Deadline Set for Administration’s Decision in Federal Overtime Lawsuit

A Federal Court of Appeals grants the Trump Administration until June 30th to determine whether to continue defending a lawsuit that challenges an Obama-era regulatory expansion.

A federal court of appeals has granted the U.S. Department of Labor (DOL) its third extension in defending a lawsuit challenging new Fair Labor Standards Act (FLSA) overtime regulations according to the HR Daily Advisor.

tipton
Commissioner Tipton of Mineral County, Nevada testifies in Congress on the new Department of Labor overtime rule.

The National Association of Counties has advocated against the new regulations, with county officials testifying that the costly changes could negatively affect the ability of county governments to provide key services.

As reported by the HR Daily Advisor,

A lower court temporarily enjoined the rule last year and the Obama administration appealed that order. Now, the Trump administration must decide whether to continue with that defense.

Citing lack of leadership—specifically, a secretary of labor—the DOL has now requested and received three delays, giving it until June 30 to make a decision.

 

As described by HR Daily Advisor,

The rule, which was scheduled to take effect December 1, 2016, would have required employers to pay overtime to employees earning less than $913 per week (which amounts to $47,476 annually). The change would have more than doubled the existing threshold.

States and business groups challenged the rule in court and a federal district court judge granted a preliminary injunction, temporarily halting the rules just days before their effective date.

For more information, see 3rd Delay: Trump’s DOL to Address Overtime Rule by June 30 from the HR Daily Advisor.

 

For prior coverage, see these posts on Conduit Street:

Anne Arundel School Board, Unions, Agree to Increase in Drug Copays

As part of an effort to curb health care cost for the Anne Arundel County Public School System, three of the schools’ unions agreed to increases in copays for some prescriptions drugs to save the school system about $400,000. The three-year agreement starts in 2018.

As reported by The Capital Gazette,

The school system’s health care fund has faced about a $20 million deficit in the past two years. Medical costs rose and the school system has been expanding its staff. Earlier this year, the school system transferred $2 million from a surplus fund to pay for health care. County Executive Steve Schuh also transferred $5 million from the county budget to help pay for health care for school employees and avoid drastic actions, such as furloughs and layoffs.

Schuh and school officials have said they need to shift some costs of the health insurance to employees to make the fund sustainable.

The agreement between the school board, Teachers Association of Anne Arundel County, the Association of Educational Leaders, and the American Federation of State, County, and Municipal Employees increases copays for preferred prescription drugs to $20 and non-preferred brand prescriptions to $35. Those unions represent teachers, administrators and maintenance workers respectively. Generic drugs will continue to cost $5.

School staff that belong to those three unions now have copays of $15 for preferred brands and $25 for non-preferred brand.

Under the plan, a new tier called specialty prescriptions, which are defined as injectables with the exception of insulin, would have a copay of $50 in 2018, $65 in 2019 and $75 in 2020.

The agreement also allows specialty prescriptions to be redefined after Jan. 1, 2019.

School officials’ effort to curb costs include an agreement with CareFirst that saves the school system $16.9 million over a three-year period, starting in 2018.

County officials are also asking the State Board of Education to allow the county government to make a one-time allocation of $22.5 million for school health care costs for the fiscal year beginning July 1. This would exempt the school system from the state law that requires the level of per-pupil funding in one year to be matched in all subsequent years.

The state agency is expected to respond by the end of the month.

Read the full article for more information.

2017 Aspire Awards from NACo & Nationwide – Submissions Due May 26

The National Association of Counties (NACo) and Nationwide Retirement Solutions are excited to launch the 2017 Aspire Awards which honors and recognizes counties for innovative solutions and promoting employee retirement savings. Submissions are due May 26, 2017.

Are you aware that over 350,000 county employees from more than 3,000 county agencies are saving for retirement with the NACo Deferred Compensation program? That’s 350,000 citizens who were given the opportunity to take an active role in planning for their future – 350,000 community members who, in the face of numerous and competing financial demands, took that opportunity, and decided to utilize a trusted program to save. In a day and age when individuals and organizations alike are pushed to do more with less, NACo is eager to recognize the monumental contribution from NACo’s county plan sponsors in marketing this cornerstone program successfully and helping that number of participants reach new heights.

Please review the guidelines here for further information. Please address questions to Carlos Greene at NACo at cgreene@naco.org or 404-263-3656.

