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Governor Baker - Why We Need Regulatory Reform

Posted by Christopher Geehern on May 26, 2015 9:02:26 AM

Editor's Note - Governor Charles D. Baker delivered the following remarks about regulatory reform to the AIM Annual Meeting on May 8.

I also want to talk a little bit about what we're doing with respect to regulatory reform. I look at regulatory reform as sort of the equivalent of cleaning out your basement. It's something you probably ought to do every couple of years whether you want to do it or not.

Baker.2015The organizations that complained to me the most about the Commonwealth's regulatory structure over the course of the campaign, were cities and towns. By far.

Now there are 351 cities and towns in Massachusetts, and 250 of them have less than 20,000 people. We're basically a conglomeration of a lot of small towns and a few mid-sized cities and then one big one, Boston.

Those communities have all the same issues in dealing with regulatory complexity that you would expect that small and mid-sized businesses would have. Or small and mid-sized non-profits. Or small and mid-sized educational institutions.

Regulatory reform in some respects, from my point of view, is about providing the clarity and simplicity, and in some cases, the modernization of the way the state engages in regulatory activity to create a framework so that the small can play in the same playing field as the large.

For larger businesses, complex regulatory environments are a problem. For small and mid-sized organizations, in many cases, they're the difference between thriving and barely or maybe not at all getting by. And that's why this initiative, to me, is so important.

It's also important because it forces the Commonwealth, and this is a good thing, to have to have a conversation with the people it regulates, about what it does and how it does it, and how it might be able to do it better.

And anybody who doesn't think that's a valuable exercise needs to think really hard about how they go about managing their own enterprise and their own organization. This is about introspection as much as anything else. And it's about time.

Topics: AIM Annual Meeting, Charlie Baker, Regulatory Reform

Attorney General Offers Transition to Companies with Paid Leave Policies

Posted by John Regan on May 17, 2015 9:04:00 PM

Employers who offer sick leave or paid time off to workers now have a six-month transition period to comply with the state’s paid sick-time law under a new policy to be announced today by Attorney General Maura Healey.

AG.Maura.HealeyThe provision provides much-needed breathing room for employers, many of whom maintain they will be unable to adjust their payroll systems and implement the complex new law by its scheduled July 1 effective date.

Healey, who is currently developing regulations for the law approved by voters on November 4, announced that any employer with a paid time off policy in existence as of May 1 that provides to employees the right to use at least 30 hours of paid time off during the calendar year 2015 will be in compliance with the law from July 1 through January 1, 2016.

Employers seeking the “Safe Harbor” protection must extend the leave or paid time off to all employees, both full-time and part-time. Companies that do not currently offer paid time off to part-time workers may add those workers to their leave plans to qualify for the transition period.

Any paid time off used by an employee from July 1 to December 31 must be job-protected leave subject to the law’s non-retaliation and non-interference provisions. In all other respects during this transition period, the employer may continue to administer paid time off under current policies.

Companies meeting these qualifications must come into compliance by January 1. Companies that did not maintain a paid time off policy as of May 1 must comply with the new law by July 1, as scheduled.

“The provision represents a reasonable compromise that will allow employers already offering sick leave some time to implement the new law,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

“Attorney General Healey deserves tremendous credit for responding to the concerns of employers seeking to understand a complex new law and to comply with its provisions in a responsible manner. Employers look forward to continued discussions with the attorney general as she develops final regulations for earned sick time.”

Announcement of the compromise transition period follows weeks of intensive discussions among the business community, the Legislature and the attorney general over a law for which rules and regulations will be completed only days before July 1. AIM member-employers sent more than 800 messages to state officials last week reporting that the statute raises questions about how to integrate its provisions with existing paid-time off programs.

