Last week, state House lawmakers returned to Harrisburg for the final session week of the year, advancing legislation to reform the state’s unemployment compensation system and make it easier for individuals to form worker cooperatives, as well as various other proposals, including some that would impose new mandates on employers.

Here’s a recap of last week’s legislative action most relevant to employers:

 

H.B. 274 (Unemployment Compensation)

The House of Representatives voted 157-46 to pass House Bill 274 last Wednesday. The bill had previously passed the state Senate 42-5 and now heads to Gov. Shapiro, who is expected to sign it in the coming days.

This legislation includes a number of PA Chamber priorities: it targets “ghosting” in the hiring process, fixes a technical issue that would have raised system costs, strengthens requirements on claimants recently deemed ineligible, and adds new measures to help employers avoid tax increases when former workers qualify for benefits.

The bill also includes legislation the PA Chamber had previously opposed to delay implementation of a new method for determining benefits levels. This legislation was amended in the Senate with a package of Unemployment Compensation (UC) reforms the PA Chamber negotiated with stakeholders.

While we remain concerned with a number of provisions, the overall package will improve solvency of the Unemployment Compensation Trust Fund, which will hopefully help avoid employer tax increases and the need to borrow money.  The bill also codifies that claimants who discourage their own employment are not eligible for UC, which responds to employer reports of “ghosting” in which UC claimants skip job interviews or ignore job offers to continue receiving benefits.

CLICK HERE for our memo to the House encouraging lawmakers to vote for the bill.

 

H.B. 135 (Worker Cooperatives)

The House also voted 194-9 to pass House Bill 135 last Tuesday.

This legislation would lower from five to three the number of individuals required to form a worker cooperative.

A worker cooperative is a specific business model in which the business is owned and operated by its employees, who may be eligible for certain tax benefits.  Under current Pennsylvania law, five individuals are required to file as a cooperative corporation.

We understand there is interest from smaller groups of individuals to create a cooperative, and we see no reason why the state government should prevent individuals from pursuing a business model they believe is in their best interest.

We supported this legislation (CLICK HERE for our committee memo), which now moves over to the Senate.

 

H.B. 1825 (PA Human Relations Act Policy and Posting Requirements)

The House of Representatives also voted 110-93 to pass House Bill 1825 last Tuesday.

This legislation would require employers to adopt and post written policies and procedures for preventing harassment, discrimination, and retaliation against employees.

The bill imposes new requirements on employers to adopt specific policies as eventually outlined by the PA Human Relations Commission and post those policies in the workplace.

The PA Chamber expressed concerns with the mandate and suggested a number of amendments to improve the bill and mitigate the impacts on employers. A number of our recommendations were ultimately adopted, including:

• Directing the PHRC to develop model policies for employers;
• Allowing employers to comply by including the posting on a website accessible by employees;
• In the event there are any changes to the law, the PHRC is required to update the posting and alert employers of the change, including via electronic notification;
• Waiving penalties for first time offenses, unless the PHRC can demonstrate willful disregard by the employer; and
• Including in the posting a “Prohibition on making false and frivolous reports of harassment, discrimination and retaliation, including any disciplinary consequences for an employee who knowingly makes a false or frivolous report.”

 

This legislation now moves on to the Senate.

 

H.B. 1191 (Rail Mandates)

The House Consumer Protection, Technology, and Utilities Committee voted 23-3 to advance House Bill 1191 last Tuesday.

This legislation imposes state-level mandates on rail operations, including train-length limits, minimum crew sizes, expanded access to railroad property, and additional reporting and equipment requirements that duplicate or conflict with federal regulations and ignore technological advancements.

These proposed mandates would disrupt interstate commerce, force costly operational changes, and create supply chain delays for industries critical to Pennsylvania’s economy such as energy, manufacturing, and agriculture. The bill increases compliance costs without improving safety, undermining competitiveness for businesses across the Commonwealth.

We opposed this legislation (CLICK HERE for our memo), which now advances to the full House.

 

H.B. 1522 (Fuel Gas Mandate)

The House Consumer Protection, Technology, and Utilities Committee also voted 15-11 to advance House Bill 1522 last Tuesday.

This legislation would require the installment of fuel gas detectors in commercial, industrial and residential buildings.

The business community has not been consulted and a number of concerns have been raised with this mandate. Accordingly, we requested the committee hold off consideration while questions can be addressed; the bill now advances to the full House.