extorting payments for services rendered

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14.9 LABOR MANAGEMENT RELATIONS ACT

• The Labor Management Relations (Taft-Hartley) Act
  together with Wagner Act to form two
  cornerstones of American labor relations
  legislation
• The Taft-Hartley Act amended the Wagner Act and
  revised the swing of the power pendulum once
  more, still leaving labor in a very strong
  position, but pushing the pendulum more towards
  center
• Giving management a stronger voice and to balance
  representation of labor and management
• The bill defined the rights of workers to
  participate in or refrain from union activities
• It also provides the counterpoint to the Employer
  Unfair Practices section of the Wagner Act
• The law also established the Federal Mediation
  and Conciliation Service, which acts as a third
  party in trying to expedite a meeting of the
  minds between unions and management involved in
  the dispute
• Under the Taft-Hartley legislation, the president
  is empowered to enjoin workers on strike (or
  preparing to strike) to work for an 80-day
  cooling off period during which time negotiators
  attempt to reach agreement on contractual or
  other disputes
• The president has utilized his powers under this
  provision of the law on numerous occasions since
  1947
• Closed shop was declared illegal by the
  Taft-Hartley Act
• The union shop is legal
• A union shop is one in which a nonmember can be
  hired

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LABOR MANAGEMENT RELATIONS ACT CONTD.

• The worker is given a grace period (3 days),
  during which time he or she must become a union
  member. If the new employee does not become a
  union member, the union can request that the
  candidate employee be released
• The union shop gives the worker a chance to join
  the union (fig. 14-1). If the worker requests
  membership and the union refuses after 3 days,
  management can ask the union to show cause why
  the employee has not been admitted to membership
• The law also recognizes that concept of agency
  shop
• In such facilities, a worker can refuse to join
  the union
• The employee therefore, has no vote in union
  affairs
• The worker must, however, pay union dues since he
  benefits from the union actions. Example, union
  negotiated pay increase
• Under the closed shop concept, workers were
  forced to either join the union or go elsewhere.
  The Taft-Hartley Act allows the individual states
  to enact right-to-work laws that essentially
  forbid the establishment of totally union shops

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Table 14-3 Union Unfair Labor Practices
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Figure 14-1 Contract Typical Member Clause
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14.10 OTHER LABOR LEGISLATIONS

• The Labor Management Reporting and Disclosure
  (Landrum-Griffin) Act was passed in 1959 to
  correct some of the deficiencies of previous
  legislation
• Its major objectives were
• Protection of individual union members
• Improved control and oversight of union elections
• An increased government role in auditing union
  records
• Title IV of the Civil Rights Act (enacted in
  1964) established the concept of equal employment
  opportunity
• This legislation was expanded by the Civil Rights
  Act of 1991. It forbids discrimination on the
  basis of race, color, religion, sex or national
  origin. It is administered by EEOC
• Executive Orders 11246 and 11375 further
  amplified the government position on equal
  opportunity

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14.11 VERTICAL vs. HORIZONTAL LABOR ORGANIZATION
STRUCTURE

• The traditional craft unions are normally
  referred to as horizontally structured
• Contract negotiations are conducted at the local
  level and all major discussions are concentrated
  at local levels
• The construction unions are craft unions with
  strong local organizations
• The Associated General Contractors (AGC) in the
  local area often act as the contractors
  bargaining unit
• Vertical structured unions tend to concentrate
  more of the power at the national level. Labor
  contracts are negotiated at the national level
• The industrial unions of CIO have traditional
  organizations in a vertical structure, while the
  construction unions of the AFL maintain the
  strong local horizontal structure

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14.12 JURISDICTIONAL DISPUTES

• Major difficulties inherent in the horizontal
  craft structured union is the problem of craft
  jurisdiction. Job jurisdiction disputes arise
  when more than one union claims jurisdiction over
  a given item of work
• This primarily because many unions regard a
  certain type of work as a proprietary right and
  jealously guard against any encroachment.
  Example traditionally, windows and doors
  installation had been considered a carpentry
  activity. However, the introduction of metal
  frames led to disputes between carpenters and
  metal workers

