LEGISLATIVE UPDATE

2009 regular legislative session begins: economic issues at forefront

The 2009 regular session of the Louisiana Legislature convened April 27. It should come as no surprise that session activity will be driven by economic issues in all areas, and labor is no exception. Many of the 29 labor and employment bills relate to unemployment taxes and benefits and tax credits for employers. More bills are sure to come, and as always, we'll keep you posted on key developments during the session that may affect you.

Tax relief for employers

House Bill (HB) 10, proposed by Representative Gary Smith (D), would provide an additional tax incentive to employers already receiving tax credits, rebates, or incentives for creating jobs in Louisiana. The new incentive would be one-half of one percent of the amount of the existing credit, rebate, or incentive when you give preference and priority to "Louisiana labor and materials manufactured in Louisiana."

Status: HB 10 was filed and referred to the House Ways and Means Committee on February 9.

Two bills seek to provide tax credits to employers that pay their employees' health insurance premiums. Senate Bill (SB) 269, proposed by Senator JackDonahue(R), would provide a tax credit for employers paying health insurance premiums for their employees. The credit would apply against Louisiana income tax and the corporate franchise tax when you directly pay health insurance premiums for the benefit of your employees. The credit would be six percent of the total amount of health insurance premiums paid. Payments for spousal and dependent health insurance premiums wouldn't count toward the credit.

As drafted, the bill doesn't provide a cap on the credit and doesn't appear to require you to pay 100 percent of employees' premiums or to pay premiums for all or part of your workers. The proposed law authorizes the Department of Revenue to adopt rules to carry out its provisions, which could address the specifics of how the credit would work. Many of you already pay at least some portion of your employees' health insurance premiums, so this law could provide some economic relief based on benefits you already provide. If passed, the law would become effective for taxable periods beginning on or after January 1, 2010.

HB 100, introduced by Representative Franklin Foil (R),is similar to SB 269 but specifies that the expenses must be incurred for "Louisiana residents" who have lived in Louisiana for at least half of the applicable taxable year. It also would limit the credit to employers that maintain their principal place of business in Louisiana. However, HB 100 proposes a larger credit for employers (15% of the total premiums paid for employees who are Louisiana residents). The bill would apply to taxable periods beginning January 1, 2010, and would give the Department of Revenue the authority to promulgate rules and regulations necessary to carry out its purpose.

Status: SB 269 and HB 100 were both filed and referred to the House Ways and Means Committee on March 26.

Unemployment contributions and benefits

House Concurrent Resolution 9, proposed by Representative Cedric Richmond (D), would express the Louisiana Legislature's desire to accept funding allocated for unemployment compensation through the American Recovery and Reinvestment Act of 2009 (ARRA). The resolution notes that a change in unemployment law would be necessary to accept funding, but if adopted, it would convey the legislature's commitment to making that change.

Status: The proposed resolution was filed on April 27.

HB 304, introduced by Representative Neil Abramson (D),would provide a credit against individual and corporate income taxes for increases in the cost of unemployment insurance contributions attributable to the expansion of unemployment benefits under the ARRA. The credit would be allowed for employers that, in the applicable taxable year, made unemployment insurance contributions for the company or its employees, provided the cost was greater than that paid in the previous tax year for the same individuals.

The amount of the credit would be the difference between contributions paid in the previous tax year and the applicable taxable year. The total credit, however, could not exceed the tax liability for the applicable taxable year. The bill also would ensure that your experience rating record isn't affected by increased contributions paid as a result of the ARRA.

Status: HB 304 was filed and referred to the House Labor and Industrial Relations Committee on April 17.

SB 311, introduced by Senator Lydia Jackson (D), would expand unemployment coverage to qualify for funding from the ARRA. The proposed law would amend the current unemployment compensation law to provide a special extended benefit program for individuals who have exhausted all rights to regular unemployment compensation under Louisiana law. To be eligible, participants would have to be enrolled and making satisfactory progress in a state-approved training program or a job training program authorized under the Workforce Investment Act of 1998 and not receiving similar stipends or other training allowances for nontraining costs.

Individuals considered to have exhausted all such rights are generally those who have received all of the regular benefits available, have no wages or insufficient wages to establish a new benefit year within the meaning of current law, and have no right to unemployment under federal laws (e.g., the Railroad Unemployment Insurance Act). The proposed law would prohibit the denial of unemployment benefits to individuals based on their unavailability for work or failure to apply for work while enrolled in an approved training program. Persons failing to make satisfactory progress in an approved training program would be ineligible for extended benefits.

The bill prohibits extended benefits from being charged to the experience rating record for "base period" employers. Under current law, the "base period" on which an employee's benefits eligibility is determined is defined as the first four of the last five completed calendar quarters immediately preceding the first day of the employee's benefit year. If passed, the bill would allow for the use of an alternate base period, defined as the last four completed calendar quarters immediately preceding the benefit year. The maximum amount of extended benefits per individual would be 26 times his weekly benefit amount.

