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Trade Vote Benefits Massachusetts Economy

Posted by Kristen Rupert on Jun 25, 2015 3:52:27 PM

Weeks of heart-stopping twists and turns in the debate over international trade agreements finally appear to have ended in Washington with a big boost for international commerce.

USCapitolYesterday, the U.S. Senate agreed on a bill to give the president "Fast-Track" authority for international trade deals.  The House of Representatives had already approved the bill. Also called "Trade Promotion Authority," or TPA, this legislation gives the president the power to ask Congress for a simple Yes or No vote when US-negotiated international trade agreements are presented for approval. No amendments or filibusters are permitted. 

The measure brings the United States a big step closer to concluding negotiations for the TPP, or Trans-Pacific Partnership, which involves 12 Pacific Rim countries representing 40 percent of the world's economic output. With China's influence expanding significantly, the U.S. and its longtime strategic partners in the Asia-Pacific region are seeking to finalize the deal promptly.

Meanwhile, the US is negotiating another large trade deal called TTIP, or Transatlantic Trade & Investment Partnership, with the European Union, although those negotiations will not conclude for several years.

Why does trade matter?

We live in a global world.  For centuries, Massachusetts companies have manufactured products and sold them in global markets.  In the next decade, millions of people in Latin America, Asia, Africa and the Middle East will enter the middle class.  Families from these emerging economies are purchasing consumer goods, paying for health care, and opening bank accounts.

The rising demand for US-made products and services gives Massachusetts companies an excellent opportunity to increase exports and expand jobs at home.  Bay State firms producing semiconductors, plastic containers, molding equipment, medical devices, software, pharmaceuticals, foodstuffs and financial services are already benefiting from globalization, and the trend is expected to continue.

Trade agreements remove economic barriers. The US currently maintains 20 such agreements with countries as varied as Morocco, Australia, Israel and Singapore, in addition to the North American Free Trade Agreement (NAFTA) with Canada and Mexico.

Making trade easier involves lowering or eliminating tariffs, streamlining regulations, standardizing testing and labeling requirements, easing restrictions, protecting intellectual property and workers' rights, and ensuring environmental protection.  All these issues are components of the two massive trade deals in which the US is engaged. 

Massachusetts companies exported more than $27 billion in commodities to world markets last year. Exports are a key driver of the Massachusetts economy, and trade agreements such as the TPP and TTIP will benefit Massachusetts employers in a variety of industry sectors and ultimately lead to more international trade. This week's Trade Promotion Authority bill, which President Obama is expected to sign shortly, is an important step in furthering free and fair trade.

Topics: International Trade, Massachusetts economy, U.S. Congress

Non-Compete, Independent Contractor Issues Define State Approach to New Economy

Posted by Christopher Geehern on Jun 23, 2015 9:10:32 AM

Microsoft Founder Bill Gates once said that “The intersection of law, politics and technology is going to force a lot of good thinking.”

jobsearchcomputer.smallPerhaps, but it is also forcing a lot of muddled thinking as state and federal policymakers struggle to define a rapidly evolving economy with traditional laws and regulations. Associated Industries of Massachusetts will today seek to change some of that thinking on two issues that are critical to the commonwealth’s economic future – the ability of employers to protect intellectual property with non-compete agreements and the ability of entrepreneurs to work as independent contractors.

AIM plans to provide testimony on the two issues at a hearing of the Massachusetts Legislature’s Joint Committee on Labor and Workforce Development. The association opposes efforts to ban or limit the use of non-compete agreements and favors changing the law that prevents virtually any individual in Massachusetts from unambiguously passing the legal test to qualify as an independent contractor.

“The 4,500 member employers of AIM believe that government should encourage the research, innovation and investment that make the Massachusetts economy unique. Maintaining non-competes and broadening the definition of independent contractors will ensure that great ideas continue to generate good jobs here in the commonwealth,” said John Regan, Executive Vice President of Government Affairs.

