8a Priority Hire redline
Item No. 8a, Attachment B Meeting Date: April 10, 2018 Port of Seattle Commission Policy Directive on Priority Hire As Adopted November 28, 2017 Document last updated April 3, 2018 1 2 SECTION 1. Purpose. 3 4 The purpose of this policy directive is to provide good family-wage jobs to qualified 5 construction workers from economically distressed areas of King County by increasing access to 6 Port of Seattle covered projects. This leads to economic growth and job creation in areas of 7 King County that are experiencing economic distress. In addition, it will provide jobs to those 8 historically underrepresented in the construction industry, such as women and people of color. 9 10 To develop a priority hire program implemented through a project labor agreement (PLA) and 11 to foster closer cooperation with the Regional Public Owners Group to ensure uniform 12 application of priority hire terms and contractor and union compliance with priority hire 13 requirements. This supports the Port of Seattle's continued efforts on workforce development. 14 15 SECTION 2. Definitions. 16 17 When used in this policy directive, the following words and phrases shall have the meanings 18 given below unless the context in which they are included clearly indicates otherwise: 19 20 "Apprentice" means a person who has signed a written apprenticeship agreement with and 21 enrolled in an active state-registered apprenticeship training program approved by the 22 Washington State Apprenticeship and Training Council. 23 24 "City" means City of Seattle. 25 26 "Construction labor costs" means the labor cost component of the estimated construction 27 budget for the project to be paid to contractors at time of the bid, or, if absent a bid, at the 28 time of the contract award. 29 30 "Contractor" means any person, firm, partnership, owner operator, limited liability company, 31 corporation, joint venture, proprietorship, trust, association, or other legal entity that employs 32 individuals to perform work on covered projects, including general contractors, subcontractors 33 of all tiers, and both union and non-union entities. 34 35 "Core Employee" means an employee of an open-shop contractor that meets the core 36 employee criteria established under a PLA. 37 38 "Covered Project" means a Port of Seattle construction project under a PLA with construction 39 labor costs at or above $5 million. 40 41 "Dispatch" means the process by which a union refers workers for employment to contractors 42 under the authority of a collective bargaining agreement. The process typically mandates the 43 distribution of work via a "first in, first out" priority but can be legally adjusted via special 44 agreements to allow for out-of-order dispatching and priority worker hiring. 45 Port of Seattle Commission Priority Hire Policy Directive Page 2 of 10 46 "Economically Distressed Area" means a geographic area defined by zip code in King County 47 and found to have high population concentrations: 1) Living at or below 200 percent of the 48 federal poverty level, 2) Unemployed, 3) Those over 25 years of age without a college degree, 49 compared to other zip codes. King County zip codes with a high density per acre of at least two 50 out of the three criteria will be identified as Economically Distressed Areas. These zip codes are 51 updated and published by King County's Finance and Business Operations Division. 52 53 "Jobs Coordinator" means either one of the following: a Port of Seattle employee, an employee 54 that is considered a shared resource between government agencies, or a third party entity that 55 facilitates the hiring of priority workers in collaboration with contractors and union dispatch. 56 57 "Journey-level" means an individual who has sufficient skills and knowledge of an occupation, 58 either through a formal apprentice training program or through practical on-the-job work 59 experience, to be recognized by a state or federal registration agency and/or an industry as 60 being qualified to perform the work of the occupation. Practical experience must be equal to or 61 greater than the term of apprenticeship. 62 63 "Labor hours" means hours performed on covered projects by workers who are subject to 64 prevailing wages. 65 66 "Open-shop contractor" means a contractor that is not a signatory to a collective bargaining 67 agreement with a union representing the trade(s) of the contractor's workers, also known as 68 non-union contractors. 69 70 "Pre-apprentice" means a student enrolled in a construction pre-apprentice training program 71 recognized by the Washington State Apprenticeship and Training Council. 72 73 "Priority Hire Program" means a program on Port of Seattle major construction contracts that 74 focuses on recruitment, training and employment of workers who reside in Economically 75 Distressed Areas as defined by King County. 76 77 "Priority Worker(s)" means an individual prioritized for recruitment, training, and employment 78 opportunities because the individual is a resident in an Economically Distressed Area. 79 80 "Project Labor Agreement" means an agreement authorized under the National Labor Relations 81 Act (NRLA), 29 U.S.C., which provides a means for aligning interests of public owners such as 82 the Port with those of construction labor unions. 83 84 "Regional Public Owners Group" means the group including the City of Seattle, King County, 85 Port of Seattle, Sound Transit, the City of Tacoma, and the Washington State Department of 86 Transportation, focused on public agencies working together as regional partners to better 87 understand the workforce demand-supply gap for regional public infrastructure projects; to 88 enhance access opportunities and to increase the diversity of pre-apprentices, apprentices, and 89 journey-level workers entering into the trades workforce; to support retention programs for Port of Seattle Commission Priority Hire Policy Directive Page 3 of 10 90 current trades workers, especially women and people of color; and to improve performance 91 data and systems of reporting for monitoring regional goals and initiatives. 