Among the issues:

  • Employers must determine the 12-month period during which employees will accrue up to 40 hours paid sick time at a rate equal to or greater than one hour for every 30 hours worked.
  • Employers must also decide whether to pay employees for any earned sick time that exceeds 16 hours at the end of the 12-month period. Employees may otherwise elect to use sick time exceeding 40 hours during the final weeks of the year instead of losing the time.
  • Perhaps the most complex challenge facing employers is whether to replace or merge existing vacation or time-off benefits with earned sick days. Such combinations are fraught with danger since any time off provided under the new law requires no more than seven days of advance notice from employees and might not be subject to verification.
  • Virtually all employees – full-time, part-time, temporary, seasonal and interns – are covered by the new law. And for employees who spend most of their working hours in Massachusetts but work in other states as well, all of their hours in all states will be used to accrue sick leave in the Bay State.

"We realize that the new policy announced by the attorney general is not perfect and that many companies, particularly those with large numbers of part-time employees, will face challenges. AIM will work with all employers to navigate the best course through this complex issue," Lord said.

Healey will today kick off a series of six public hearings across the state to gather comment on draft regulations published on April 24. Today’s hearing will take place from 10:30 am – 1:30 pm at 100 Cambridge Street in Boston.

The attorney general’s office will accept comments through June 10 before issuing the final regulations. 

AIM encourages employers who plan to attend any of the hearings to contact Brad MacDougall, bmacdougall@aimnet.org, for details.

Topics: Employment Law, Paid Sick Days, Mandated Paid Sick Days, Maura Healey

Governor Baker Addresses AIM Annual Meeting

Posted by Christopher Geehern on May 17, 2015 8:10:21 PM

Governor Charles D. Baker discussed economic growth, regulatory reform, overhauling the T and other issues during a keynote speech May 8 to the AIM Centennial Annual Meeting.

Topics: AIM Annual Meeting, Charlie Baker, Regulatory Reform

Correct Metrics Key to Sustainability Programs

Posted by Wayne Bates on May 14, 2015 8:30:00 AM

(Editor's Note: Wayne Bates, Ph.D., Vice President at Capaccio Environmental Engineering, moderates the AIM Sustainability Roundtable.)

A successful sustainability program is directly related to a company’s ability to identify and measure the “right” performance indicators. Organizations must be able to readily identify progress toward achieving its goals and quickly respond to key indicators.

InnovationSmall-2That means identifying the appropriate sustainability trends specific to your business, as well as the metrics necessary to measure progress against the goals and objectives put in place to respond to these trends.

For example, a company that uses a “high profile chemical” in its product or processes must be acutely aware of the source of chemical, the quantities used, and its ultimate disposition (e.g., final product, by-product or emission).  Being “acutely aware” requires that systems be in place to support the collection, management, analysis and reporting of this data, which as many of us know, presents several challenges. 

Sustainability professionals are challenged with the fact that much of this information resides across diverse departments within their organization that may not have the same sense of urgency to collect or process the data. Even more challenging is that certain information, such as traceability to a source, may only be obtained from the supply chain. Some suppliers may not be in tune with your need for the information, others may not have the information, and a select few may withhold information because they have determined it is proprietary.

The good news for many companies is that some of the needed data is already being collected within the organization and may be used as a starting point to build a sustainability program and/or a sustainability report.

Available data may include utility bills (water, sewer, power), environmental reporting (Tier II, Form R, GHG) and safety metrics (lost work days, injury and illness reports).  The first step is to identify who owns the data - utility bills may be handled by accounts payable, Tier II reports by the facilities or environmental departments, and safety data by the health and safety department or human resources.

The next step is to establish a data-management system capable of collecting information in a format that is cross-functionally compatible within the organization. With an increase in cloud and web-based database solutions, some sustainability professionals are turning to commercially available software products, while others are developing custom-built applications or software suites leading to efficient management and reporting systems.

The key challenge is to obtain sufficient documentation from the data owners to support data trends and claims reported to external stakeholders.

