State Unemployment Compensation Reform

State Unemployment Compensation Reform

For more than a decade, many states have been faced with exceptionally high unemployment debt owed to the federal government. Until that debt has been repaid, employers must pay higher unemployment compensation costs and federal taxes that escalate each year.

As experts in national unemployment compensation laws, we conduct comprehensive reviews of these laws. Our goal is to create a unique set of recommendations for reforming the law and returning the states’ unemployment insurance trust fund to a position of strength and solvency.

Many of the largest and most influential national business trade associations recognize our clients – and the publications we produce for them – as national experts in unemployment and workers’ compensation issues.

Our Services

We offer monthly tracking and reporting on legislation introduced in all 50 states related to topics ranging from unemployment and workers’ compensation to employment laws and insurance. In addition, we conduct a comprehensive review of state unemployment insurance laws. The goal is to create a unique set of recommendations related to state UI trust fund solvency and debt repayment, re-employment and workforce training initiatives, UI system integrity, affordability of UI benefits, and employer taxes, as well as for general administrative best practices.

Our Clients

Our clients, typically national trade associations and chambers of commerce based in Washington D.C. and across the country, utilize our services for unemployment and workers’ compensation and general human resources issues. Our client roster includes statewide business trade associations and coalitions, working with business coalitions, legislative leaders and statewide elected officials to make recommended reforms to state unemployment compensation systems.

Publications + Presentations

Article

FTC Non-Compete Ban Struck Down, At Least for Now

Presentation

Who's Got the Remote?

Kegler Brown 2022 Managing Labor + Employee Seminar
Presentation

When the DOL Comes Knocking: How to Prepare for and Respond to a Wage + Hour Investigation

Kegler Brown 2022 Managing Labor + Employee Seminar
Article

NEW DOL Vaccine Requirements- What We Know Right Now

Video Clip

Testimony Regarding UI Modernization in Ohio

On March 11, 2021, Tony testified in front of the Ohio Unemployment Compensation Modernization and Improvement Council on behalf of the Ohio Chamber of Commerce and the National Federation of Independent Business (NFIB). Tony provided commentary from a national perspective and to make recommendations for consideration when addressing UI modernization in Ohio.

Ohio Unemployment Compensation Modernization and Improvement Council
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Why Ohio Employers Will Embrace the New “Employment Law Uniformity Act”