2017 End of Session Wrap-Up: Employee Benefits & Relations

The segments below provide a brief overview of MACo’s employee benefits advocacy in the 2017 General Assembly. 

Follow links for more coverage on Conduit Street and MACo’s Legislative Database

Teacher Pension Costs

Push Icons-WONMACo supported successful passage of a bill that addresses the shortfall in funding required to meet the portion of Maryland state teacher pension costs that exceed costs anticipated during the 2012 “pension shift.” MACo joined the Maryland Association of Boards of Education in supporting the State one-time appropriation of $19.7 million to close the gap. House Bill 1109/Senate Bill 1001 was signed into law by the Governor. Bill InformationMACo Coverage

Residency Requirements for County Employees

Push Icons-WONMACo successfully supported passage of a bill to provide local governments with greater autonomy and flexibility in implementing local policies designed to serve and react to community needs. House Bill 167 has been passed by both chambers and awaits the Governor’s signature. Bill InformationMACo Coverage

Collective Bargaining Mandates


MACo helped stop two collective bargaining mandates that would have increased costs and administration for county governments
.

Push Icons-DEFEATEDHouse Bill 1370 mandated a prescriptive, one-size-fits-all design that would expand collective bargaining rights in a third of Maryland’s counties. “Employment Rights for Local Government Employees” did not advance out of committee. Bill Information | MACo Coverage

 

Push Icons-DEFEATEDSenate Bill 652/House Bill 871 would have mandated certain collective bargaining structures at county-funded community colleges.  Neither bill advanced out of its assigned committees in either chamber. Bill Information | MACo Coverage

 

Sick Leave

MACo opposed three bills that would have created new requirements for county government sick leave policies.

Push Icons-NOT IDEALSenate Bill 230/House Bill 1 The “Maryland Healthy Working Families Act” passed the General Assembly and is awaiting the Governor’s signature. Bill InformationMACo Coverage

 

 

Push Icons-DEFEATEDSenate Bill 305/House Bill 382 “Commonsense Paid Leave Act,” which was part of the Governor’s legislative package, did not advance out of committee in either chamber. Bill InformationMACo Coverage

 

Push Icons-DEFEATEDHouse Bill 854, a bill targeting at county governments and the benefits they provide to grant-funded employees, received an unfavorable report from the House Economic Matters Committee. Bill InformationMACo Coverage 

Minimum Wage

Push Icons-DEFEATEDMACo opposed a bill called the “Fight for Fifteen,” which would have raised the statewide minimum wage to $15 by 2023. Counties had concerns that this increase would place a significant fiscal burden on county governments. Senate Bill 962/House Bill 1416 did not advance out of committee in either chamber.  Bill InformationMACo Coverage.

Click here for a round up of the wrap-ups for all policy areas

Maryland General Assembly Gives Final OK to Democrats’ Sick Leave Bill

The General Assembly gave final approval to a bill that would extend paid sick leave to almost 700,000 Maryland workers, setting up a potential clash with Gov. Larry Hogan, who has threatened to veto the measure.

The House of Delegates approved the Senate version of the Democratic legislation by a veto-proof margin, sending it to the Republican governor.

According to The Baltimore Sun,

A Hogan veto would set up an override vote as one of the first items of business when the legislature reconvenes in an election year next January. Hogan promised last month to veto the bill, which he derided as “a partisan attempt to put points on the board to use against me in a campaign in 2018.”

Asked about the bill at an event in Baltimore Wednesday afternoon, Hogan was more equivocal.

“We’re dealing with the 27 bills they sent us,” he said. “They’re going to send us another thousand. We’ll have until May to talk about all those.”

The legislation, five years in the making, would require businesses with 15 or more full-time employees to let their workers earn at least five days of sick time a year.

Hogan had proposed a rival bill that would have applied to businesses that employ 50 or more workers in a single location. Democrats rejected that approach, saying businesses that large typically already provide employees with paid sick leave.

The governor’s bill would have offered tax credits for smaller businesses to offer such a benefit. Democrats said Hogan never explained how he would pay for the $60 million annual cost of the credit.

Republicans warned that the bill sponsored by Democrats would hurt small businesses and cause them to close their doors or move out of state.

The House voted 87-53 to approve the legislation. GOP delegates voted as a bloc against the bill. Three Democrats joined them. Another was absent Wednesday. It takes 85 votes in the House to override a veto.

