Session Review: Business and Labor

Issues relating to workers’ compensation, employee classification and unemployment benefit funds topped business and labor concerns this session.

LB780, introduced by Omaha Sen. Steve Lathrop, changes the Nebraska Workers’ Compensation Act by making mental injuries unaccompanied by a physical injury eligible for compensation for first responders in limited circumstances. The bill excludes recovery for mental injuries resulting from normal employer and employee relations, including personnel and disciplinary actions.

Under the bill, a first responder is defined as a sheriff, deputy sheriff, police or state patrol officer, volunteer or paid firefighter or a licensed volunteer or licensed paid individual who provides immediate medical care in order to prevent loss of life or aggravation of physiological or psychological illness or injury.

LB780 passed on a 40-5 vote and will be in effect until June 30, 2014.

Senators also passed a bill that addresses the misclassification of employees as independent contractors.

LB563, introduced by Lathrop, defines an independent contractor as one who is registered under the Contractor Registration Act and is assigned a combined tax rate or is exempt from unemployment insurance coverage. A violation will result in employers being fined $500 per misclassified employee for the first offense and $5,000 per misclassified employee for subsequent offenses.

Under the bill, public construction contractors are required to submit an affidavit attesting that each employee has completed an I-9 form and is properly classified and that the contractor has complied with E-verify, the federal program that verifies the legal resident status of newly hired employees.

The bill requires the state Department of Labor to establish and operate a hotline and Web site to accept reports of suspected violations.

LB563 passed on a 43-1 vote.

LB1020, also sponsored by Lathrop, was originally introduced to make a technical change to Employment Security Law. As amended, the bill provides a way for the state to accept $43.6 million in American Recovery and Reinvestment Act (ARRA) funds by increasing certain unemployment benefits and tightening other qualifications to offset the cost of providing those benefits.

Beginning July 1, 2011, individuals who are determined ineligible for unemployment benefits based upon wages earned during the first four of the five most recent calendar quarters will be entitled to a redetermination. The redetermination will be based on the last four completed calendar quarters immediately preceding the first day of the claimant’s benefit year.

In addition, an individual who otherwise is eligible for unemployment will not be deemed ineligible solely for seeking part-time work if the majority of the weeks of work in his or her base period include part-time work.

An individual who has exhausted all regular unemployment benefits will continue to be eligible for up to 26 additional weeks if, among other provisions, such an individual:

• was voluntarily separated from employment as a result of a permanent reduction of the employer’s operation;
• is enrolled and making satisfactory progress in an approved training program that is preparing the individual for entry into a high-demand occupation; and
• is not receiving a similar stipend or other training allowances for non-training costs.

Among other provisions, the bill also extends disqualification periods:

• from 12 to 14 weeks for a misconduct discharge;
• from 12 to 13 weeks for voluntarily leaving employment without good cause; and
• from 1 to 2 weeks for voluntarily leaving employment to accept other employment.

LB1020 passed on a 49-0 vote.

A bill that would have required state agencies to consider the economic impact of proposed regulations on small businesses failed to advance from general file.

LB709, introduced by Omaha Sen. Tom White, would have required state agencies to solicit public comment from small businesses that may be adversely affected by a proposed regulation and consider their input before adopting any changes. The bill would have required agencies to notify a particular business if the agency has knowledge that the business may be affected by a proposed change and to consider ways to reduce the economic impact of new regulations on small businesses.

Some senators raised concerns about increased administrative costs and adding to the workload of state regulatory agencies after recently cutting agency budgets.

LB709 failed to advance from general file on a 22-17 vote.

A bill requiring employment of Nebraskans for public works projects during periods of excessive unemployment also failed to advance from general file.

Lincoln Sen. Danielle Conrad said she introduced LB925 because of the recent economic downturn, citing increases in unemployment and public benefit expenditures.

Opponents said the bill would negatively effect reciprocal agreements among states. The bill failed to advance 13-26.