Smart Summary Ohio’s landmark HB 352 is set to recalibrate a number of court decisions that were deemed favorable to employee claimants and will align state laws with federal counterparts.Key provisions include updates to supervisor/manager liability, age discrimination claims, statutes of limitation, non-economic and punitive damage limits, dual actions, and affirmative employer defenses.The bill was signed by Governor DeWine on January 12 and becomes effective on or before April 13. The coronavirus has devastated businesses and families across Ohio in 2020, so businesses are in need of some good news right about now. That good news came late on December 22 when the Ohio Senate passed HB 352, significantly reforming Ohio’s employment laws. For more than 20 years, the business community has been asking lawmakers to address a list of what it perceives to be bad Ohio Supreme Court cases dating back to the early 1990s. Kegler Brown’s labor and employment law practice team has been at the forefront of helping craft and lobby for these changes since the first bill was drafted in 1999. The main reforms contained in the Act are numerous. Eliminates manager/supervisor liability, but retains an employer’s vicarious liability for employment discrimination claims.Improves Ohio’s workplace discrimination laws by allowing for timely, fair, and efficient resolution of claims for both employers and employees. Increases uniformity with federal law to allow for better predictability in employment discrimination lawsuits while maintaining robust protections for employees. Reduces costs to employers by eliminating the need for businesses to maintain six years’ worth of employee records. Provides affirmative defenses for employers that have robust protections and policies for handling claims of harassment.Eliminates employers’ having to defend claims before the Ohio Civil Rights Commission and in civil court simultaneously. Codifies limitations on non-economic and punitive damages for employment discrimination claims.Overview of Key ProvisionsIndividual Supervisor LiabilityHB 352 removes individual manager/supervisor liability, but retains an employer’s vicarious liability for discriminatory actions. Until the Ohio Supreme Court decided the Genaro v. Cent. Transport, Inc. case in 1999, manager/supervisor liability did not exist. In fact, federal law does not permit individual liability (see Wathen v. GE, decided in 1997) and Ohio is among a minority of states that permit it.Of course, the Ohio Supreme Court eliminated individual supervisor liability for public employers in 2014 with the decision in Hauser v. Dayton Police Department. Supervisors and managers, whether working for an Ohio public or private employer, need to be able to exercise their best professional judgment when making employment decisions without fear of being individually liable when acting in the interest of their employer.Two-Year Statute of LimitationFor more than 20 years, Ohio has maintained the longest statute of limitations in the nation for filing employment discrimination claims. The Ohio Supreme Court set a six-year timeframe for filing such claims in the Cosgrove v. Williamsburg of Cincinnati Management Company, Inc. case decided in 1994. But, in deciding the Cosgrove case, the Court directed the General Assembly to clarify the statute of limitations.HB 352 requires a charge to be filed with the Ohio Civil Rights Commission (OCRC) within 2 years after the alleged unlawful discriminatory practice relating to employment was committed. This effectively extends Ohio’s statute of limitations for filing charges with the OCRC from 180 days to two years for all charges. By way of comparison, the statute of limitations to file a charge with the Equal Employment Opportunity Commission (EEOC) is 300 days. In addition, many other states require a one- or two-year statute of limitation for filing an employment discrimination claim.The bill also requires lawsuits based on federal anti-discrimination laws (other than claims brought under Section 1981 of the Civil Rights Act of 1866), be brought within two years after the cause of action accrues.Dual ActionsHB 352 requires plaintiffs to first file state claims with the OCRC and aligns Ohio’s discrimination laws with Title VII. If signed, the legislation will provide the OCRC with the ability to track the number and type of allegations of discrimination occurring in Ohio – something presently unavailable due to the ability to simply file an employment discrimination claim into a court of common pleas around the state.The administrative exhaustion requirement also aids employers that want to expeditiously handle any issues that arise. Presently in Ohio, the first time an employer may become aware of an allegation of discrimination may be when a plaintiff files a civil suit in court, which could be 5 or 6 years after the incident occurred. The new requirement sets forth a procedure that recommends the employee first report any allegation directly to the employer to address any violations, then to the administrative agency (EEOC or OCRC) for exhaustion of remedies, then to court if other remedies have failed. This process and these timeframes are fair to both employers and employees.Affirmative DefenseIn an effort to incentivize employers to implement robust protections and policies for handling claims of harassment, HB 352 codifies the “Faragher-Ellerth” affirmative defense that exists in federal law. The affirmative defense provides employers with protection against hostile work environment claims when the employer can show that it had anti-harassment policies and complaint procedures in place and the employee failed to take advantage of these policies and procedures.Specifically, HB 352 grants an employer the ability to raise an affirmative defense in hostile work environment harassment claims if it can prove all of the following: the employer had an effective harassment policy; the employer properly educated employees about the policy and complaint procedures;the employer exercised reasonable care to prevent or promptly correct the harassing behavior; and the complainant failed to take advantage of any preventative or corrective opportunities. 
Consistent with federal law, the bill provides exceptions in the event a complainant can prove that taking preventative or corrective action would have failed or would have been futile. Also, the affirmative defense cannot be used when the alleged unlawful discriminatory action resulted in adverse, tangible employment action against the complainant, such as failure to promote, firing, or demotion. 
Age DiscriminationPresently under Ohio law, a plaintiff over the age of 40 has multiple avenues to pursue an age discrimination claim. This varying treatment for age discrimination creates unnecessary complications and confusion because each statute has different available remedies and procedural requirements. Current law treats discrimination based upon age differently than all other protected classes by allowing these multiple avenues.HB 352 unifies age discrimination claims with all other types of employment discrimination, bringing much-needed clarity to age discrimination claims. Likewise, claims filed seeking injunctive relief will happen exclusively under ORC 4112.14 or ORC 4112.02(A), and the choice will remain with the plaintiff as to which statute they want to use to pursue their claim. If the plaintiff pursues only injunctive relief, he or she will file the claim under RC 4112.052. Limitations on Non-Economic and Punitive DamagesHB 352 codifies non-economic and punitive damage limitations already applied in employment actions by courts today. The caps referenced in state law today are more favorable to claimant employees than those prescribed by the federal Civil Rights Act of 1991, capping such benefits for small employers (with more than 14, but fewer than 101 employees) around $50,000 and larger employers (with more than 500 employees) around $300,000.Effective DateGovernor Mike DeWine signed HB 352 on Tuesday, January 12, 2021. Therefore, the provisions outlined above will become law 90 days after his signature (April 12, 2021).Every employment law should strike the right balance between employee rights and employer obligations. When the pendulum swings too far toward employee rights, as it did in the 1990s with several Ohio Supreme Court decisions, balance must be brought back to the system. HB 352 strikes an appropriate balance between employers and employees. Please contact the Kegler Brown Labor & Employment practice team for assistance navigating local, state, federal and international employment laws.

