Biden Orders No Non-union Companies on Federal Government Construction Projects - American Society of Employers - Michael Burns

Biden Orders No Non-union Companies on Federal Government Construction Projects

President Executive OrderLast weekend President Biden announced a new Executive Order barring non-union construction firms and workers from federal construction projects over $35,000,000. This is just the latest pro union move for the self-proclaimed “most pro-union President in U.S. history.”

The Executive Order requires “Project Labor Agreements” be in place for all construction projects at or over $35,000,000. Project labor agreements are when the federal government awards contracts exclusively to unionized firms. How does this work? Contractors, whether unionized or not, must subject their workers as well as the company to unionization. The union contract itself is in the public project’s bid specifications. To get the contract the contractor must sign the agreement subjecting its workers to union control.

This order comes on the heels of the $1 trillion infrastructure bill passed into law to rebuild the roads, ports, and bridges across the country. According to the White House, the project labor agreement could affect $262 billion in federal government contracting and impact nearly 200,000 workers that will be on federal government contracts. 

As an example of what this may mean for construction labor organizations, workers that will now be in a union have to pay between $35 - $45/month toward union dues (this range is a typical construction union membership charge). If there are even 100,000 new workers on these federal projects, that gives the labor organizations between $3.5 and $4.5 million per month income.

The unions are not the only ones that are behind this new executive order. The Association of Union Constructors, representing upwards of 1,800 contractor companies, said this will benefit the country because it gives construction employers access to a “highly skilled pool of craftworkers.”

However, that group of unionized contractors is estimated to only be about 13% of the U.S. construction industry. The other 87% of construction companies are not unionized. But they will be if they hope to get any work coming from the federal infrastructure projects being put out to bid.

A statement from the non-union Associated Builders and Contractors (ABC) stated the Executive Order will only “exacerbate the construction industry’s skilled workforce shortage, needlessly increase construction costs, and reduce opportunities for local contractors and skilled tradespeople.” What the ABC is referencing is that it has been shown that union contracts increase construction costs by 12% - 20%.

The President of ABC said, “imposing project labor agreements also discriminates against more than 85% of construction workers who choose not to belong to a union. Open shop firms that are subject to a project labor agreement are required to pay both their employees benefits and those of the unions involved in the agreement. Since few firms can be competitive while paying two sets of benefits, the order effectively locks out most workers from participating in federal construction projects.”

President Biden reportedly signed the Executive Order during his visit to Ironworkers Local 5 in Upper Marlboro, Maryland. Reuters reports he was joined by Vice President Kamala Harris and Labor Secretary Marty Walsh.


Source: Daily News Digest. Biden Signs Executive Order Barring Non-union Construction Workers from Federal Construction Projects Ove $35 Million (2/4/2022). Law 360 Biden Mandates Labor Deals for Federal Construction (2/4/2022)

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