Massachusetts lawmakers last year rejected efforts by a small group of well-heeled venture capitalists to ban the use of non-compete agreements in the commonwealth. AIM believes the non-compete issue is about choice for both individuals and employers, who should be free to negotiate contracts of mutual benefit as long as the employee is a part of the process.

Employees already enjoy legal protection against overly restrictive non-compete agreements.  Case law dictates that enforcement of agreements occurs only when:

  • they are narrowly tailored to protect legitimate business interests;
  • they are limited in time, geography, and scope;
  • they are consonant with public policy; and
  • the harm to the employer from non-enforcement outweighs the harm to the employee.

“Non-compete agreements may not be used to curtail ordinary, fair competition or to prevent employees from using their general skills. Massachusetts has a long history of case law that strikes the right balance between employee freedom of mobility and financial incentives with employer interests in protecting intellectual property (IP), trade secrets, confidential information, and goodwill,” says Brad MacDougall, Vice President of Government Affairs at AIM.

The association surveyed its members last year and found that non-competes are used widely in every segment of the Massachusetts economy, including manufacturing, life sciences, medical devices, finance, retail, marketing, publishing, construction, energy, professional services, insurance and health care. A manufacturing company with fewer than 50 employees wrote on the survey that eliminating non-competes “could put us out of business.”

The independent contractor issue revolves around an overly restrictive statute that leaves Massachusetts on the sidelines of one of the fastest developing sectors of the economy.

One out of every three American workers, from software engineers and researchers to graphic designers, freelance journalists and nannies, today works independently outside the bounds of traditional 9-to-5 employment. The trend includes the so-called sharing economy that provides apps allowing individuals to exchange goods and services ranging from rides to housecleaning.

But Massachusetts' share of that job growth is threatened by a state law that imposes a confusing and complex three-factor test to determine whether a worker is an employee or independent contractor.

Employees must currently meet three requirements to be considered an independent contractor:

  1. The individual is free from control and direction in connection with the performance of the service, both under his/her contract for the performance of service and in fact; and
  2. The service is performed outside the usual course of the business of the employer; and,
  3. The individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed. 

An advisory from the Massachusetts attorney general in 2004 concluded that “the new law is so broad in its definition of employee that virtually every occupation, individual entrepreneur and every employer, including the public sector, have been affected, putting Massachusetts at odds with every other state in the country.”

Simply replacing the word “and” with “or” after Section 2 would bring Massachusetts into alignment with the 20-factor IRS test for determining employment versus contractor status, and validate normal and accepted employment practices in many sectors of the economy.

It’s a modest change that would help thousands of legitimate Massachusetts independent contractors who choose to manage and operate their own business and earn a living outside a traditional employer-employee relationship.

Both the non-compete and independent contractor issues underscore the fact that Massachusetts must regulate a 21st century economy with 2st century laws.

Topics: Independent Contractor Law, Massachusetts Legislature, Non-Compete Agreements

State Issues Final Sick-Time Regulations

Posted by Brad MacDougall on Jun 22, 2015 7:21:06 AM

Attorney General Maura Healey on Friday issued final regulations for the state’s earned sick-time law, rules that clarify major employer concerns from the ability to use existing paid-time off benefits to preventing abuse.

health_careThe regulations outline conditions that will allow some companies to comply with the law through their existing time-off plans, as long as those plans provide employees with as much or more sick time as the law, and observe prohibitions on retaliation and interference.

The rules also assert that earned sick-time runs concurrently with certain other federal and state leave laws and that an employee who leaves for longer than four months and hasn’t accrued at least 10 hours of sick time will not be able to carry over any hours when he or she returns.

Employers now have nine days to digest the regulations before the earned sick time law takes effect on July 1.

Associated Industries of Massachusetts, which filed 19 pages of comments to the regulations based on thousands of questions posed by member employers, commended the attorney general for responding to business concerns under a tight timeline.

