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CHAPTER 14 CONSTRUCTION LABOR

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Title: CHAPTER 14 CONSTRUCTION LABOR


1
CHAPTER 14CONSTRUCTION LABOR
2
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

3
Biometric Identification Devices
4
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

5
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

6
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

7
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

8
Table 14-1 Chronology of Labor Law and
Organization
9
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

10
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

11
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

12
Table 14-2 Employer Unfair Labor Practices
13
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

14
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

15
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

16
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

17
Table 14-3 Union Unfair Labor Practices
18
Figure 14-1 Contract Typical Member Clause
19
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

20
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

21
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

22
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

23
Fig. 14-2 Structure typical of an affiliate of
the building and construction Trade Department,
AFL-CIO
24
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

25
Table 14-4 AFL-CIO Construction Unions
26
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

27
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

28
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

29
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

30
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

31
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

32
Fig. 14-3 Types of boycotts (a) primary boycotts
and (b) secondary boycotts
33
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

34
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

35
Figure 14-4 Labor Organizations and Wage Rates
IAF Industry Advancement Fund
36
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

37
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

38
Table 14-5 Building Craft Wage and Insurance Rates
39
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

40
Figure 14-6 Sample Wage Calculations
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