The House and Senate were in session last week, considering proposals related to income taxes, school choice, wage laws, workers’ compensation, and more. Here is a rundown of some of last week’s legislative action relevant to employers.
Equal Pay Law Weaponization (H.B. 98)
The House of Representatives voted 102-99 to pass House Bill 98 last Monday.
This legislation would make drastic changes to Pennsylvania’s Equal Pay law, adding new vague standards, essentially gutting the exceptions section of the law, and making it nearly impossible for an employer to defend against a legal action brought under this Act. The bill would also restrict the type of questions employers may ask job applicants related to wages, significantly increase penalties, create new causes of action, extend the statute of limitations from two to three years, and allow for uncapped punitive damages.
Federal and state laws require employers to pay women and men equally for equal work; however, this bill replaces the “equal work” standard with a far more subjective and vague “comparable work” standard. Current law has also always recognized pay disparities often do exist for reasons that have nothing to do with discrimination, and therefore provides several exceptions.
This proposal guts these exceptions, putting the burden on employers to demonstrate that discrimination was not a factor and setting an impossibly high bar to do so. This legislation will expose honest, law-abiding employers to lawsuits and severe penalties, which may particularly harm small businesses.
We opposed this legislation (CLICK HERE for our memo), which now heads to the Senate Labor and Industry Committee for consideration.
Income Tax Reduction (S.B. 269)
The Senate voted 36-14 to pass Senate Bill 269 last Tuesday.
This legislation would reduce Pennsylvania’s Personal Income Tax (PIT) rate from 3.07 percent to 2.8 percent. The bill would also eliminate the Gross Receipts Tax (GRT) on Pennsylvanians’ energy bills starting in 2025 and establish a $500 tax credit for certified volunteer Emergency Medical Technicians (EMTs).
If enacted, Senate Bill 269 would deliver the largest tax cut of its kind in the state’s history and deliver more than $13 billion in savings for Pennsylvania taxpayers over the next five years, according to Senate Republican leaders. In a show of bipartisan support, eight Senate Democrats joined all Senate Republicans in voting for the bill on final passage.
Senate Bill 269 now heads to the House of Representatives for committee consideration.
Lifeline Scholarships (S.B. 795)
The Senate Education Committee voted 8-3 to advance Senate Bill 795 last Tuesday.
This legislation would offer more educational options to children in low-performing public schools by establishing the Pennsylvania Award for Student Success (PASS) scholarship program to provide students with scholarships to attend a parochial or private school of their choice.
Despite the Legislature’s significant investment in public schools, including a nearly 60 percent increase in K-12 spending over the past decade, Pennsylvania students continue to perform at or below the national average on state testing in reading, math, and science. These trends portend significant challenges ahead for students and Pennsylvania employers’ ability to find and hire qualified applicants.
The PA Chamber’s member-driven, board-approved education policy statement specifically outlines support for “policies that provide and strengthen competitive educational systems and programs, that provide options for parents and students.”
We supported this legislation (CLICK HERE for our memo), which is now pending before the full Senate.
Workers’ Compensation Expansion (H.B. 1632)
The House of Representatives voted 154-46 to pass House Bill 1632 last Wednesday.
This legislation would dramatically expand eligibility for workers’ compensation disability benefits for various categories of employees diagnosed with mental health conditions.
Under current law, mental health conditions are generally compensable for workers’ compensation medical and wage-loss benefits if they are related to a physical injury or the result of an incident outside of the normal scope of employment. Otherwise, mental healthcare costs are generally covered by regular health insurance.
This legislation – which is intended to cover emergency response personnel diagnosed with Post-Traumatic Stress Injury – would trigger eligibility for workers’ compensation without safeguards to avoid misuse, which could increase costs significantly and incentivize plaintiffs’ attorneys to file unwarranted claims.
We worked with the bill’s sponsor to make several improvements to the bill via amendment, but there are still concerns among employers with the underlying proposal (CLICK HERE for our memo). The bill now heads to the Senate for committee consideration.
Healthcare Workplace Bill (H.B. 2247)
The House Labor and Industry Committee voted 11-14 to advance House Bill 2247 last Wednesday.
This legislation proposes a comprehensive framework to regulate workplace violence prevention in healthcare facilities.
The bill includes policies focused on training, reporting, establishing internal committees, risk assessment, among other areas. The PA Chamber appreciates and agrees with the intent of this bill; however, legislation of this magnitude, with the power to regulate healthcare workplaces, should be developed in consultation with the regulated community.
As such, we urged lawmakers to hold off on considering this proposal further until they can engage with impacted employers and work cooperatively to develop policies that are both effective and workable (CLICK HERE for our memo). The bill is pending before the full House of Representatives.
Electronic Payment of Wages (S.B. 1026)
The Senate Labor and Industry Committee voted unanimously to advance Senate Bill 1026 last Wednesday.
This legislation would permit employers to pay all wages by electronic means.
Employers in Pennsylvania are currently allowed to pay employees through payroll or direct deposit. While the vast majority of employees agree to and prefer electronic payment, an employer is required to accommodate a request for a paper check if even a single employee requests it.
This requirement creates administrative challenges and inefficiencies for employers who must maintain systems and processes to prepare for and accommodate potential requests for paper checks. This legislation would permit employers to pay employees exclusively by electronic means, either through direct deposit or a payroll card.
We supported this legislation (CLICK HERE for our memo), which is pending before the full Senate.
Prevailing Wage Act Expansion (S.B. 841)
The Senate Labor and Industry Committee also voted 10-1 to advance Senate Bill 841 last Wednesday.
This legislation would expand the PA Prevailing Wage Act to include custom fabrication and prohibit the practice of paying split rates.
The PA Prevailing Wage Act requires pre-determined wages to be paid to employees on public construction projects and can substantially increase project costs. This legislation would expand this requirement into custom fabrication work which will raise costs on taxpayers, potentially divert projects to out-of-state competitors, and create administrative challenges for employers.
We have concerns from both a taxpayer perspective, as significant cost increases on school districts and local governments can lead to property tax hikes; and on behalf of custom fabrication companies, who have expressed concerns that this legislation would drive work to out-of-state competitors and negatively impact their workplace.
Senate Bill 841 would also prohibit the practice of paying “split rates” which employers utilize to promote efficiency on a worksite. Eliminating this option will no doubt increase project costs, though we are not aware of any analysis conducted to understand the impact on taxpayers.
As such, we urged the committee to hold off consideration of this bill and provide time and a process for lawmakers and the public to better understand the implications (CLICK HERE for our memo). This legislation is pending before the full Senate.