92 93 "Union" means a representative labor organization whose members collectively bargain with 94 employers to set the wages and working conditions in their respective trade or covered scope 95 of work. 96 97 SECTION 3. Scope and Applicability. 98 99 A. This Policy Directive pertains to covered project(s) for the remainder of this policy 100 directive. 101 102 SECTION 4. Responsibilities. 103 104 A. The Executive Director (1) will assign a designee (referred to as "designee" for the 105 remainder of the policy directive) and subsequent designated office to implement and 106 administer this policy directive, and (2) may, through the designee, develop and adopt rules 107 consistent with the requirements of this policy directive. 108 109 B. The designee, with the Executive Director's written concurrence and upon notice to 110 the Port of Seattle Commission, may reduce or waive requirements or goals of this policy 111 directive when impractical for a covered project for one or more of the following reasons: when 112 required due to an emergency, when subject to limitations of a sole source, when requirements 113 or goals would be inconsistent with an agreement with a public agency, when requirements or 114 goals are inconsistent with federal funding or other funding sources, when the project is in a 115 remote location, when superseded by safety or other legal requirements, when other 116 conditions arise such as the goals become impractical, or absent an executed PLA. 117 118 C. The designee shall be responsible for identifying, monitoring, and mitigating risks 119 within his/her authority and propose mitigation actions to the Executive Director if additional 120 authority is required. The designee shall enforce the requirements in this policy directive and 121 may use actions as deemed appropriate. 122 123 D. As part of establishing a priority hire advisory committee to operate in an advisory 124 role to the Port of Seattle for implementation and effectiveness of this policy directive, the 125 designee shall participate in the previously established Regional Public Owners Group and may, 126 under an agreement with one or more other government entities with priority hire programs, 127 establish and participate in a regional priority hire advisory committee. 128 129 SECTION 5. Policy. 130 131 A. For covered projects that are not found impractical under Section 4(B), the designee 132 shall establish in the bid or other solicitation documents the following: (1) the required 133 percentage of labor hours to be performed by priority workers, and (2) the aspirational goal Port of Seattle Commission Priority Hire Policy Directive Page 4 of 10 134 percentage of labor hours to be performed by priority workers. Contractors and dispatch under 135 a PLA shall seek to first hire and dispatch priority workers so as to meet or exceed the required 136 and aspirational goal percentages. The designee shall establish the percentages separately for 137 apprentices and for journey-level workers. 138 139 B. For each covered project, the designee shall establish the greatest practicable 140 required percentage of labor hours to be performed by priority workers by considering 141 anticipated workforce availability and past utilization percentages on similar construction 142 projects from the most recent project previous calendar year, and shall establish the 143 percentage for the upcoming year. This shall be included in the PLA and other Port agreements 144 as appropriate and progress monitored by the designee. The designee shall adjust these 145 required percentages annually, based on performance and reasonably anticipated changes in 146 worker availability. 147 148 C. In order to achieve the intended impact in economically distressed areas, the 149 designee shall set project-specific requirements and an aspirational goal percentage of no less 150 than 20 percent for all labor hours performed annually by priority workers on the total of 151 covered projects for the year. Annual percentage rates will be measured January 1 December 152 31 of each applicable year. 153 154 D. In order to meet the percentage of labor hours to be performed by priority workers, 155 the designee shall require contractors and dispatch under a PLA to seek to employ a priority 156 worker who is a resident of an economically distressed area in King County, and then workers 157 from any other economically distressed areas as needed to meet the percentage labor hours to 158 be performed by priority workers. The specific process by which contractors, dispatch, and the 159 Port of Seattle Jobs Coordinator(s) will collaborate in order to facilitate the hiring of priority 160 workers shall be established by the designee. 161 162 E. For covered projects, the designee shall ensure the availability of a Jobs 163 Coordinator(s) to perform the following functions: maintain a database of pre-qualified priority 164 workers for referral to work on a covered project; network with various work source centers, 165 community, non-profit, and faith-based organizations to facilitate the identification of priority 166 workers; and facilitate referral and coordination around training and employment of priority 167 workers between contractors, unions, and training programs. In addition, the designee shall 168 explore development of a third party to manage regional priority hire efforts. 169 170 F. Per the Construction Labor Practices Policy Directive for Projects Located on Port of 171 Seattle Property (adopted by Resolution 3725), contracts $1 million in value or greater require 172 apprenticeship utilization goals. The goal is no less than 15 percent of all contract labor hours 173 are to be performed by apprentices. 