“The attorney general really was listening to the legitimate concerns of businesspeople who want to comply with this new law. We give her high marks for this,” said Richard C. Lord, President and Chief Executive Officer.

“AIM has worked with employers throughout the regulation and process and is now prepared to help those employers understand the regulations and comply with them.”

AIM will conduct a series of seminars throughout the commonwealth during July that will review specifics of the regulations and look at a model policy and sample documents.

Among the issues of interest to employers in the final regulations:

  • An employer may require documentation for absence that exceeds three consecutive days; that occurs within two weeks of leaving a position; after four unforeseeable absences in a three- month period; or after three unforeseeable absences in a three-month period for employees 17 or under.
  • Employees using earned sick time are compensated at their regular rate of pay, plus any shift differential. Overtime and contributions to health insurance or other benefits are excluded.
  • Employees with multiple rates of pay may be compensated for earned sick time either at the rate that would have applied on the date of absence or at a blended rate calculated on the prior pay period, month, quarter or other period of time.
  • Piecework employees accrue sick time through a reasonable projection of hours worked based on established practices or billing.
  • Earned sick time may not be used as an excuse for being late without an authorized purpose.
  • An employee may not accept a shift assignment with the intention of calling out sick for all or part of the shift.
  • The employer may discipline employees for clear pattern of using earned sick time before or after weekends or holidays.
  • The minimum increment of time for using earned sick time is one hour, though employers may use fractions of an hour for time more than an hour if their payroll system can track such fractions.
  • Employers that provide 40 hours of paid time off in a lump sum at the start of the year do not have to track accruals or allow the carryover of earned sick time from year to year, provided the use of the time is consistent with earned sick time.
  • Employers may opt to delay accruals of earned sick time for employees with a bank of 40 hours until the bank is reduced below 40 hours.
  • Employers that choose to offer time off through a paid time-off or vacation policy that complies with the earned sick time law do not have to track and keep a separate record of earned sick time use.
  • Employers using existing paid time-off policies must ensure that all used time enjoys the same job protection. The employer may have different policies for different groups of employees as long as all employees accrue and use same amount of time under same conditions.

Employers must also determine during the next several days whether they wish to seek the “safe harbor” that will provide them a six-month transition period for complying with the earned sick time law. Companies seeking the safe harbor are required to extend the leave or paid time off to all employees, both full and part-time.

Register for an AIM Earned Sick-Time Seminar

 

 

 

 

 

Topics: Paid Sick Days, Mandated Paid Sick Days, Attorney General Maura Healey

Small Business Gets a Breather on Health Insurance

Posted by Katie Holahan on Jun 17, 2015 11:11:00 AM

Small businesses in Massachusetts won some breathing room yesterday from a provision of federal health care reform that threatens to raise insurance premiums for some companies by more than 50 percent.

health_careThe U.S. Department of Health and Human Services granted Massachusetts a waiver that will allow the commonwealth an additional year to use existing health-insurance rating factors that are otherwise prohibited under the Affordable Care Act (ACA).  Massachusetts 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.

Among the factors to be eliminated in pricing health insurance for companies with fewer than 50 employees are industry, participation rate, group size, intermediary discount and group purchasing cooperatives.

The waiver extends the commonwealth’s current transition period first granted in 2013 and extended in 2014, allowing small-group market insurers to continue using two-thirds of current ratings factors through January 1, 2017, after which the ratings factors will be reduced to one third, before being phased out entirely on January 1, 2018.

The postponement came in response to a May 27 request from Governor Charlie Baker to U.S. Health and Human Services Secretary Silvia Matthews Burwell. The federal government did not respond to a second request by the governor to postpone a separate requirement that Massachusetts expand its small-group health-insurance market next year from companies with 1-50 employees to those with 1-100 employees.

“Protecting small businesses from massive insurance rate hikes is essential to making sure job creators continue to thrive here and I am grateful the Obama administration granted Massachusetts this flexibility,” Baker said.