Understanding and addressing the challenges with gathering, managing, and reporting environmental health and safety data is a major first step along an organization’s sustainability journey. Want some practical advice on data management from sustainability experts? Join us at the June 18 AIM Sustainability Roundtable where our panel will discuss the benefits that can be realized through efficient and effective data collection. 

Register for the AIM Sustainability Roundtable

 

Harpoon Co-Founder to Chair AIM Board

Posted by Christopher Geehern on May 10, 2015 11:17:50 PM

Daniel Kenary, Chief Executive Officer and Co-Founder of Harpoon Brewery in Boston, was elected Friday as chairman of the board of directors of Associated Industries of Massachusetts (AIM).

KenaryKenary will lead the commonwealth’s largest employer association for the next year as AIM observes the centennial of its founding in 1915. Directors elected Kenary by acclamation at the AIM annual meeting at the Westin Boston Waterfront.

“AIM celebrates its 100th birthday at a time when the future of the organization has never been brighter,” said Kenary, who helped to launch the craft beer movement in the United States when he and two partners started Harpoon in 1986.

“This association represents the most successful example of civic engagement ever conducted by employers in Massachusetts. The 4,500 employer-members of AIM remain committed to creating an economy in which employers can grow and create opportunity for the citizens of Massachusetts.”

Harpoon has created plenty of its own opportunity since Kenary began brewing beer in warehouse space on the Boston waterfront. From those humble beginnings, the company has grown into the thirteenth largest craft brewery in the United States, turning out 210,000 barrels of IPA and other brews annually for customers in 24 states.

Harpoon became a company owned by its 184 employees in 2013.

“Dan Kenary knows what it is like to build a business from the ground up in Massachusetts. He’s just the sort of visionary entrepreneur who is perfect to lead Associated Industries of Massachusetts into its next century,” said Richard C. Lord, President and Chief Executive Officer of AIM.

“What better example of the power of economic transformation than a company grown on the Boston waterfront where everyone on the production line is an owner.”

Watch Video of Dan Kenary

Kenary succeeds Gary Magnuson, Executive Vice President of Citizens Bank N.A. in Boston, who served as AIM board chair for three years.

Elected as vice chairs of the association Friday were John M. Lynch, Esq., Principal, Lynch, DeSimone & Nylen LLP, Boston; and John C. Stowe, President, LUTCO, Inc., Worcester. Joanne K. Hilferty, President & CEO, Morgan Memorial Goodwill Industries, Inc., Boston, was elected treasurer, and Dennis J. Leonard, President, Delta Dental Plan of Massachusetts, was elected assistant treasurer.

Topics: AIM Annual Meeting, Daniel Kenary

Governor: Economic Growth Builds Great State

Posted by Christopher Geehern on May 8, 2015 2:55:00 PM

Governor Charles D. Baker inaugurated the centennial celebration of Associated Industries of Massachusetts today by telling more than 900 business leaders that economic growth “is always going to be the foundation of a great state.”

Baker2014“Without expansion, it becomes very hard to accomplish much with our good works agenda,” Baker said during a keynote address at AIM’s 100th Annual Meeting in Boston.

The governor said that his administration and the Legislature are making significant progress on a number of key issues, including balancing the state budget, regulatory reform and the MBTA.

Resolving an unexpected $765 million structural budget shortfall for the current fiscal year and a $1.8 billion deficit for Fiscal Year 2016 will permit state officials to develop strategic financial plans moving forward, according to Baker.

“It gives you the ability to think strategically about what to do with your resources,” he told the crowd.

On regulatory reform, the governor said it has been the 351 cities and towns of Massachusetts that have been the strongest voices for creating an efficient and modern system of regulations. Small and medium-sized towns, along with small and medium-sized businesses, Baker said, are the entities that will benefit most from reform.

The idea is “to create framework so the small can play on same playing field as the large. For small and mid-sized organizations, it is the difference between thriving and barely getting by or not getting by.”

