From The Kentucky Center for Economic Progress: 2017 Session a Step Backward for Kentucky Workers

By ANNA BAUMANN

The 2017 General Assembly has ended, but the full impact on workers of several harmful bills passed during the session will play out for years to come.

In the very first week of session in January, the legislature passed “Right to Work” (RTW, HB 1), making Kentucky the 28th state with such a law. The evidence does not support backers’ claims that RTW leads to job growth. Instead, what RTW does is lower wages for all workers in states – by an estimated $1,558 a year in 2015 dollars – and undermine workplace safety. It does so by removing the requirement that workers in unionized firms who aren’t members help defray the cost of the union’s mandatory representation and bargaining by paying reduced “core financial” dues. Without this requirement, some workers pay nothing and unions have fewer resources to represent the same number of workers.

Wages will also be reduced by the repeal of Kentucky’s prevailing wage law (HB 3) that first week of session. Prevailing wages support a skilled construction workforce and good-quality jobs by requiring that workers are compensated according to local industry standards. The argument for repeal – that the state can get public construction jobs done for less – is not backed by the evidence; according to research, better paid, better trained workers offset higher wages with other efficiencies including greater productivity. The real consequences of Kentucky’s prevailing wage repeal will include cutting construction worker income, training and benefits; losing jobs to lower paid workers from outside Kentucky and hurting the local economies where construction worker income circulates.

Another hit on wages comes from SB 6, which compromises public sector employees’ collective bargaining by getting rid of unions’ ability to automatically deduct dues from worker paychecks. Instead of being able to opt out of paying dues, workers will need to authorize deductions to opt in, creating an administrative barrier intended to reduce union resources.

A controversial bill referred to as the golf cart bill, HB 404, was also passed. It will permit commercial delivery companies like UPS to use utility vehicles for deliveries on public roads, subject to local government regulation. Advocates promoted the bill as a way to support efficient delivery, especially during peak season around the holidays. But savings for delivery companies will come at the cost of workers, whose safety will be compromised including as a result of hazardous seasonal weather, and for whom the associated jobs will likely be part-time, low-wage and lacking benefits.

At the same time the General Assembly worsened wages and conditions for workers in the 2017 session, the legislature made it easier for employers to avoid liability when workers’ rights are violated. SB 151, known as the franchisor bill, attempts to remove the possibility that large corporations that franchise would ever be held accountable when a franchisee in Kentucky is in violation of wage and hour, civil rights, workers compensation, unemployment insurance and health and safety laws. Though franchisors are rarely found to be “joint employers” in such cases, federal labor law allows for the possibility. More than 10 states have attempted to supersede this authority by passing similar, industry-backed legislation since a 2015 court case and a 2016 Department of Labor issuance reasserted the NLRB’s ability to find joint employment when the facts of a case support it. Besides having questionable legal standing, these franchisor bills send a dangerous message to franchisors that they can pressure franchisees to cut corners in order to increase profitability without facing the repercussions of potentially illegal cost-cutting measures.

Things could have been even worse in the 2017 session. An extremely draconian reduction in worker protections – SB 237 – was never posted to committee. HB 369, which would have let certain successor corporations off the hook for liability related to asbestos claims, was posted for passage in the House but never taken up for a vote. HB 296, which would have limited medical benefits for workers injured on the job to the advantage of employers and the profitable worker’s compensation insurance industry, died in committee.

But things could have been a lot better for workers, too. A number of bills that would have improved wages and working conditions for Kentuckians never saw the light of day.

  • ­­­­HB 456 would have adjusted the overtime threshold to protect more workers from unpaid work, recognizing that four decades of erosion in the threshold means that a person making poverty wages can be classified as exempt from overtime pay.
  • SB 33HB 178 and HB 420 proposed to increase Kentucky’s regular and tipped minimum wages, adjusting for decades of erosion and the failure of worker wages to keep up with worker productivity; and HB 201 would have given localities the authority to set their own minimum wages.
  • HB 179 would have required equal pay for equal work, regardless of sex, race and national origin.
  • HB 303 would have improved economic security for families across the Commonwealth by providing the option of six weeks paid maternity leave to workers who have been employed for at least a year by an employer with at least 50 employees. Similarly, HB 260 and SB 172 would have extended provisions for “reasonable accommodations” to pregnant women and new moms – like extra bathroom breaks and the ability to carry a water bottle to the assembly line. Such accommodations would help moms who want and need to work stay employed and healthy.
  • HB 196 proposed to crack down on the practice of worker misclassification. In order to avoid responsibility for unemployment insurance and workers’ compensation, employers may classify workers as independent contractors instead of employees. This bill would have made it harder to misclassify workers in Kentucky’s construction industry.
  • HB 240 would have required that public construction jobs over $1 million go to contractors participating in apprenticeship (training) programs.

A strong economy is driven by jobs that pay workers family-supporting wages. Similarly, robust labor force participation depends in part on the availability of decent jobs. Instead of strengthening our laws to support job quality, this year’s General Assembly was a serious setback for Kentucky workers.