A study by health insurance companies indicates that the rating changes could raise or lower rates for small companies by up to 57 percent.

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.

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

“The Baker Administration deserves tremendous credit for aggressively seeking a waiver to help small businesses in Massachusetts,” said John Regan, Executive Vice President of Government Affairs at AIM.

“But delay does not equal resolution.  Massachusetts needs a permanent waiver from the rating-factor changes of federal reform because it’s wrong to penalize employers in the one state that led the nation on health-care reform.” 

Massachusetts insured a majority of its residents under healthcare reform in 2006, establishing a state marketplace that merged small group and individual insurance markets. The ratings factors served as a protection for small employers who took on risks from the individual insurance market.

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

AG Updates Safe-Harbor Rules for Sick-Time Law

Posted by Brad MacDougall on Jun 10, 2015 11:17:37 AM

Attorney General Maura Healey today issued updated rules for companies seeking to qualify for the “safe harbor” provision of the new state Earned Sick-Time law by extending paid time off to part-time employees.

SneezeHealey announced on May 17 a six-month transition period for companies with existing paid time-off plans to comply with the new sick-time law, which is scheduled to take effect on July 1. Companies seeking the safe harbor were required to extend the leave or paid time off to all employees, both full-time and part-time, but employers questioned whether part-timers would qualify for the full 30 hours of leave.

The update issued by the attorney general today allows employers to extend earned sick time proportionally to part-time employees and to employees hired after July 1.

Healey also issued the Earned Sick Time notice that employers will be required to post in the workplace. The notice contains several important elements, including the fact that the smallest increment of sick time that employees may take is one hour and that sick time “cannot be used as an excuse to be late for work without advance notice of a proper use.”

“The attorney general’s office has, once again, showed a willingness to listen to the comments of employers who wish to comply in good faith with the Earned Sick-Time law. These updates provide clarity as employers work to align their existing paid time-off plans with the new regulations,” said Richard C. Lord, President and Chief Executive Officer of AIM.

The safe harbor transition allows 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 to be in compliance with the law from July 1 through January 1, 2016. The time off must be job protected.

The provision is intended to address concerns among employers that they will not be able to adjust their payroll systems during the short period between the issuance of final regulations later this month and the July 1 effective date of the law approved by Massachusetts voters.

The updated regulations address the issue of part-time and new employees as follows:

“On and after July 1, 2015, all employees not previously covered by the policy, including part-time employees, new employees, and per diem employees must either accrue paid time off at the same rate of accrual as covered full-time employees; or if the policy provides lump sum allocations, receive a prorated lump sum allocation based on the provision of lump sum paid time off/sick leave to covered full-time employees.

“Such lump sum allocations may:

  • where lump sums of paid time off are provided annually, be halved for employees who receive coverage as of July 1, 2015, and proportionately reduced for employees hired after July 1, 2015; and/or 
  • be proportionate for part-time employees.

The update and poster are available for download on the attorney general’s Earned Sick Time Web site: www.mass.gov/ago/earnedsicktime.

AIM urges employers to read the full text of the safe harbor update and to make comments to elected officials using the AIMVoice button, below. Today is the final day of the Notice and Comment period on the Earned Sick-Time Regulations.

  Take Action  Contact Elected Officials

Topics: Paid Sick Days, Mandated Paid Sick Days, Attorney General Maura Healey

AIM Submits Comments on Sick-Time Regulations

Posted by Brad MacDougall on Jun 8, 2015 9:30:00 AM

Associated Industries of Massachusetts filed 19 pages of comments to the proposed Earned Sick Time regulations Saturday as Attorney General Maura Healey and the business community continued to discuss a clarification of the “safe harbor” provision for companies that wish to extend existing paid time-off programs to part-time workers.