E-mployment Alert
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School’s Out for the Coronavirus

Smart SummaryWith schools once again switching to remote learning, the FFCRA is once again front of mind for business owners and HR managers.Offering flexibility in telework and intermittent scheduling can help employers avoid having to grant FFCRA leave for working parents.HR departments should monitor the reasons for requested leave because a company is only eligible for FFCRA tax credits for qualified leave.“Out for summer, out ‘til fall, we might not come back at all.” Franklin County is now listed as purple on Ohio’s COVID-19 map, and three more counties are approaching that level. Last week, the city of Columbus and Franklin County issued a Stay-At-Home Advisory “strongly advising” residents to stay home, not travel outside the state, and forego houseguests during the holiday season. In light of these developments and the continued surge in cases, many Columbus-area schools are changing their learning models. Some (like Dublin, Reynoldsburg, and Worthington) have shifted to a full remote schedule for the rest of the year, while others are giving parents the option of in-person or remote learning. But even though school may be out, it doesn’t mean employees have to be. We’ve outlined the FFCRA paid leave options here, here, and here, but as a reminder, parents who are unable to work due to a need to care for children who are at home due to school and daycare closures can qualify for up to 12 weeks of paid leave under the expanded FMLA and emergency paid sick leave provisions of the FFCRA. This leave is paid at ¾ of the employee’s regular rate. As we move into this next phase and leave requests presumably increase, here are some key reminders for employers (with an assist from “School’s Out” by Alice Cooper). 1. “No more pencils, no more books.” (but Mom and Dad may still have to work) Perhaps the most important exception to the paid leave requirements is outlined in the FFCRA itself. It specifies that parents must be unable to work—including telework—due to the need to care for kids who are at home. This means that if you allow employees to work from home and/or on a flexible schedule, they may become ineligible for leave. For example, if an employee has children who will be home and needs to help them periodically throughout the school day, you can instruct the employee work his/her usual number of hours, but on a flexible schedule and outside typical working hours. Then, they are able to work and leave is not necessary. You could also allow the employee to take leave on an intermittent basis. In the example above, this might mean for only a couple of hours a day when the parent needs to help his/her children log on in the morning and in between Zoom sessions. In short, being flexible may help keep your employees working and out of a twelve-week paid absence. While school may have “been blown to pieces,” it doesn’t mean your workforce should be too. 2. “If that don’t suit ya, that’s a drag.” This past fall, the DOL updated it’s guidance on the applicability of FFCRA leave in anticipation of school closures and alternative schooling options. It specified that employees who chose to educate their children from home when the school gives them the choice of either online or in-person learning are ineligible for any form of paid leave. On the other hand, if the school mandates distance learning, whether on a hybrid schedule or full time, FFCRA leave is still available for the days children are at home. As the DOL explained, when parents are given an option and choose to school their children at home, out of concern for contracting COVID-19 at school for example, the school isn’t “closed,” as is required for FFCRA benefits. Given the different approaches taken by different school systems—and even different grades within the same school system—it will be important for HR departments to monitor the reasons for requested leave. Remember, your company is only eligible for FFCRA tax credits for qualified leave. 

E-mployment Alert
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Ohio’s New Retail Mask Order Compliance Checklist

