Item No. 8d_3736_redline

Meeting Date: April 24, 2018

Port of Seattle Commission

Policy Directive on

Priority Hire

As Adopted

November 28, 2017

Document last updated April 3, 2018

Port of Seattle Commission Priority Hire Policy Directive Page 2 of 10

SECTION 1. Purpose. 2

The purpose of this policy directive is to provide good family-wage jobs to qualified 4

construction workers from economically distressed areas of King County by increasing access to 5

Port of Seattle covered projects. This leads to economic growth and job creation in areas of 6

King County that are experiencing economic distress. In addition, it will provide jobs to those 7

historically underrepresented in the construction industry, such as women and people of color. 8

To develop a priority hire program implemented through a project labor agreement (PLA) and 10

to foster closer cooperation with the Regional Public Owners Group to ensure uniform 11

application of priority hire terms and contractor and union compliance with priority hire 12

requirements. This supports the Port of Seattle’s continued efforts on workforce development. 13

SECTION 2. Definitions. 15

When used in this policy directive, the following words and phrases shall have the meanings 17

given below unless the context in which they are included clearly indicates otherwise: 18

“Apprentice” means a person who has signed a written apprenticeship agreement with and 20

enrolled in an active state-registered apprenticeship training program approved by the 21

Washington State Apprenticeship and Training Council. 22

“City” means City of Seattle. 24

"Construction labor costs” means the labor cost component of the estimated construction 26

budget for the project to be paid to contractors at time of the bid, or, if absent a bid, at the 27

time of the contract award. 28

“Contractor” means any person, firm, partnership, owner operator, limited liability company, 30

corporation, joint venture, proprietorship, trust, association, or other legal entity that employs 31

individuals to perform work on covered projects, including general contractors, subcontractors 32

of all tiers, and both union and non-union entities. 33

“Core Employee” means an employee of an open-shop contractor that meets the core 35

employee criteria established under a PLA. 36

“Covered Project” means a Port of Seattle construction project under a PLA with construction 38

labor costs at or above $5 million. 39

“Dispatch” means the process by which a union refers workers for employment to contractors 41

under the authority of a collective bargaining agreement. The process typically mandates the 42

distribution of work via a “first in, first out” priority but can be legally adjusted via special 43

agreements to allow for out-of-order dispatching and priority worker hiring. 44

Port of Seattle Commission Priority Hire Policy Directive Page 3 of 10

“Economically Distressed Area” means a geographic area defined by zip code in King County 46

and found to have high population concentrations: 1) Living at or below 200 percent of the 47

federal poverty level, 2) Unemployed, 3) Those over 25 years of age without a college degree, 48

compared to other zip codes. King County zip codes with a high density per acre of at least two 49

out of the three criteria will be identified as Economically Distressed Areas. These zip codes are 50

updated and published by King County’s Finance and Business Operations Division. 51

“Jobs Coordinator” means either one of the following: a Port of Seattle employee, an employee 53

that is considered a shared resource between government agencies, or a third party entity that 54

facilitates the hiring of priority workers in collaboration with contractors and union dispatch. 55

“Journey-level” means an individual who has sufficient skills and knowledge of an occupation, 57

either through a formal apprentice training program or through practical on-the-job work 58

experience, to be recognized by a state or federal registration agency and/or an industry as 59

being qualified to perform the work of the occupation. Practical experience must be equal to or 60

greater than the term of apprenticeship. 61

“Labor hours” means hours performed on covered projects by workers who are subject to 63

prevailing wages. 64

“Open-shop contractor” means a contractor that is not a signatory to a collective bargaining 66

agreement with a union representing the trade(s) of the contractor’s workers, also known as 67

non-union contractors. 68

“Pre-apprentice” means a student enrolled in a construction pre-apprentice training program 70

recognized by the Washington State Apprenticeship and Training Council. 71

“Priority Hire Program” means a program on Port of Seattle major construction contracts that 73

focuses on recruitment, training and employment of workers who reside in Economically 74

Distressed Areas as defined by King County. 75

“Priority Worker(s)” means an individual prioritized for recruitment, training, and employment 77

opportunities because the individual is a resident in an Economically Distressed Area. 78

“Project Labor Agreement” means an agreement authorized under the National Labor Relations 80

Act (NRLA), 29 U.S.C., which provides a means for aligning interests of public owners such as 81

the Port with those of construction labor unions. 82

“Regional Public Owners Group” means the group including the City of Seattle, King County, 84

Port of Seattle, Sound Transit, the City of Tacoma, and the Washington State Department of 85