AG.Maura.HealeyHealey announced on May 17 a six-month transition period for companies with existing paid time-off plans to comply with the new sick-time law, which is scheduled to take effect on July 1. The safe harbor transition allowed 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 to be in compliance with the law from July 1 through January 1, 2016.

Companies seeking the safe harbor were required to extend the leave or paid time off to all employees, both full-time and part-time, but employers have questioned whether part-timers would qualify for the full 30 hours of leave.

AIM has proposed that companies qualify for the six-month transition by extending leave proportionally to part-time employees. So if full-timers qualify for 30 hours of leave, half-time employees would earn 15 hours. Discussions are ongoing, but no final agreement had been reached as of the week-end.

AIM’s formal comments seek to clarify the regulations employers will have to follow under the new law and head off an expected onslaught of lawsuits growing out of inconsistencies in the rules.

“While the safe harbor provision does provide relief, it does not prevent creative attorneys from filing lawsuits.  We are concerned that after July 1 many businesses will be subjected to lawsuits from aggressive plaintiffs’ attorneys seeking to leverage the commonwealth’s treble damages statute that provides for attorney’s fees under the law,” the comments state.

“AIM believes that like the state’s healthcare and data security laws, the earned sick time law will take time, effort and money to implement properly and responsibly.”

AIM maintains in its comments that many of the proposed earned sick-time regulations are not supported by the statute. 

Specific recommendations include:

  • Change the one-year break-in-service provision to four months to align with federal health care reform.
  • Require employees to explicitly tell employers whether the time off they seek is earned sick time.
  • Allow employers to discipline employees who fail to comply with reasonable documentation requirements.
  • Allow employers to terminate workers who have engaged in fraud and abuse of the earned sick-time law.
  • Count only hours worked in Massachusetts toward the accrual of earned sick time.

AIM’s comments were distilled from thousands of responses and questions posed by employers across Massachusetts. More than 700 companies participated in a recent AIM Webinar explaining the proposed regulations.

Attorney General Healey is expected to issue final regulations later this month.

Take Action  Contact Elected Officials

 

VoterVoice Call to Action: https://www.votervoice.net/AIM/campaigns/40134/respond

Topics: Paid Sick Days, Mandated Paid Sick Days, Attorney General Maura Healey

AIM Honors Nine with Centennial Awards

Posted by Christopher Geehern on Jun 4, 2015 2:50:00 PM

A manufacturing company reborn in the middle of the Great Recession, a groundbreaking research partnership between Raytheon and UMass Lowell, and candle entrepreneur Michael Kittredge are among nine recipients of Next Century awards to be presented at three Associated Industries of Massachusetts regional centennial celebrations this month.

saab-innovation-center-5328The Next Century awards recognize individuals, companies and other organizations for seminal contributions to the Massachusetts economy and the well-being of its citizens. Presentations will take place during late afternoon receptions on June 11 at the Crane Model Farm in Dalton; June 15 at the Wood Museum of Springfield History in Springfield; and June 17 at the Marc and Elisia Saab Emerging Technologies and Innovation Center at UMass Lowell.

“All nine recipients exemplify the transformative and lasting power of economic opportunity. Their vision and leadership have allowed Massachusetts residents to work, support families and build lives for themselves while making the commonwealth a wonderful place to live,” said Richard C. Lord, President and Chief Executive Officer of AIM.

The Dalton event will honor Onyx Speciality Papers Inc., Berkshire Health Systems and SABIC Innovative Plastics. Employers in Springfield will honor Kittredge, MassMutual Financial Group and the job-training programs of the Hampden County Sheriff’s Department. The Lowell event will recognize the Raytheon-UMass Lowell Research Institute, Mayor Daniel Rivera of Lawrence and developer and philanthropist Salvatore Lupoli.