Smart Summary Governor DeWine’s new order is materially different from the order this past summer and retailers need to adjust.Affected businesses should require masks, provide alternatives to eligible shoppers, post notice, designate compliance officers, promote physical distancing, and discuss how to handle angry customers.Be proactive- a second violation could result in the closure of your business for up to 24 hours.  Governor DeWine’s new mask order went into effect yesterday. If you are a store, retail business, or otherwise offer goods to customers in person, here’s your checklist for compliance. Require Masks The order requires all customers to wear a mask at all times unless they are medically or developmentally unable to do so. This requirement isn’t new. The governor’s original mask order went into effect over the summer, though this order specifies that cloth masks—as opposed to face shields—are what’s required of customers. Another new feature is the requirement that retailers provide those who are unable to wear cloth masks with specific alternatives. First, if someone is unable to wear a cloth mask, the company should allow them to wear a face shield. The only requirement is that the face shield must extend below the chin. As a second alternative, the order requires businesses to provide online and/or telephone ordering and no-contact pickup or delivery. Technically, this “personal shopping” must only be provided to those who can’t enter the store with a mask or compliant face shield. Post Notice Stores must post notice at all entrances requiring customers to wear a mask. Six sample notices are available for download here under the “Face Coverings” tab. Along with the required notice, we also recommend posting notice of your mask accommodations, stating that customers who are medically or developmentally unable to wear a cloth mask may enter with a face shield that extends below the chin. Also encourage individuals who are not able to wear a mask and do not have a compliant face shield to take advantage of remote ordering and pickup/delivery options. Designate a Compliance Officer + Decide How to Handle Tough Situations Each business is also responsible for designating a compliance officer(s). One compliance officer must be on-site at each business location for all business hours. If your employees rotate shifts, this means you’ll likely need to designate more than one compliance officer (though only one is required per shift). Compliance officers are responsible for ensuring that customers wear masks or properly take advantage of accommodations. The compliance officer is also the point of contact for local health department investigators and law enforcement officers. Compliance officers should also be instructed regarding how to address the difficult situation that arises when a customer refuses to comply with the order. If a person refuses to wear a mask (or compliant face shield if they cannot wear a mask), the compliance officer should first offer your personal shopping accommodation. If this doesn’t work, compliance offers can ask customers to leave or be denied entry. If the problem persists, some employers have instructed compliance officers to call local authorities to handle the situation and remove the offender. Of course, if a compliance officer or other employee ever feels that his or her safety is at risk, they should phone the police immediately. There is some ambiguity in the application of the order to those who cannot wear a mask for medical reasons; as a result of this, other retailers have elected to allow disgruntled customers to enter, but are taking steps to move those customers in and out of the store as quickly as possible. Note that the order contains a phone number where members of the public can report a business for not enforcing the order. The Bureau of Workers Compensation is tasked with investigating complaints and the second violation a company receives could lead to closure for up to 24 hours. Miscellaneous The order also requires employers to ensure physical distancing and hygiene. While most employers have already done so, you should mark six-foot separation spots at all check-out lines, designate aisles as “one way,” and limit or stagger the number of customers on the premises at a time. The order also requires retailers to place sanitizer in high-traffic areas, require regular employee handwashing, and disinfect high-touch items, such as carts and baskets after each use. 

E-mployment Alert
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Election 2020: Implications for Employers

Smart Summary The results of the 2020 election could potentially bring massive implications for Ohio employers in several critical areas.A Biden win could likely mean an increase in the federal minimum wage, increased DOL/FLSA enforcement, and expansion of the definition of “joint employers.”The election may also significantly affect the timing and key aspects of COVID-19 stimulus legislation, including extensions of the CARES Act and FFCRA.  Votes are still being counted and we may still be days away from an official announcement. But one thing we know for sure is that the results of the 2020 election may bring a number of changes to labor and employment law. Here are a few key topics for employers to watch, depending on the election’s final official results. 1. DOL + Wage and Hour In the event of a Biden victory, expect increases in the federal minimum wage and salary rates. Dems have suggested support for a $15/hour minimum wage rate. If this rate is increased, then the salary threshold (currently $685/week) would also likely increase to retain a sufficient gap between exempt and non-exempt employees under the FLSA- a $15 wage rate would result in approximately $600/week for full-time employees. Biden has also proposed increased penalties for worker misclassification, increased DOL/FLSA enforcement effort, increased staffing of federal agencies, and greater collaborative enforcement efforts between various agencies. The former vice president has also voiced support for legislation that would increase the standard to classify workers as independent contractors and expand the definition of “joint employers.” 2. Executive Orders There’s been much debate surrounding President Trump’s recent Executive Order 13950, which prohibits federal contractors from including race or sex stereotyping or implicit biases in workplace diversity and inclusion training. This will likely be withdrawn in the event of a Biden victory. 3. OSHA Biden has already stated that he’s committed to reinstating OSHA regulations that were altered during Trump’s presidency. He also has promised to increase the number of OSHA investigators and increase the agency’s enforcement efforts, especially in light of COVID-19. 4. NLRB and Other Administrative Agencies While Trump’s administration has largely favored employers, undoing many Obama-era pro-union rulings, this may be short lived. If Biden is elected, expect a shift back to where things were during President Obama’s term. This may include reversals of several decisions we discussed at our 2020 Managing Labor + Employee Relations Seminar (click to view), including the Apogee Retail (allowing confidentiality of workplace investigations) and Caesar’s Entertainment decisions (allowing employer limits on employee use of company email). Biden has also indicated support for the Protecting the Right to Organize Act (PRO Act). This Act would increase penalties for companies found to have interfered with union organizing, including personal criminal liability. He has also suggested additional funding to increase the number of NLRB investigators and extending organizing and bargaining rights to independent contractors. 5. COVID-19 Response Both sides have voiced support for another COVID- stimulus bill, but the timing of that legislation will likely depend on the presidential election. In the event of a change in office, there is a notorious lag in new legislation between election results and the swearing in of the 117 th Congress on January 3rd. This could mean additional wait time for new COVID-19 relief. Other pandemic response measures that might hinge on election results include an extension of the FFCRA and CARES Act, OSHA crackdowns, and potential tax credits for employers.

E-mployment Alert