Baker said every Massachusetts employer and resident has a stake in overhauling the MBTA since more than half of the revenue for the transit system comes from people who do not ride it. He also implored business leaders to involve themselves in solving the opiate crisis, which last year took more lives in Massachusetts than automobile accidents.

The governor noted that AIM has done well to survive and prosper in the rough-and-tumble world of Massachusetts politics.

“You should be enormously proud of the work that AIM has done for a century on behalf of businesses in the Commonwealth of Massachusetts,” Baker said.

Topics: AIM Annual Meeting, Charlie Baker, Regulatory Reform

Confidence Pulls Back on Manufacturing Concerns

Posted by Andre Mayer on May 5, 2015 10:41:24 AM

Employer confidence paused from an eight-month run-up during April as Massachusetts manufacturing companies grew skittish about weak growth domestically and challenges in global markets due to the stronger dollar.

BCI.April.2015The Associated Industries of Massachusetts Business Confidence Index declined 1.1 points to 59.1 last month, pulling back from a post-recession high reached in March. The measure remains six points above its level of April 2014 despite a weak first quarter of national economic growth.

“The Index’s decline is attributable to lower confidence among the state’s manufacturers…” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

Paul Bolger, President, Massachusetts Capital Resource Company, added that “In addition to weaker-than-expected domestic growth, Massachusetts manufacturers are seeing their exports hit by a strong dollar and by particular weakness in their two major market regions, Western Europe and East Asia.

“Manufacturers and survey respondents outside Greater Boston were markedly less positive than others about in-state business conditions,” he added.

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The April pullback broke a string of monthly gains in business confidence stretching back to August 2014. Employers continue to have a brighter view of the state economy than of national conditions. Alan Clayton-Matthews of Northeastern University noted that Massachusetts performed better than the country as a whole during the difficult first quarter.

Three sub-indices bearing on survey respondents’ own operations all edged off fractionally in April.  The Company Index, reflecting overall business conditions, lost six-tenths to 61.0; the Sales Index was off eight-tenths to 61.7; and the Employment Index was down half a point to 57.3.

 Richard C. Lord, President and CEO of AIM, said any weakening of confidence among manufacturers has implications for the overall economy.

“Our association was founded in 1915 by Massachusetts manufacturers, and in our centennial year that group remains a core component of our diverse membership,” Lord said.

“Manufacturing is likewise a pillar of our economy, the key sector in many communities and regions of our commonwealth, and an unmatched provider of jobs that support upward mobility. So when manufacturers’ confidence lags, when they are less enthusiastic than other employers about business conditions in Massachusetts, we are concerned.” 

Topics: AIM Business Confidence Index, Massachusetts economy, Economy

Governor Seeks to Head Off Premium Shock from Federal Health Reform

Posted by Katie Holahan on May 1, 2015 11:17:18 AM

Governor Charlie Baker is seeking to preserve several key elements of the Massachusetts health-insurance market rather than implement provisions of the Affordable Care Act (ACA) that could raise premiums for some small Bay State employers by more than 50 percent.

health_careThe governor, in a letter Monday to U.S. Health and Human Services Secretary Sylvia Matthews Burwell, asks the federal government to postpone the requirement that Massachusetts expand its small-group health-insurance market next year from companies with 1-50 employees to those with 1-100 employees.

Baker also seeks permission for Massachusetts to use its current group of rating factors to price health insurance for small businesses. The commonwealth has for many years used 11 rating factors in its merged individual and small-business health insurance market, but federal health reform is phasing that number down to four.

The governor says in his letter to Burwell that “there continues to be significant concern about the impact the ACA market rules will have on the Massachusetts market.”

“Decreased use of the rating factors has already led to significant premium swings that have disproportionately affected small businesses,” Baker writes.

“The eventual elimination of the rating factors, as well as the restriction limiting insurers to file their rates on an annual basis, will lead to further disruption and instability in the marketplace.”