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SCOPE OF WORK

• See page 236 for the agreement that covers all
  employees employed by employers
• Jurisdictional disputes present less problem in
  vertically structured unions since craft
  integrity is not a matter that determines the
  strength of the union
• UAW is a typically vertically structured union.
  Therefore, UAW workers can be installing windows
  today and can be moved to installation of
  electrical wiring next month. Craft integrity
  does not have to be jealously protected

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Fig. 14-2 Structure typical of an affiliate of
the building and construction Trade Department,
AFL-CIO
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UNION STRUCTURE

• The largest labor organization is the AFL-CIO
• The building and construction trade unions are
  craft unions and as such are affiliates of the
  Building and Construction Trade Department of the
  AFL-CIO
• The structure of affiliates from local to
  national level is shown schematically in fig.14-2
• See table 14-4 for a history of the construction
  unions that are within the AFL-CIO. Most
  construction unions are affiliated with the
  AFL-CIO

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Table 14-4 AFL-CIO Construction Unions
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NATIONAL UNIONS

• National unions are defined as these having
  collective bargaining agreements with different
  employers in more than one state and federal
  employee unions with exclusive bargaining rights
• In construction unions, however, the locals still
  play the most important role in collective
  bargaining and, therefore power still resides at
  the local level
• Each union has exclusive jurisdiction to function
  as the workers representative in its trade or
  branch of industry
• The daily conduct of the union business is in the
  hands of the national president

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STATE FEDERATIONS AND CITY CENTRALS

• State federations are concerned mostly with
  lobbying for needed legislations and public
  relations at the state level
• City centrals are concerned more with economics ,
  serving as a clearing house for locals and aiding
  in dealings with employers

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UNION LOCALS

• The locals are the smallest division of the
  national union
• They provide a mechanism through which the
  national union can communicate with its members
  at the local level
• Local provide for contact with other workers in
  the same trade and are a means by which better
  working conditions are obtained, grievances are
  settled, etc.
• The most important local official is the business
  agent, a full-time employee of the local. He
  exercises a great deal of leadership

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UNION HIRING HALLS

• One of the features of construction labor is its
  transient nature
• Union hiring halls provide a referral service
  that links available labor with contractors
  request

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SECONDARY BOYCOTTS

• Legality of boycotts influence labor disputes has
  been an issue of primary importance throughout
  the history of labor management relations
• A boycott is an action by one party to exert
  economic and social pressure on a second party
  with the intent of influencing the 2nd party
• A secondary boycott is one in which party A who
  had a dispute with party B attempts to bring
  pressure on by boycotting party C who deals with
  party B and who can bring indirect pressure on
  party B to agree to some issues. This is shown on
  fig. 14-3
• If the electrical workers in a plant, fabricating
  small appliances go to a factory and form a
  picket line to get agreement - primary boycott
• If however, the workers send some of their
  members into the town and put pickets up at
  stores selling appliances from the plant
  secondary boycott
• In the construction industry, such secondary
  boycotts occur on sites with both union and
  nonunion workers when a union attempts to force a
  nonunion subcontractor to sign a union contract
• This is secondary boycott and Taft-Hartley Act
  declared this to be illegal

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SECONDARY BOYCOTTS CONTD.

• In such cases, the union will put up a picket
  line at the entrances to work sites, in effect,
  to picket or boycott the nonunion sub
• Labor unions, however, demands that no union
  worker can cross another union picket line
• In effect the union picket line will be to
  prevent all union workers from entering the site
• This may cause the shutdown pending resolution of
  the nonunion subs presence on the site
• In this situation, the GC is a third party being
  pressured by the union to influence the nonunion
  sub. This is called common situs
• Supreme Court ruled this practice to be a
  secondary boycott and hence illegal under the
  Taft-Hartley Act
• The doctrine of separate gates was developed to
  deal with secondary boycott problems
• Under this policy the GC puts a separate gate for
  nonunion sub with whom the union has a dispute
• The union is then directed to place its picket
  line at this gate rather than the main project
  gate

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Fig. 14-3 Types of boycotts (a) primary boycotts
and (b) secondary boycotts
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OPEN SHOP AND DOUBLE-BREASTED OPERATIONS

• In recent years escalating union wage settlements
  have led to an upsurge in the number of open-shop
  subs successfully bidding on large projects
• In an open-shop firm there is nonunion agreement
  and workers are paid on a merit basis
• The largest group of open-shop or merit shop subs
  is represented by ABC
• In order to be able to bid to both open-shop and
  union formats, some firms have organized as
  double-breasted contractors
• Large firms will have one subsidiary that
  operates with nonunion contracts. A separately
  managed company will be assigned to all union
  contracts