Here are summaries of each recipient:

Dalton

Onyx Specialty Papers gave new life to a 200-year-old business in 2009 when it acquired the assets of MeadWestvaco’s specialty paper division in South Lee. It was an extraordinary act of courage in the face of the Great Recession and the ongoing cost and regulatory challenges of manufacturing products in Massachusetts. It is an act that has preserved the livelihoods of 152 manufacturing workers, scientists and engineers who now supply materials for countertops, laminate floors, furniture, filters, graphic arts and even automotive transmissions. 

Berkshire Health Systems is among a vanguard of community hospitals developing new models of patient care and financial sustainability in a turbulent health-care market. The most dramatic example of the company’s innovative approach came when it stepped in and invested more than $6 million to provide medical services to people in northern Berkshire County in the wake of the closing of North Adams Hospital. BHS has also invested in the recruitment of new physicians to meet the demand from patients who formerly sought treatment from doctors in private practice.

SABIC Innovative Plastics, a world leader in providing thermoplastic solutions, sets a unique standard for balancing success in the global marketplace with addressing the needs of its hometown. Founded with the acquisition of GE Plastics in 2007, SABIC employs 9,000 people in 35 countries making products for the automotive, electronics, transportation, building & construction, and healthcare industries. At the same time, SABIC employees volunteer their time in the Berkshires and elsewhere through programs that support community initiatives focused on education and environmental sustainability.

Springfield

Holyoke native Michael Kittredge is the Founder of Yankee Candle Company in South Deerfield, which he sold in 1998, and Co-Founder of Kringle Candle Company of Bernardston. From a home-made candle created at age 16 as a Christmas present for his mother, Kittredge created businesses that have entertained customers and employed hundreds of people across a unique blend of retail, manufacturing, distribution, tourism and hospitality operations.

Perhaps no company has done more for Springfield and western Massachusetts over a longer period of time while forging more wide-reaching business success than MassMutual. From jump-starting the rebirth of downtown Springfield with the development of Baystate West in 1971 to the formation last year of a $100 million corporate venture capital firm, MassMutual has been involved in virtually every substantive economic-development initiative in western Massachusetts.

At a time when the primary challenge facing Massachusetts employers is finding qualified workers for their businesses, the Hampden County Sheriff’s Department last year placed 506 formerly incarcerated people into jobs. Sheriff Michael Ashe and his staff have created a national model for employment support that includes vocational training, education, counseling, job-readiness skills, job search and job retention that has secured employment for more than 10,000 people since 1989.

Lowell

The Raytheon–UMass Lowell Research Institute (RURI), established in 2014, provides a blueprint for mutually beneficial research collaboration between Massachusetts companies and the commonwealth’s colleges and universities. RURI is a joint research facility focused on the advancement of innovative technologies, including flexible and printed electronics. The institute will serve as a launchpad for collaboration and learning among UMass Lowell faculty and students and Raytheon employees. 

The RURI award will be accepted by founders and co-directors Dr. Christopher McCarroll of Raytheon and UMass Lowell Prof. Craig Armiento, Ph.D., a faculty member in electrical and computer engineering in the university’s Francis College of Engineering.

Daniel Rivera, elected as a reformer to lead Lawrence out of a period of political instability, is living up to the “Mayor and CEO” titles that appear on his business card. Rivera has made City Hall a partner in creating economic opportunity for the citizens of Lawrence with a clearly defined plan to cut crime, oust drug dealers, increase jobs, attract new businesses to the former textile city, and get thousands of Lawrence residents who do not speak English to enroll in classes.

Entrepreneur Salvatore Lupoli has been a key ally of Mayor Rivera in changing the face of Lawrence “one job at a time.” Lupoli is an American success story, having transformed a single pizza restaurant founded in 1990 into a retail franchise and wholesale operation with more than 40 businesses serving New England, California, Arizona and India. He has also played a key role in the revitalization of Lawrence by turning more than 3.6 million square feet of mill space into the thriving commercial, retail and manufacturing center, Riverwalk Properties. Lupoli employs more than 1,000 people and has become a major benefactor of community organizations ranging from veterans’ groups to anti-hunger initiatives.