The Senate passed the bill Monday, after amending it to reduce some burdens on businesses.

Where the House had proposed seven days of leave, the Senate changed that to five. The Senate also changed the average number of hours an employee needs to work per week to qualify from eight to 12, and extended the minimum number of days on the payroll to qualify from 90 to 106, a concession to employers who hire workers for seasonal jobs, such as those in Ocean City in the summer.

Similar legislation passed the House last year but got hung up in the Senate Finance Committee.

That panel’s chairman, Sen. Thomas M. “Mac” Middleton, convened a work group including businesses and advocates last summer. The group helped hammer out a more acceptable version of the bill.

With the Democrats’ proposal gaining momentum, Hogan weighed in late last year with what he billed as a “common sense” alternative. The measure won praise from Republican lawmakers, but business groups did not line up to support it.

Read the full article for more information.

City Council Won’t Attempt Override of Pugh’s $15 Minimum Wage Veto

The effort to raise Baltimore’s minimum wage to $15 an hour is dead — at least for now.

Two weeks after the City Council backed the wage hike by a veto-proof majority, the bill’s lead sponsor said Monday she had failed to collect enough signatures to even attempt an override of Mayor Catherine Pugh’s veto.

According to The Baltimore Sun,

“It has been laid to rest,” City Councilwoman Mary Pat Clarke said of the legislation, after acknowledging just six of her colleagues had joined her in trying to force a vote to override the veto. She needed 10 council votes to force an override attempt.

But Clarke said she wasn’t done fighting for a $15 minimum wage. She suggested she would try to launch a petition drive to place the matter before voters in the 2018 election.

“The fight for $15 goes on,” Clarke said.

Due to a little-known provision in city law and scheduling issues, council members needed to hold a special meeting within the next two weeks to attempt to override Pugh’s veto. But while 12 of the council’s 15 members supported the $15 minimum-wage legislation — the exact number needed to override a mayoral veto — just seven signed Clarke’s letter calling for a special meeting to do so.

Council members Zeke Cohen, Ryan Dorsey, Bill Henry, John Bullock, Kristerfer Burnett and Shannon Sneed signed Clarke’s letter calling for a vote on the veto override. Five of the seven are freshmen on the council.

After Pugh said she was vetoing the bill, City Councilman Edward Reisinger announced he was withdrawing his support of it. And City Council President Bernard C. “Jack” Young and Councilman Robert Stokes said they would not sign Clarke’s letter forcing an override vote.

When running for mayor, Pugh told labor unions she would sign the $15 minimum-wage bill if it reached her desk. Pugh said she changed her position, in part, because of the budget problems she encountered after taking office in December, including a $130 million schools budget deficit she is trying to help close. The mayor allocated $22 million in her first budget proposal to help that effort.

The Pugh administration estimated the minimum-wage bill would cost the city $116 million over four years, including the expense of paying city workers a higher minimum wage. Some businesses said they would offset higher costs by raising prices, laying off workers, putting expansion plans on hold or looking for sites outside the city.

The vetoed bill, which would have raised the minimum wage to $15 per hour by 2022, exempted workers younger than 21 and gave businesses with fewer than 50 employees until 2026 to comply.

Even with the veto, Baltimore’s minimum wage is increasing along with the rate statewide under legislation Pugh supported while in the state Senate. The rate in Maryland will rise to $9.25 on July 1 and to $10.10 a year later.

Pugh said advocates should focus on raising the wage at the state level. She said an economic imbalance between the wages of Baltimore and its surrounding counties could cause jobs to leave and unemployment to rise.

“We are on target to continue to raise the minimum wage,” Pugh said, noting the minimum wage will rise for the next two years. “The fight for $15 goes out to 2026. … We will be pushing just as hard as we can as at the state level. We may be past $15 by 2026.”

Useful Links

The Baltimore Sun Article

Previous Conduit Street Coverage: Pugh Vetoes $15 Minimum Wage Bill

Schuh Transfers $5M to Keep Health Care Fund Afloat

Anne Arundel County Executive Steve Schuh announced Thursday a plan to transfer $5 million to Anne Arundel County Public Schools’ health care fund, to save the school system from resorting to more drastic measures like furloughs and layoffs to pay its medical bills.