Transportation, focused on public agencies working together as regional partners to better 86

understand the workforce demand-supply gap for regional public infrastructure projects; to 87

enhance access opportunities and to increase the diversity of pre-apprentices, apprentices, and 88

journey-level workers entering into the trades workforce; to support retention programs for 89

Port of Seattle Commission Priority Hire Policy Directive Page 4 of 10

current trades workers, especially women and people of color; and to improve performance 90

data and systems of reporting for monitoring regional goals and initiatives. 91

“Union” means a representative labor organization whose members collectively bargain with 93

employers to set the wages and working conditions in their respective trade or covered scope 94

of work. 95

SECTION 3. Scope and Applicability. 97

A. This Policy Directive pertains to covered project(s) for the remainder of this policy 99

directive. 100

101

SECTION 4. Responsibilities. 102

103

A. The Executive Director (1) will assign a designee (referred to as “designee” for the 104

remainder of the policy directive) and subsequent designated office to implement and 105

administer this policy directive, and (2) may, through the designee, develop and adopt rules 106

consistent with the requirements of this policy directive. 107

108

B. The designee, with the Executive Director’s written concurrence and upon notice to 109

the Port of Seattle Commission, may reduce or waive requirements or goals of this policy 110

directive when impractical for a covered project for one or more of the following reasons: when 111

required due to an emergency, when subject to limitations of a sole source, when requirements 112

or goals would be inconsistent with an agreement with a public agency, when requirements or 113

goals are inconsistent with federal funding or other funding sources, when the project is in a 114

remote location, when superseded by safety or other legal requirements, when other 115

conditions arise such as the goals become impractical, or absent an executed PLA. 116

117

C. The designee shall be responsible for identifying, monitoring, and mitigating risks 118

within his/her authority and propose mitigation actions to the Executive Director if additional 119

authority is required. The designee shall enforce the requirements in this policy directive and 120

may use actions as deemed appropriate. 121

122

D. As part of establishing a priority hire advisory committee to operate in an advisory 123

role to the Port of Seattle for implementation and effectiveness of this policy directive, the 124

designee shall participate in the previously established Regional Public Owners Group and may, 125

under an agreement with one or more other government entities with priority hire programs, 126

establish and participate in a regional priority hire advisory committee. 127

128

SECTION 5. Policy. 129

130

A. For covered projects that are not found impractical under Section 4(B), the designee 131

shall establish in the bid or other solicitation documents the following: (1) the required 132

percentage of labor hours to be performed by priority workers, and (2) the aspirational goal 133

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percentage of labor hours to be performed by priority workers. Contractors and dispatch under 134

a PLA shall seek to first hire and dispatch priority workers so as to meet or exceed the required 135

and aspirational goal percentages. The designee shall establish the percentages separately for 136

apprentices and for journey-level workers. 137

138

B. For each covered project, the designee shall establish the greatest practicable 139

required percentage of labor hours to be performed by priority workers by considering 140

anticipated workforce availability and past utilization percentages on similar construction 141

projects from the most recent project previous calendar year, and shall establish the 142

percentage for the upcoming year. This shall be included in the PLA and other Port agreements 143

as appropriate and progress monitored by the designee. The designee shall adjust these 144

required percentages annually, based on performance and reasonably anticipated changes in 145

worker availability. 146

147

C. In order to achieve the intended impact in economically distressed areas, the 148

designee shall set project-specific requirements and an aspirational goal percentage of no less 149

than 20 percent for all labor hours performed annually by priority workers on the total of 150

covered projects for the year. Annual percentage rates will be measured January 1 – December 151

31 of each applicable year. 152

153

D. In order to meet the percentage of labor hours to be performed by priority workers, 154

the designee shall require contractors and dispatch under a PLA to seek to employ a priority 155

worker who is a resident of an economically distressed area in King County, and then workers 156

from any other economically distressed areas as needed to meet the percentage labor hours to 157

be performed by priority workers. The specific process by which contractors, dispatch, and the 158

Port of Seattle Jobs Coordinator(s) will collaborate in order to facilitate the hiring of priority 159

workers shall be established by the designee. 160

161

E. For covered projects, the designee shall ensure the availability of a Jobs 162

Coordinator(s) to perform the following functions: maintain a database of pre-qualified priority 163

workers for referral to work on a covered project; network with various work source centers, 164

community, non-profit, and faith-based organizations to facilitate the identification of priority 165

workers; and facilitate referral and coordination around training and employment of priority 166

workers between contractors, unions, and training programs. In addition, the designee shall 167

explore development of a third party to manage regional priority hire efforts. 168