AIM will honor six more individuals and companies at two additional regional celebrations in September – September 16 at the Hanover Theater in Worcester and September 21 at Gillette Stadium in Foxboro. All the regional celebrations run from 4:30-6:30 p.m. (Lowell begins at 4 p.m.) and are free, though pre-registration is required.

 

Register for a regional  centennial celebration

Topics: Associated Industries of Massachusetts, AIM Centennial

Smart Phones, Remote Work Raise Pay Issues

Posted by Tom Jones on Jun 3, 2015 10:47:21 AM

Smart phones, tablets and wi-fi are blurring the lines between work and non-work time, especially for non-exempt employees.  The question facing employers is whether or not to pay employees for time outside of the normal work day for periods spent on their smart phones, especially if it triggers overtime.

SmartPhoneTabletThere is currently no national standard.  While some federal courts have weighed in, the U.S. Supreme Court has not.

The issue has caught the attention of the U.S. Department of Labor (DOL), which has announced plans to collect information on how the use of smartphones impacts hours worked under the Fair Labor Standards Act (FLSA). The DOL announced that it will seek input by publishing a request for information in August.

DOL states that there is no formal rulemaking proposed at this stage, but the gathering of information such as this is often the first step toward drafting a rule.

Technology has changed how, where and when work is done.

The FLSA generally mandates that employers pay non-exempt workers for all hours worked, and overtime for all hours worked in excess of 40 hours in a work week. Time spent working outside the office on mobile devices and computers by non-exempt employees complicates working-time determinations made by employers and could ultimately affect overtime determinations.

While some employers already have policies in place regarding off-hours use of electronic devices by overtime-eligible employees, DOL’s decision to open up this door suggests that any one particular policy may be subject to additional scrutiny in the future.

Now is the time to think about your current policy (if you have one) and your current practices regarding electronic devices:

  • Adopt controls to prevent non-exempt employees from accessing your IT network remotely when they are not working; or monitor the activity of those employees who do access the network.
  • Adopt a clear policy about unauthorized work and overtime. Be prepared to enforce it through your disciplinary policy
  • Remind employees of the relevant policies by updating and reissuing them. Require employees acknowledge receipt of the policies. You might also consider providing employees with training on the topic.
  • Educate managers about the issue of non-exempt employees working remotely. Be sure the managers know your company policy with regard to including information on timesheets. They should also be alert to things such as employees responding to work sourced email(s) over the weekend or turning in assignments first thing Monday morning.

If this issue is already a problem, now is the time to address them:

  • Limit or deny the email or remote access privileges of non-exempt employees who violate policies.
  • Suspend telecommuting privileges for those not in compliance with your policy.
  • Revoke any employer-owned devices if they are being used to perform unauthorized work.

If you are concerned enough about this to comment to the DOL during its fact-finding phase, remember that the opportunity is likely to happen this August.

If you have any questions about this or any other HR related matter, please contact the AIM Hotline at 1-800-470-6277.

Topics: Employment Law, Technology, Human Resources

Loss of Economic Momentum Gives Employers Pause

Posted by Christopher Geehern on Jun 2, 2015 8:16:00 AM

Two reports issued today by Associated Industries of Massachusetts (AIM) suggest that employers have grown wary of an economic recovery that appears to have lost momentum during the first half of 2015.

BCI.May.2015The big question, according to analysts, is how much has momentum slowed and for how long?

The monthly AIM Business Confidence Index fell for a second consecutive month in May after reaching a 10-year high in March. The Index lost 1.8 points to 57.3 on a 100-point scale, still comfortably in positive territory but showing moderating expectations for growth during the remainder of the year.

Meanwhile, the annual AIM General Wage Survey Report found that for the third consecutive year, a majority of AIM-member companies have targeted merit and general increase spending at 3 percent for 2015. Economists say the modest wage gains reflect the fact that many organizations have decided to keep pace with an expanding economy by boosting productivity and capital investment rather than payrolls.