Status: SB 311 was filed and referred to the Senate Labor and Industrial Relations Committee on April 17.

HB 610, proposed by Representative Richmond, would expand unemployment compensation benefits to individuals who leave employment for "compelling family reasons." Those reasons include (1) domestic abuse, as defined and verified under current law, that causes the individual to reasonably believe continued employment will jeopardize her safety, the safety of immediate family members, or the safety of other employees, (2) the illness or disability of a member of the individual's immediate family, and (3) the relocation of a spouse that makes the individual's commute impractical.

For the purpose of the proposed law, "disability" would mean a verified mental or physical disability (temporary or permanent, partial or total) that necessitates the care of the family member for a period of time longer than the employer is willing to grant leave. The bill also would redefine the base period as the last four completed calendar quarters immediately preceding the first day of an individual's benefit year.

Status: HB 610 was filed on April 16 and referred to the House Labor and Industrial Relations Committee on April 17.

HB 615, introduced by Representative Sam Jones (D), would allow individuals seeking or accepting part-time work, rather than full-time work, to receive unemployment benefits. To be eligible, the unemployment claim must be based on the loss of part-time work, and the individual must be willing to accept new work under the same conditions as his previous job.

Similar to SB 311, this bill would extend benefits up to 26 additional weeks to individuals enrolled and making satisfactory progress in state-approved training after exhausting all regular benefits. Individuals receiving allowances or stipends under federal or state law for the training would not be eligible. Additionally, the bill would redefine the base period as the last four completed calendar quarters immediately preceding the first day of an individual's benefit year.

Status: HB 615 was filed on April 16 and referred to the House Labor and Industrial Relations Committee on April 17.

HB 799, proposed byRepresentative Michael Jackson (D), would penalize employers for failing to file payroll reports or make contributions for unemployment purposes within 20 days after they are due by law. The penalties would be five percent of the total amount due if the delinquency is 30 days or less, with an additional five percent for each additional 30-day period (in part or in full), not to exceed 25 percent of the amount due. The penalties also would apply to delinquent filings.

If you timely file a report or contributions but remit less than the full amount due, the same five percent penalty would apply for each 30-day period (in part or in full) during which the insufficient filing occurs. The penalty for insufficient filing would be calculated only on the additional amount due after deducting payments already filed.

Status: HB 799 was filed and referred to the House Labor and Industrial Relations Committee on April 17.

Equal pay for women

HB 705, proposed by Representative Barbara Norton (D), would create a new law known as the Louisiana Equal Pay for Women Act. The Act would establish the state's public policy that payment of lower wages to members of one sex for comparable work and jobs adversely affects worker morale and the general welfare of the state's citizens. The new law would make it unlawful for any employer with four or more employees to discriminate against a worker based on sex by paying wages at a rate of less than half that paid to other employees of the opposite sex for the same or substantially similar work on jobs requiring equal skill, effort, education, and responsibility.

Pay differentials based on a seniority system, merit system, system that measures earnings by quantity or quality of production, or bona fide job-related factors other than sex that further legitimize business purposes would be allowed under the new law. The bill prohibits retaliation against individuals who have (1) filed a charge or initiated a proceeding based on an alleged violation of the law, (2) given or are about to give information in connection with an inquiry or proceeding based on an alleged violation of the law, or (3) testified or are about to testify in connection with any inquiry or proceeding relating to rights provided by the law.

Employees would be required to provide you with written notice of the alleged violation. After receiving notification, you would have 90 days to remedy the violation before the employee could initiate a proceeding against you. Violations would subject an employer to damages in the amount of any unpaid wages and an additional amount (one-half the unpaid wages) as liquidated damages, plus reasonable attorneys' fees and costs. Employees would be able to recover monetary relief for violations occurring within the 36 months preceding written notice of the violation. Employment, reinstatement, promotion, and lost benefits may also be awarded.

Employees who pursue frivolous claims may be liable for reasonable damages, attorneys' fees, and costs. Claims would have to be filed within one year of the date the violation, although the one-year limitation would be suspended during the 90-day notice period. The proposed law also requires you to maintain records of employees' names, addresses, occupations, and wages for a period of three years.

Status: HB 705 was filed and referred to the House Labor and Industrial Relations Committee on April 17.

SB 286, introduced by Senator Yvonne Dorsey (D), is nearly identical to HB 705, with one exception: SB 286 wouldn't suspend the one-year filing deadline during the 90-day notice period.

Status: SB 286 was filed and referred to the Senate Labor and Industrial Relations Committee on April 17.

Bottom line

We will continue to keep you posted with any new developments that occur as the regular session of the 2009 Louisiana Legislature continues.

Copyright 2009 M. Lee Smith Publishers LLC

LOUISIANA EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Louisiana employment law. Questions about individual problems should be addressed to the employment law attorney of your choice. The State Bar of Louisiana does not designate attorneys as board certified in labor law.