According to The Capital Gazette,

The school system ran out of money in its health care fund in February and transferred $2 million from a surplus fund to pay for health care. The system will rely on the $5 million from Schuh as well as about $1.3 million from other parts of the school budget to pay its bills until the end of June.

“We committed last June to doing what we could to assist the school system if needed, and this is the next piece in a multistep plan to ensure we can fix the school health care funding crisis once and for all,” said Schuh in a statement.

The health care fund has faced deficits in the past two years, with expenses exceeding revenue by about $20 million each year.

Health care expenses have risen with medical costs. And as school officials hire more staff to teach a growing student population, they put more people on their insurance.

To fix the funding problem, the school board is renegotiating its health care insurance plans with unions to shift more costs to employees.

The county board is also asking the State Board of Education to allow the county government to make a one-time allocation of $22.5 million for school health care costs for the fiscal year beginning July 1. This would exempt the system from the state law that requires the level of per-pupil funding in one year to be matched in all subsequent years.

Last year, the state board allowed Schuh to put $10 million into the health care fund without counting it toward that recurring cost requirement. But it also asked county and school officials to come up with a plan to curb long-term costs.

County and school officials say the $22.5 million allocation, renegotiated health care plans and increased school health care funding will bring revenue in line with expenses in the next two years.

“This is not a place in which any of us wanted to find ourselves, but it is unfortunately the place where we are,” schools Superintendent George Arlotto said in a statement.

“We have scrimped and saved money throughout the year to try to be able to keep our health care fund solvent through June. Despite those efforts, it now appears we will not be able to do so. We appreciate the county executive fulfilling his promise to work with us and bridge the gap if necessary.”

The school system signed a contract with the health insurance provider CareFirst earlier this year that is expected to save $16.9 million from 2018 to 2020.

Bill Jones, the director of the Teachers Association of Anne Arundel County, said the deficit resulted not just from increased expenses but also from insufficient funding and decisions by county officials to take money from the health care reserve fund to pay for other things.

The teachers union is expected to vote on its proposal to increase co-pays April 5.

The County Council will introduce a resolution Monday to support the school system and Schuh’s request to the state Board of Education.

Councilman Chris Trumbauer, D-Annapolis, said fixing the schools’ health care fund is the most important item in the budget. The problem is a “shared responsibility” for all the county’s leadership, he said.

Read the full article for more information.

Pugh Vetoes $15 Minimum Wage Bill

Mayor Catherine Pugh vetoed legislation Friday that would have raised the minimum wage in Baltimore to $15 by 2022, leaving the measure’s future in question.

The Baltimore City Council — which next meets on April 3 — would need 12 of its 15 members to vote to overturn the veto. On Friday, the 12-member coalition that originally backed the higher wage began to disband.

From The Baltimore Sun,

Councilman Edward Reisinger of South Baltimore said although he voted to pass the bill, he would not support a veto override. Over the next seven years, the Pugh administration estimated the bill would cost the city $116 million, including the expense of paying city workers a higher minimum wage.

Reisinger said the cost is especially concerning given the city’s outstanding fiscal challenges: a $20 million deficit, a $130 million schools budget shortfall and new spending obligations associated with the U.S. Department of Justice’s police consent decree.

“The mayor has some very persuasive arguments,” Reisinger said. “Baltimore City doesn’t have a money tree.”

Pugh also was concerned that requiring employers in the city to pay a higher minimum wage could send them fleeing to surrounding jurisdictions. That would worsen unemployment in the city and make it harder for low-skilled workers and ex-offenders to get jobs, she said.

She emphasized that Baltimore’s minimum wage is increasing along side the rate statewide. The rate in Maryland will rise to $9.25 on July 1 and $10.10 a year later.

“I believe it is in the best interest of the city that we follow the state,” Pugh said.

The City Council voted 11-3 to pass the minimum wage bill Monday. Councilman Brandon Scott also supported the measure but didn’t cast a vote because he was traveling overseas.

The pro-business Greater Baltimore Committee’s president, Don Fry, praised Pugh’s decision. The measure “threatened jobs, made Baltimore an island surrounded by counties with lower business costs and hit the city budget with millions of dollars in higher labor costs it simply cannot afford.”

“The decision was no doubt a difficult one for the mayor,” Fry said in a statement. “But this shows real leadership as she stayed true to the priority that Baltimore must remain competitive for growth and jobs.”

Advocates pushing for the higher wage decried Pugh’s action as a broken promise.