Former Health and Human Services Secretary Kathleen Sebelius rejected a request from then-Governor Deval Patrick in September 2013 for a waiver from the same provisions of federal health reform. Rejection of the waiver came despite last-minute letters of support to Sebelius from U.S. Representatives Michael Capuano, Stephen Lynch and William Keating.

Associated Industries of Massachusetts strongly supports Baker’s request to maintain portions of the successful 2006 Massachusetts health-care reform.

“Imposition of new definitions of the small-group market and elimination of rating factors introduces needless uncertainty into the market for health insurance. Why disrupt a system that works here in Massachusetts where 97 percent of people have health insurance?” said John Regan, Executive Vice President of Government Affairs at AIM.

Massachusetts has begun a four-year transition period under which the value of the rating factors that will eventually disappear slowly decreases:

  • For plan years beginning on or after January 1, 2014 but before January 1, 2016:  Two-thirds of the level of the value of the disallowed factors may be used;
  • For plan years beginning on or after January 1, 2016 but before January 1, 2017: One-third of the level of the value of the disallowed factors may be used;
  • For plan years beginning on or after January 1, 2017, issuers must be in full compliance with federal rating rules.

The decrease in (and eventual elimination of) certain rating factors could result in premium rate changes for certain groups. The biggest fluctuation in terms of cost will stem from the change in the size factor. Currently, larger businesses benefit from the size factor, with smaller businesses paying more; so when that factor is limited, the larger businesses will see an increase in cost.

Elimination of the wellness program participation factor is also expected increase relative premiums for groups with healthier populations.

Topics: Health Care Reform, Health Care Costs, Charlie Baker

Legislators Resist Date Change for Sick-Leave Law as Employers Struggle with Regulations

Posted by Christopher Geehern on Apr 30, 2015 3:28:00 PM

A day after Beacon Hill lawmakers again declined to delay the start of the new earned sick-time law, employers barraged AIM experts with more than 550 questions today about proposed regulations for the statute with which they must comply eight weeks from now.

SneezeMore than 600 Bay State employers used an AIM Webinar to express confusion over details ranging from which employees will be eligible for paid sick time to the wisdom of merging existing paid time-off programs into the new law.

“The overwhelming number of people who took part in the Webinar and asked questions underscores the problem that employers are going to have implementing a complex and far-reaching law for which only draft rules of the road now exist,” said Russ Sullivan, Vice President in the AIM Employers Resource Group and one of the Webinar leaders.

“This was the largest turnout for an information Webinar in my time at AIM and I know we had many other employers who wanted to attend but were tied up.”

The House of Representatives on Wednesday rejected a budget amendment from Minority Leader Brad Jones (R-Reading) that would have delayed the July 1 implementation date for paid sick time by 90 days.

“So the regulations wouldn't be finalized until just days before this takes effect, so businesses will have only a matter of days to make changes to payroll and how they run their business,” Jones said during floor debate.

Other legislators disagreed.

“Payroll is fairly straightforward. I'm married to an accountant. I encourage members to stay the course and honor the will of the voters and allow this law to follow the timeframe,” said Rep. Denise Provost, D-Somerville.

The amendment failed by a vote of 113 to 45.

It marked the second time in as many weeks that the Legislature rebuffed efforts by AIM to change the effective date of the law approved by voters November 4. The state Senate turned back a similar amendment on April 16.

Sullivan and fellow AIM Vice President Tom Jones, Esq., told employers during today’s Webinar that the paid sick-days law will impact every Massachusetts company, as well as out-of-state companies with employees in Massachusetts. They also warned that companies with existing paid time-off plans may not comply with the new law.