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LABOR AGREEMENTS

• Just as the contractor enters into a contract
  with the client, with vendors supplying materials
  (i.e. purchase orders) and with subs working
  under his direction, if union labor is utilized,
  the contractor also enters into contracts or
  labor agreements with each of the craft unions
  with whom he deals with
• These contracts usually cover a 1 to 2 year
  period and include clauses governing the
  reconciliation of disputes, work rules, wage
  scales and fringe benefits
• Typical contracts also include provisions
  governing
• 1) Maintenance of membership, 2) fringe benefits,
  3) work rules, 4) apprentice program operation,
  5) wages, 6) hours, 7) worker control and union
  representation, 8) operation of the union hiring
  hall, 9) union area, 10) sub clauses (see section
  14-1E), 11) special provisions
• See fig. 14-4 for a summary of labor
  organizations and wage rates

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Figure 14-4 Labor Organizations and Wage Rates
IAF Industry Advancement Fund
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LABOR COSTS

• The large number of contributions and burdens
  associated with the wage of a worker makes the
  determination of a workers cost to the
  contractor a complex circulation
• The contractor must know how much cost to put in
  the bid to cover the salary associated
  contributions for all the workers
• Assuming that the number of carpenters,
  ironworkers, operating engineers and other craft
  workers required is known and the hours for each
  can be estimated, the average hourly cost can be
  multiplied by the required craft hours to arrive
  at the total labor cost
• The average cost of a worker to the contractor
  consists of the following
• 1) Direct wages, 2) fringe benefits, 3) social
  security contributions (FICA), 4) unemployment
  insurance, 5) workmens compensation insurance,
  6) public liability and property damage
  insurance, 7) subsistence pay, and 8) shift pay
  differentials
• The direct wages and fringe benefits can be
  determined by referring to a summary of wage
  rates as the one shown in fig. 14-4
• All workers must pay social security or a portion
  of their salary. For every dollar the worker
  pays, the employer must pay a matching dollar
• FICA contribution in 2004 was on the first
  87,900 of annual income at the rate 7.65, the
  contractor, would contribute a like amount

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LABOR COSTS CONTD.

• Unemployment insurance each state sets a rate
  that must be paid by the employer
• State also require employers to maintain
  workmens compensation insurance for all workers
  they employ. The insurance reimburses the worker
  for injuries occurred in the course of
  employment. A typical listing of construction
  specialties and the rates are given in table 14-5
• Public Liability (PL) If a bag of cement falls
  from an upper story of a project and injuries
  persons on the sidewalk, these persons will
  normally seek a settlement to cover their
  injuries. PL is the responsibility of the owners,
  however, normally pass the requirement to insure
  against such liability to the contractor in the
  form of a clause in the General Conditions of the
  construction contract
• Similarly, if the bag of cement falls and breaks
  the window shield of a car parked near the
  construction site, the owner of the car will seek
  reimbursement. This is a property damage (PD)
  insurance carried by the contractor (for owner)
  covers this kind of liability
• Therefore, to provide PL and PD insurance, the
  contractor must pay 3.00 for PL and 1.88 for
  each one hundred dollars of steel erector salary
  paid on the job
• Subsistence is paid to workers who must work
  outside of the normal area of the local
• Shift differentials are paid to workers in
  recognition that it may be less convenient to
  work during one part of the day than during
  another. Typical provisions in a sheet metal
  workers contract are given in fig. 14-5

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Table 14-5 Building Craft Wage and Insurance Rates
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AVERAGE HOURLY COST CALCULATION

• A typical summary of data regarding trade
  contracts in given areas is presented in table
  14-5
• A worksheet showing the calculation of an iron
  workers hourly cost to a contractor is shown in
  fig. 14-6
• The calculation of the hourly average wage
  indicates the complexity of payroll preparation.
  A contractor may deal with any where from 5 to 14
  different crafts, and each craft union has its
  own wage rate and fringe benefits structure.
  Because of this, most contractors with a work
  force of any size use the computer for payroll
  preparation

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Figure 14-6 Sample Wage Calculations