“We are deeply upset that Mayor Pugh has broken her campaign pledge by vetoing this legislation, which promises to give tens of thousands of workers higher wages and the opportunity to lead self-sufficient lives,” said Ricarra Jones, chairwoman of the Fight for $15 Baltimore Coalition, in a statement.

“As a state senator, Mayor Pugh was a strong supporter of a livable minimum wage and explicitly promised to sign the Baltimore wage bill as mayor. Today, she has made clear that promises are made to be broken. The voters will remember her turn-around.”

Jones noted that during last year’s campaign, Pugh said she would support a $15 minimum wage bill as mayor on a union questionnaire.

“Yes, I would. I am aware of the current initiative to raise the minimum wage in the City Council to $15 per hour and when it reaches my desk I will sign it,” Pugh wrote.

Asked Friday about her response to the questionnaire, Pugh said she has been faced with significant unanticipated expenses since taking office in December, including the schools budget deficit.

“I don’t think they make you swear on the Bible,” Pugh said. “They ask you if you would support it, and I do support it. But you ask me as a chief executive officer of this city what I would do as it relates to the conditions of the city currently, and where we are economically, I have a right and responsibility to respond on behalf of all of the citizens of this city.”

Pugh noted that legislation to increase the minimum wage statewide is before the General Assembly.

“While it may not take place this year or next year, I will follow the lead of the state,” she said.

Read the full article for more information.

Register to Attend CEIWC’s 2017 Free Workers’ Comp Seminars

Register to attend one of Chesapeake Employers’ Insurance Company’s Workers’ Compensation Seminars. Specialists in safety services, premium audit, claims management along with legal professionals will provide a valuable half-day best practices overview.

Upcoming Seminar Dates:

  • Thursday, April 20 at the Pikesville Double Tree Hotel: Register here
  • Thursday, May 4 at the Easton Tidewater Inn: Register here
  • Thursday, October 5 at the Bowie Comfort Inn Hotel: Register here
  • Thursday, October 12 at the Frederick Holiday Inn and Conference Center: Register here

Registration will begin at 8:30 am and the seminar will go from 9:00 am until 1 pm. Admission is free but online reservations are required. Executive continental breakfast and refreshments will be provided.

Watch the YouTube video below to see why you should attend a policyholders seminar.

Key Presenters:

  • Elizabeth Torphy-Donzella, Esq., Shawe Rosenthal, LLP
  • Dr. Stephen Fisher, Director of Medical Services, Chesapeake Employers

Topics of the seminars’ informative presentations:

  • Employment Law – Best Practices to Avoid Wage and Hour Claims
  • Top 3 Most Common and Costly Injuries and Steps to Prevent Them
  • Understanding the Premium Audit Process
  • Chesapeake Employers’ Claims & Medical Health Services Team Approach for Better Claims Outcomes & an Improved E-Mod.
  • Chesapeake Employers’ Legal Defense Services Overview
  • Mock Workers’ Compensation Hearing with a Maryland Workers’ Comp. Commissioner

For more information please contact Carolyn Gutermuth at 410-494-2170. CEIWC is a MACo Gold Corporate Partner.

Community College Collective Bargaining Bill Remains in Committee

Neither the Senate Finance Committee nor the House Appropriations Committee has taken action on a prescriptive, one-size-fits-all collective bargaining bill that would affect all Maryland community colleges. HB 871 / SB 652 failed to move prior to yesterday’s “crossover” deadline, and bills passed out from now on go to the Rules Committee of the second chamber, a procedural hurdle impeding their chances of final passage.

Counties oppose the one-size-fits-all approach of HB 871 / SB 652, which limits local decision-making. The move to collective bargaining outlined in this bill could create potentially unsustainable costs for counties, who provide substantial funding for community colleges throughout Maryland – especially since the legislation does not envision any added State support.

From the MACo testimony,

Despite counties’ role in supporting community colleges, this legislation would not provide any opportunity for county governments to participate in collective bargaining negotiations. The combination of these effects – State-imposed system and costs, no county participation in bargaining, and no additional State funding – is simply not affordable as a statewide county mandate and could present substantial budget difficulties.

MACo opposed identical legislation in past sessions of the General Assembly. Click here for previous Conduit Street coverage.

For more on MACo’s advocacy efforts during the 2017 legislative session, visit our Legislative Tracking Database.