Among the issues raised by employers:

  • Employers must determine the 12-month period during which employees will accrue paid sick time at the rate of one hour for every 30 hours worked. Sullivan and Jones recommended using the same 12-month calendar or fiscal year for all employees.
  • Employers must also decide whether to pay employees for any earned sick time that exceeds 16 hours at the end of the 12-month period. Employees may otherwise elect to use sick days during the final week of the year instead of losing the time.
  • Perhaps the most complex challenge facing employers is whether to replace or merge existing vacation or time-off benefits with earned sick days. Sullivan said such combinations are fraught with danger since any time off provided under the new law requires no more than seven days of advance notice from employees and might not be subject to verification.
  • Virtually all employees – full-time, part-time, temporary, seasonal and interns – are covered by the new law. And for employees who spend most of their working hours in Massachusetts but work in other states as well, all of their hours in all states will be used to accrue sick leave in the Bay State.

“It doesn’t matter what you classify an employee as. Applicability is going to be determined by the actual number of hours worked over time,” Jones said.

The Attorney General’s office has scheduled six public hearings on the draft regulations and will accept comments through June 10. Employers who wish to submit comments or to testify at a hearing should contact Brad MacDougall, Vice President of Government Affairs, at bmacdougall@aimnet.org.

Contact the Attorney General and Your Legislator  Postpone the Paid Sick-Time Law

Topics: Massachusetts Legislature, Employment Law, Paid Sick Days, Mandated Paid Sick Days

Governors Address $7.5B Energy Question

Posted by Robert Rio on Apr 27, 2015 8:44:53 AM

$7.5 billion.

That’s the amount of money Connecticut Governor Dannel P. Malloy says has been added to the electric bills of New England employers and homeowners during the past two years because of natural-gas pipeline constraints.

ElectriclinessmallEmployers should therefore be encouraged that five New England governors, including Massachusetts Governor Charlie Baker, met in Hartford last Thursday and pledged to work together to help consumers who pay more for electricity than almost anywhere else in the United States. While the costs and political challenges of investments in natural gas pipelines, transmission wires and renewable energy remain formidable, the governors nevertheless acknowledged that solving the energy crisis “is greater than any one state can solve alone.”

“We recognize that each state may support addressing our regional energy challenge in different ways. These efforts must be done in partnership with state legislatures, and respecting the requirements of laws, regulatory proceedings, and opportunities for public participation that are unique to each individual state,” the governors said in a statement.

“Together and respecting the bounds of individual state laws, we plan to continue to work to seek out economically beneficial infrastructure solutions to New England’s power system challenges. We are committed to working as a region to advance New England’s shared economic, energy, and environmental goals.”

The statement was consistent with the recommendations that AIM and statewide business organizations in Connecticut, New Hampshire and Maine made to the governors in an April 1 letter noting that regional and federal policies have boosted New England’s reliance on natural gas to generate electricity from 15 percent to more than 50 percent.

“Until now, our associations worried about lost job growth and economic activity as … enterprises expanded operations elsewhere. Given the current energy crisis, we now face a bleaker scenario: employers moving existing jobs out of New England to lower-cost locations around the country or world,” the business associations said.

“Lack of urgent leadership by New England’s governors may well lead to higher unemployment and a lagging economy for years to come.”

Average electric rates in Massachusetts are the third highest in the nation for industrial ratepayers, and more than twice as high as companies pay in the competitor state of North Carolina. Those costs place employers at a significant disadvantage when competing with businesses located in other areas of the country.

AIM has long maintained that any solution to the region’s energy problem must be fair to ratepayers, market based and implemented without subsidies that force one group of customers to pay the freight for others. The association has opposed programs like Cape Wind that gouge ratepayers without providing meaningful benefits. 

In addition to communicating with the New England governors, AIM currently sits on a commission to bring the commonwealth’s solar energy program into line with other states that install solar for less than half the price of what Massachusetts consumers pay. The association also represents employers on the Energy Efficiency Advisory Council, which oversees nearly $1 billion in annual spending for energy efficiency.

AIM and its 4,500 member employers urge the New England governors to continue their discussions and to solve one of the key burdens facing the regional economy.

AIM has recently established an Employer Energy Interest Group. If you would like to be on this group and receive regular updates, please email me at rrio@aimnet.org.

Topics: Electricity, Energy, Charlie Baker

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