Local Hiring Requirements or Incentives

Solar panel installation at Bennett High School in Buffalo with workers in the PUSH Hiring Hall program (Credit: PUSH Buffalo)

In addition to providing workforce development and training, state and local policymakers can cultivate partnerships with project developers to create local hiring requirements and incentives for employers and small businesses. These arrangements are often project-specific, and promulgated through project labor or community workforce agreements.

Project labor and community workforce agreements are binding legal documents that lay out the employment terms and conditions of a specific project or projects. Examples of these provisions include “agreements on targeted or local hiring, wages and benefits, health and safety training, and processes for communication and resolving conflicts among stakeholders.”^{See footnote 1} Generally, there are several parties involved in the creation of a project labor or community workforce agreements, which can include labor unions, contractors, developers, project owners, and a local government body, when applicable.^{See footnote 2} 

Essentially, local hiring requirements and/or project labor agreements require that employers on a project set aside several jobs for local and/or disadvantaged members of the community, or that they look to specific workforce agencies that help to staff these individuals for employees.^{See footnote 3} These legally binding partnerships are an innovative way to facilitate a resilient economy in frontline communities by ensuring job opportunities are available to residents that will be directly impacted by the project. 

A successful hiring program centered around clean energy and resilience addresses the roles and responsibilities of contractors and subcontractors; has a centralized coordinator and job center for community members to use and apply to; provides some sort of apprenticeship or training program; and works with the private sector to find and manage projects appropriate for local residents’ skill sets.

Additionally, local governments may also need to establish MWBE contracting and subcontracting ordinances and regulatory schemes to avail themselves of certain grants issued by federal agencies. For example, in the aftermath of Superstorm Sandy, federal funding was allocated for recovery efforts that were distributed by FEMA and HUD. FEMA issued guidance for local governments that included provisions for ‘socioeconomic contracts.’ This language required that state agencies take affirmative steps to assure that small, minority, women-owned businesses participated and submitted in the grant proposal process. Additionally, once funding was awarded, grantees were to take all “necessary affirmative steps to assure that minority firms, women’s business enterprises, and labor surplus area firms [were] used when possible.”^{See footnote 4} Similarly, some HUD statutory disaster recovery provisions require that recipients of specific funding must use best efforts to contract economically disadvantaged business owners residing in the project area to complete said project.^{See footnote 5} Local governments must be in compliance with these provisions to achieve minimum goals for contracting in order to receive federal funds.

The fewer people in a community that are unemployed — and the more that are employed in a resilient, clean energy job — the more likely it is that the community in question will (1) Be able to recover more quickly from a climate event; (2) Be able to withstand some shocks; and (3) Avoid the impacts of a climate event altogether.^{See footnote 6} 

Considerations of Local Hiring Requirements and Incentives Programs for Economic Resilience

Lessons Learned

• Programs that have both training curricula and hiring agreements with local businesses have proven to be very successful. By having both programs, organizations can ensure that training graduates feeding into hiring processes are adequately prepared to enter the clean energy workforce.
• As with workforce development programs, those looking to implement or promulgate hiring requirements should look to both the public and private sectors for incentivization funding. For example, because local hiring helps to advance economic stability within a region, private organizations promulgating these types of programs should work with the local government to see if there is an opportunity to leverage local funding.
• Hiring programs, contracts, and regulations should focus on ensuring that local, frontline community members have opportunities for placement on projects, and that local businesses owned by frontline community members benefit as well. In addition to requiring that contractors hire a specific number or percentage of disadvantaged workers, hiring programs can also require that contractors selected to participate in the program come from frontline or disadvantaged communities.
• Having explicit language within a contract or agreement with a contractor that members of frontline communities must complete a specific portion of labor for a project has helped to ensure that programs hit and often surpass their targets. Provisions included in contracts relating to frontline community members include hours of work completed, percentage of workers involved in the project, businesses reached and participating in the hiring process, and more.
• Public-private partnerships have proven successful when it comes to getting large-scale projects done using a local workforce. In specific instances where a project may be too large or expensive for the local government to undertake alone, policymakers can choose from contractors bidding on the project based on a variety of factors, including commitments to hire from the local frontline community. In exchange for a private organization to take responsibility for carrying out the project, the local government can agree to sign over a portion of the profits the project accumulates.