Both reports come four days after the government announced that the US economy contracted 0.7 percent during the first three months of the year. The economic numbers have prompted the Federal Reserve to postpone an interest-rate hike that was widely expected in June.

Raymond G. Torto, Chair of the AIM Board of Economic Advisors (BEA) that produces the Business Confidence Index, said employer optimism is up 2.5 points from last May, “but coming off an upward surge from August through March, business confidence seems to have lost momentum.”

“The Index performed well during the first quarter of this year, but now it is weakening even as growth appears to be picking up,” said Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.   

He noted that economists’ forecasts for expansion in 2015 have moderated. “Our survey does reflect lower expectations for the six months ahead,” he said. “We also see lagging confidence among manufacturers, whose exports are hurt by the strong dollar, and among mid-size companies.” 

AIM’s Business Confidence Index has been issued monthly since July 1991 under the oversight of the Board of Economic Advisors. Presented on a 100-point scale on which 50 is neutral, the Index attained a historical high of 68.5 in 1997 and 1998; its all-time low was 33.3 in February 2009. 

The May confidence report showed employer assessment of current business conditions down nine-tenths at 57.4, while their expectations for the next six months, lost 2.8 points to 57.1.

One bright spot came in the Employment Index, which reached its highest level since September 2005. Employment expectations for the next six months were particularly strong, with 37 percent of responding employers planning to add staff, while 14 percent expect reductions.

The General Wage Survey report, based on responses from several hundred Massachusetts employers, showed that overall merit increase budgets for 2015 average 2.69 percent when companies planning a zero percent increase are included. That figure is down from the 2.71 percent posted in 2014; higher than the 2.53 percent in 2013, 2.55 percent in 2012 and 2.4 percent in 2011.  The percentage of companies providing no wage increases dropped in half from 14 percent in 2013 to 7 percent this year.

Those numbers are consistent with national compensation surveys that appear to agree that wages generally have not risen as predictably as they have in previous recoveries.

But Andre Mayer, Senior Advisor at AIM, says those aggregate numbers mask growing wage acceleration in many of the technical and managerial fields in which Massachusetts is strong.

“Even as the overall averages show only modest increases in compensation, the competition for experienced incumbent workers with high-demand skills is heating up. Employers are not only becoming more willing to hire, they are becoming more willing to pay a premium for the skills they need,” Mayer said.

Topics: Compensation, AIM Business Confidence Index, Massachusetts economy

Legislature Should Rein in Solar Subsidies

Posted by Robert Rio on Jun 1, 2015 3:08:08 PM

In the not-to-distant future, up to 15 percent of your electric bill’s distribution charge could be used to pay for the solar panels on your neighbor’s house.

solarpanels.smallThat’s why a Task Force created by the Massachusetts Legislature is recommending changes to a Bay State solar program that is growing exponentially faster than similar initiatives in other states. Associated Industries of Massachusetts served on the so-called Net Metering Task Force and will today urge lawmakers at a public hearing to use the report as a roadmap for a significant overhaul. 

The outcome of the debate over solar energy subsidies has tremendous implications for the economic future of the commonwealth. The current program, left unchecked, will add an estimated $4 billion between now and 2020 to the electric bills of employers and citizens who already pay some of the highest energy costs in the nation.

While it is understandable that solar energy installers and even some participants want to keep the status quo, virtually all the savings (except for wholesale fuel costs) attributable to solar installations are basically a transfer from non-participating ratepayers to those who have solar, increasing costs for those who may not be able to take advantage of solar programs. The viability of the program depends on this inequity. If everyone took advantage of solar programs, there would be no ratepayers left to pay the cross-subsidy.

Additionally, as solar programs increase, there are fewer customers to pay the cost associated with maintaining the distribution and transmission system, which is still required to be ready willing and able to serve the customer when the sun is not shining. