By Mike Ripley, vice president of health care policy and employment law
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At the Chamber’s request, Sen. Phil Boots (R-Crawfordsville) carried SB 99, which allowed for a wage assignment for the rental of uniforms. The U.S. Southern District Court determined that while the Indiana code permits deductions for the “purchase” of uniforms, the statute does not list clothing “rental” as one of the permissible purposes of a wage deduction. Michael Padgett, attorney with Lewis Jackson, represented the business before the court and testified on behalf of the Chamber in the Senate hearing. Negotiating with the labor unions early on over some protections garnered Senate Democrat votes on the bill.
In the House, testimony was brought forward that some employers had relied upon a memo by the Indiana Department of Labor (DOL) that included the rental of uniforms as a permissible wage assignment. An attempt to make the legislation retroactive in the House was unsuccessful, but the bill passed the House unanimously. Senator Boots waited two weeks before filing a dissent motion and drafted a conference committee report that legalized any deductions for the rental of uniforms or job-related clothing prior to the effective date of the legislation. At first, labor interests were not thrilled but eventually recognized that businesses had relied on the DOL memo.
The Chamber thanks the Indiana Manufacturers Association (IMA) for its persistence and assistance with us on the retroactive portion of the bill. Additionally, the measure added the purchase of tools as a permissible wage assignment, that wage deductions could not exceed an employer’s cost and codified no deductions are permitted on personal protective device equipment per federal rules. The conference committee report unanimously passed both houses.
Late last summer, the Indiana Department of Workforce Development (DWD) discussed with the Chamber a potential increase in unemployment insurance (UI) taxes to build up the trust fund balance, but no proposal details were provided at that time. Representative Dan Leonard (R-Huntington) believed that the balance was sufficient and no further analysis was pursued. During session, DWD was more persuasive and Rep. Leonard began to have a change of heart. DWD calculated that the state’s balance will be around $1 billion by the end of 2020, based upon current forecasts, and will never get much higher than $1.1 or $1.2 billion.
In late March, DWD proposed that all employers remain in Schedule E through 2025 but adjusting their rates within the schedule based upon their experience. The Chamber was on alert when we learned the details, which would have caused employers who had done the best job at working on getting their experience rates lower (i.e., laid off the fewest people) to receive some of the highest percentage UI rate increases! Thankfully, the Chamber’s concerted efforts kept the idea from moving forward.
The UI changes this session were as follows: changes to confidentiality provisions, changes to how notices are sent to claimants and employees, increasing the DWD spending cap from $5 million to $10 million on the Penalty and Interest Fund, changes to the notification of individual overpayment to four years from the discovery of the overpayment instead of four years from the overpayment, plus increases to the time DWD has to commence civil action in cases of overpayment to 10 years.
New Workplace Safety Penalties; Worker’s Comp Increase Thwarted
Representative Carbaugh authored HB 1341 that increased penalties for a workplace accident that caused the death of an employee. This was in response to the 2018 tragic death of a Fort Wayne Plastics employee who was crushed by a press when numerous safety violations occurred. The Chamber worked to get the bill as narrowly defined as possible.
The final version that passed both houses unanimously stated that an employer who knowingly violates any standard, rule or order, where any such violation can reasonably be determined to have contributed to an employee fatality, shall be assessed a civil penalty of not less than $9,472 for each violation and may be assessed a civil penalty of up to $132,598 for each violation. Indiana OSHA reported one workplace fatality in 2017 in which the employer received a knowing citation. In 2018, there were two fatalities with a knowing citation.
On the worker’s comp front, Rep. Matt Lehman’s (R-Berne) HB 1182 clarifies that an employee who leaves work to serve as a volunteer firefighter is considered an employee of the firefighting unit for purposes of worker’s comp while in the performance of his duties. It further increased the burial expenses of a covered employee who dies from an injury by an accident arising out of the employee’s employment from $7,500 to $10,000. (This was also tied to Rep. Carbaugh’s HB 1341 mentioned above.)
Moreover, it was expected that this bill would be the vehicle to increase worker’s comp benefits, but nothing materialized. The 2% increase in worker’s comp in SB 358 never received a hearing in the House. The Chamber opposed this increase without a corresponding employer benefit. The Chamber anticipates summer discussions about a worker’s comp benefit increase tied to putting ambulatory surgical centers under the same 200% of Medicare reimbursement rate as hospitals.
Déjà vu for Asbestos Trust Reform
One of the Chamber’s top priorities in 2019 was to pass meaningful asbestos transparency legislation that would allow a jury to receive certain disclosures regarding asbestos trust claims; this would allow the jury to make more informed decisions in these cases. For the past three years, the Chamber has run into the same brick wall that is the Senate Judiciary Committee, where the bill gets assigned. That committee is stacked to the serious disadvantage of any tort reform. We know that the three Democrats oppose the bill and Republican Sens. Aaron Freeman (Indianapolis) and Eric Koch (Bedford) have previously sided with trial attorneys on the issue. Still, with a new change in Senate leadership and two new Republican members in Sens. Mike Bohacek (Michigan City) and Linda Rogers (Granger), there was hope for greater success this year.
As expected, HB 1181, authored by Rep. Matt Lehman (R-Berne), passed the House 59-39 and then was assigned to the Senate Judiciary Committee chaired by Randy Head (R-Logansport). A large business coalition worked on the bill and sought out committee members again about this issue. Senator Rogers sided with the proponents but Sen. Bohacek told the Chamber that he was opposed to the bill, thus giving opponents a 6-5 tally and as a result Sen. Head chose not to hear the bill. While the issue will be brought back again next year, until the committee makeup is altered, any change in outcome is unlikely.
Resource: Mike Ripley at (317) 264-6883 or email: [email protected]