174 175 (1) For individual projects, the designee will determine the apprenticeship utilization 176 goal and may consider such factors as project size, project duration, labor hours Port of Seattle Commission Priority Hire Policy Directive Page 5 of 10 177 anticipated for the project, skills required, the likely crafts required for the 178 project, historic utilization rates, and apprentice availability. 179 180 (2) The designee shall establish aspirational percentage goals for apprentices who 181 are women and people of color using similar factors. Contractors may be allowed 182 to offer utilization below the aspirational percentage goals by substituting other 183 efforts to meet the intent of building a trained construction workforce for a 184 portion of the utilization percentages for women and people of color. 185 186 G. When determining whether the percentage of priority hire requirements has been 187 achieved, the designee shall exclude from the calculation labor hours performed by residents of 188 states other than the state of Washington. The designee shall track labor hours performed by 189 residents of states other than the state of Washington and shall review this percentage 190 annually with the previously established Regional Public Owners Group and any future regional 191 priority hire advisory committee that may be established under an agreement with one or more 192 other government entities with priority hire programs. 193 194 H. Per the Construction Labor Practices Policy Directive for Projects Located on Port of 195 Seattle Property (adopted by Resolution 3725), the designee shall support the inclusion of 196 priority hire provisions in the PLA standard language to be approved by the Commission 197 Projects and Procurement Committee. In furthering the Construction Labor Practices Policy 198 Directive for Projects Located on Port of Seattle Property, Port staff will seek an agreement with 199 regional partners to develop a framework to achieve operational efficiencies through uniform 200 priority hire requirements and by sharing priority hire resources and data and advancing 201 workforce development efforts. 202 203 I. The Port shall review and recommend how the intent of priority hire can be 204 implemented throughout the Port beyond the covered projects, including future leases, 205 concession agreements, and procurement contracts by September 1, 2018. 206 207 SECTION 6. Program Evaluation. 208 209 A. The designee shall establish benchmarks and metrics to evaluate the program, such 210 as project costs, completion times, workplace safety, utilization rates and graduation rates of 211 priority workers, women and people of color from pre-apprentice and apprentice training 212 programs, and changes in the amount of contracting dollars paid to small business and Women 213 and Minority Business Enterprises (WMBE) firms working on covered projects and the number 214 of small business and WMBE firms under contract. 215 216 B. Port efforts in pursuit of the objectives of this policy directive will be incorporated 217 into the Port's long range plan (LRP) to the fullest extent reasonable, including incorporation 218 into the LRP scorecards, reports, and LRP updates. Further, the designee shall prepare and 219 publish an annual report each year titled Apprenticeship and Priority Hire Annual Report. 220 Port of Seattle Commission Priority Hire Policy Directive Page 6 of 10 221 The report shall include, but not be limited to, the following: 222 223 (1) The number and kinds of construction projects and contracts on which 224 apprenticeship and priority hire requirements were established; 225 (2) The percentage of labor hours actually worked by apprentices and priority 226 workers on each such project and the total number of labor hours on each 227 project; 228 229 (3) The number of apprentices and priority workers by contractor broken down by 230 trade and craft category, the wages paid by category of work or trade, the 231 number and percentage of women and people of color utilized as apprentices 232 and priority workers, and the degree of compliance with the percentage 233 requirements and aspirational goals to be established under this policy directive; 234 235 (4) The number of apprentices and priority workers per Port dollar spent on the 236 program; 237 238 (5) A description of problems encountered in the implementation of the program; 239 240 (6) A description of barriers encountered by participating apprentices and priority 241 workers and steps taken to resolve those problems and to ensure their 242 continued participation in the program; 243 244 C. The Port of Seattle Commission, Executive Director, and designee will review 245 program results annually as part of the LRP update to determine if the program should be 246 expanded or amended by increasing or decreasing requirements and aspirational goals. 247 248 SECTION 7. Fiscal Implications. 249 250 This policy directive has fiscal implications as funding and staffing requirements will be needed 251 to implement the priority hire program. Fiscal implications will be reviewed by the designee 252 annually, at a minimum, to determine if additional funding and/or resources are required and 253 shall submit a budget request, as appropriate. 254 255 SECTION 8. Research Findings 256 257 Based on studies commissioned by the City of Seattle and King County and their 258 implementation of priority hire programs and numerous public discussions, the Port of Seattle 259 Commission finds that it is in the Port's and the public's best interest to increase the supply of 260 qualified construction workers, particularly those historically underrepresented in the 261 construction industry, including those who live in economically distressed areas in King County 262 and also within that group, women and people of color. 263 Port of Seattle Commission Priority Hire Policy Directive Page 7 of 10 264 A. In January 2015, following the positive results of a pilot program on the Elliott Bay 265 Seawall project, the City of Seattle adopted Ordinance No. 124690, an ordinance relating to 266 establishing a priority hire policy to ensure better access to training programs and well-paying 267 construction jobs for local workers, as well as to increase the diversity of the workforce on city 268 projects. 269 270 B. The City of Seattle implemented the priority hire ordinance through a community 271 workforce agreement (CWA) between the city and the building trade labor unions, and that 272 agreement requires that prime contractors on city public works construction projects of 273 $5 million or more, must ensure that a certain percent of project labor hours are performed by 274 workers living in economically distressed areas of Seattle and King County. 275 276 C. In May 2016, the King County Executive directed county agencies to implement a 277 priority hire pilot program that prioritized economically disadvantaged local workers for 278 inclusion on large King County capital construction projects. King County is considering a 279 permanent priority hire program implemented through a CWA. 280 281 D. Based on studies commissioned by the City of Seattle and King County and their 282 implementation of priority hire programs, and numerous public discussions, the Port of Seattle 283 Commission finds that it is in the Port's and the public's best interest to increase the supply of 284 qualified construction workers, particularly those historically underrepresented in the 285 construction industry, including women, racial minorities, and those who live in economically 286 distressed areas of Seattle and King County. 287 288 E. King County completed a study in January 2016 documenting a widening gap 289 between the demand for construction labor and the supply of skilled trade workers in the 290 regional labor market for King County and other public entities. The gap reinforces the urgent 291 need for developing a strategy to address the current and projected workforce shortages. The 292 study also used economic data involving poverty levels, employment, and educational 293 attainment to determine economically distressed areas, which are identified by zip code. 294 295 F. King County completed the Construction Workforce Analysis in December 2016 and 296 found that the county may reasonably anticipate a reduced surplus of qualified labor and 297 possible labor shortages in certain construction trades by 2020. That is the result of a projected 298 shortfall forecast between demand and supply of 4,630 workers by 2020. The county is 299 concerned that these labor shortages will increase reliance on out-of-state construction 300 workers and that the demand for new construction workers may increase construction costs on 301 the county's public works projects unless the county supports efforts to increase the supply of 302 trained apprentices and journey level workers for local public works projects. 303 304 The analysis also found that 81 percent of the construction workforce in King County in 2016 305 were white males, while 19 percent were people of color and women. Representation of 306 women and people of color is higher among new entrants to the labor force through 307 apprenticeships and accredited certificates of completion, such as those received for Port of Seattle Commission Priority Hire Policy Directive Page 8 of 10 308 completing a pre-apprenticeship program. However, according to the analysis, women and 309 people of color also have lower rates of apprenticeship completion than do their white male 310 counterparts. 311 312 G. The City of Seattle commissioned the Construction Industry Labor Market 313 Assessment, which found that women, irrespective of race, are underrepresented in the 314 construction industry. Between 2009 and 2013, 10 percent fewer women finished their 315 apprentice training program than males. The assessment also found that between 2009 and 316 2013, 14 percent fewer racial minority apprentices finished their apprentice training program 317 than white apprentices. In addition, it also found that underrepresented workers face barriers 318 to completing apprentice training. Between 2009 and 2013, 65 percent of the racial minorities 319 exiting apprenticeships did not complete the programs compared to 51 percent of the white 320 apprentices who failed to complete the program. During that same time period, 65 percent of 321 all women, irrespective of race, failed to complete their programs compared to 55 percent of all 322 men. 323 324 H. The City of Seattle has found that priority hire effectively and successfully increases 325 diversity on city construction projects. The share of labor hours between November 2013 and 326 April 2017 saw an increase of 233 percent in rate of hours performed by workers living in 327 Seattle's economically distressed zones. In addition, it saw an over 300-percent increase in rate 328 of hours performed by apprentice women and 200-percent increase in rate of hours performed 329 by African-Americans. 330 331 I. A PLA is an effective tool to manage public works projects when reducing the risk of 332 project delays and reducing the potential of labor disruptions and labor shortages. 333 334 J. Priority hire is an effective tool to create local jobs, enhance workforce diversity, and 335 improve overall working conditions. 336 Port of Seattle Commission Priority Hire Policy Directive Page 9 of 10 337 Revision History 338 339 November 28, 2017 Resolution 3736, establishing the Priority Hire Policy Directive, was 340 adopted. 341 Port of Seattle Commission Priority Hire Policy Directive Page 10 of 10
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