169

F. Per the Construction Labor Practices Policy Directive for Projects Located on Port of 170

Seattle Property (adopted by Resolution 3725), contracts $1 million in value or greater require 171

apprenticeship utilization goals. The goal is no less than 15 percent of all contract labor hours 172

are to be performed by apprentices. 173

174

(1) For individual projects, the designee will determine the apprenticeship utilization 175

goal and may consider such factors as project size, project duration, labor hours 176

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anticipated for the project, skills required, the likely crafts required for the 177

project, historic utilization rates, and apprentice availability. 178

179

(2) The designee shall establish aspirational percentage goals for apprentices who 180

are women and people of color using similar factors. Contractors may be allowed 181

to offer utilization below the aspirational percentage goals by substituting other 182

efforts to meet the intent of building a trained construction workforce for a 183

portion of the utilization percentages for women and people of color. 184

185

G. When determining whether the percentage of priority hire requirements has been 186

achieved, the designee shall exclude from the calculation labor hours performed by residents of 187

states other than the state of Washington. The designee shall track labor hours performed by 188

residents of states other than the state of Washington and shall review this percentage 189

annually with the previously established Regional Public Owners Group and any future regional 190

priority hire advisory committee that may be established under an agreement with one or more 191

other government entities with priority hire programs. 192

193

H. Per the Construction Labor Practices Policy Directive for Projects Located on Port of 194

Seattle Property (adopted by Resolution 3725), the designee shall support the inclusion of 195

priority hire provisions in the PLA standard language to be approved by the Commission 196

Projects and Procurement Committee. In furthering the Construction Labor Practices Policy 197

Directive for Projects Located on Port of Seattle Property, Port staff will seek an agreement with 198

regional partners to develop a framework to achieve operational efficiencies through uniform 199

priority hire requirements and by sharing priority hire resources and data and advancing 200

workforce development efforts. 201

202

I. The Port shall review and recommend how the intent of priority hire can be 203

implemented throughout the Port beyond the covered projects, including future leases, 204

concession agreements, and procurement contracts by September 1, 2018. 205

206

SECTION 6. Program Evaluation. 207

208

A. The designee shall establish benchmarks and metrics to evaluate the program, such 209

as project costs, completion times, workplace safety, utilization rates and graduation rates of 210

priority workers, women and people of color from pre-apprentice and apprentice training 211

programs, and changes in the amount of contracting dollars paid to small business and Women 212

and Minority Business Enterprises (WMBE) firms working on covered projects and the number 213

of small business and WMBE firms under contract. 214

215

B. Port efforts in pursuit of the objectives of this policy directive will be incorporated 216

into the Port’s long range plan (LRP) to the fullest extent reasonable, including incorporation 217

into the LRP scorecards, reports, and LRP updates. Further, the designee shall prepare and 218

publish an annual report each year titled Apprenticeship and Priority Hire Annual Report. 219

220

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The report shall include, but not be limited to, the following: 221

222

(1) The number and kinds of construction projects and contracts on which 223

apprenticeship and priority hire requirements were established; 224

(2) The percentage of labor hours actually worked by apprentices and priority 225

workers on each such project and the total number of labor hours on each 226

project; 227

228

(3) The number of apprentices and priority workers by contractor broken down by 229

trade and craft category, the wages paid by category of work or trade, the 230

number and percentage of women and people of color utilized as apprentices 231

and priority workers, and the degree of compliance with the percentage 232

requirements and aspirational goals to be established under this policy directive; 233

234

(4) The number of apprentices and priority workers per Port dollar spent on the 235

program; 236

237

(5) A description of problems encountered in the implementation of the program; 238

239

(6) A description of barriers encountered by participating apprentices and priority 240

workers and steps taken to resolve those problems and to ensure their 241

continued participation in the program; 242

243

C. The Port of Seattle Commission, Executive Director, and designee will review 244

program results annually as part of the LRP update to determine if the program should be 245

expanded or amended by increasing or decreasing requirements and aspirational goals. 246

247

SECTION 7. Fiscal Implications. 248

249

This policy directive has fiscal implications as funding and staffing requirements will be needed 250

to implement the priority hire program. Fiscal implications will be reviewed by the designee 251

annually, at a minimum, to determine if additional funding and/or resources are required and 252

shall submit a budget request, as appropriate. 253

254

SECTION 8. Research Findings 255

256

Based on studies commissioned by the City of Seattle and King County and their 257

implementation of priority hire programs and numerous public discussions, the Port of Seattle 258

Commission finds that it is in the Port’s and the public’s best interest to increase the supply of 259

qualified construction workers, particularly those historically underrepresented in the 260

construction industry, including those who live in economically distressed areas in King County 261

and also within that group, women and people of color. 262

263

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A. In January 2015, following the positive results of a pilot program on the Elliott Bay 264

Seawall project, the City of Seattle adopted Ordinance No. 124690, an ordinance relating to 265

establishing a priority hire policy to ensure better access to training programs and well-paying 266

construction jobs for local workers, as well as to increase the diversity of the workforce on city 267

projects. 268

269

B. The City of Seattle implemented the priority hire ordinance through a community 270

workforce agreement (CWA) between the city and the building trade labor unions, and that 271

agreement requires that prime contractors on city public works construction projects of 272

$5 million or more, must ensure that a certain percent of project labor hours are performed by 273

workers living in economically distressed areas of Seattle and King County. 274

275

C. In May 2016, the King County Executive directed county agencies to implement a 276

priority hire pilot program that prioritized economically disadvantaged local workers for 277

inclusion on large King County capital construction projects. King County is considering a 278

permanent priority hire program implemented through a CWA. 279

280

D. Based on studies commissioned by the City of Seattle and King County and their 281

implementation of priority hire programs, and numerous public discussions, the Port of Seattle 282

Commission finds that it is in the Port’s and the public’s best interest to increase the supply of 283

qualified construction workers, particularly those historically underrepresented in the 284

construction industry, including women, racial minorities, and those who live in economically 285

distressed areas of Seattle and King County. 286

287

E. King County completed a study in January 2016 documenting a widening gap 288

between the demand for construction labor and the supply of skilled trade workers in the 289

regional labor market for King County and other public entities. The gap reinforces the urgent 290

need for developing a strategy to address the current and projected workforce shortages. The 291

study also used economic data involving poverty levels, employment, and educational 292

attainment to determine economically distressed areas, which are identified by zip code. 293

294

F. King County completed the Construction Workforce Analysis in December 2016 and 295

found that the county may reasonably anticipate a reduced surplus of qualified labor and 296

possible labor shortages in certain construction trades by 2020. That is the result of a projected 297

shortfall forecast between demand and supply of 4,630 workers by 2020. The county is 298

concerned that these labor shortages will increase reliance on out-of-state construction 299

workers and that the demand for new construction workers may increase construction costs on 300

the county’s public works projects unless the county supports efforts to increase the supply of 301

trained apprentices and journey level workers for local public works projects. 302

303

The analysis also found that 81 percent of the construction workforce in King County in 2016 304

were white males, while 19 percent were people of color and women. Representation of 305

women and people of color is higher among new entrants to the labor force through 306

apprenticeships and accredited certificates of completion, such as those received for 307

Port of Seattle Commission Priority Hire Policy Directive Page 9 of 10

completing a pre-apprenticeship program. However, according to the analysis, women and 308

people of color also have lower rates of apprenticeship completion than do their white male 309

counterparts. 310

311

G. The City of Seattle commissioned the Construction Industry Labor Market 312

Assessment, which found that women, irrespective of race, are underrepresented in the 313

construction industry. Between 2009 and 2013, 10 percent fewer women finished their 314

apprentice training program than males. The assessment also found that between 2009 and 315

2013, 14 percent fewer racial minority apprentices finished their apprentice training program 316

than white apprentices. In addition, it also found that underrepresented workers face barriers 317

to completing apprentice training. Between 2009 and 2013, 65 percent of the racial minorities 318

exiting apprenticeships did not complete the programs compared to 51 percent of the white 319

apprentices who failed to complete the program. During that same time period, 65 percent of 320

all women, irrespective of race, failed to complete their programs compared to 55 percent of all 321

men. 322

323

H. The City of Seattle has found that priority hire effectively and successfully increases 324

diversity on city construction projects. The share of labor hours between November 2013 and 325

April 2017 saw an increase of 233 percent in rate of hours performed by workers living in 326

Seattle’s economically distressed zones. In addition, it saw an over 300-percent increase in rate 327

of hours performed by apprentice women and 200-percent increase in rate of hours performed 328

by African-Americans. 329

330

I. A PLA is an effective tool to manage public works projects when reducing the risk of 331

project delays and reducing the potential of labor disruptions and labor shortages. 332

333

J. Priority hire is an effective tool to create local jobs, enhance workforce diversity, and 334

improve overall working conditions. 335

336

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Revision History 337

338

November 28, 2017 Resolution 3736, establishing the Priority Hire Policy Directive, was 339

adopted. 340

341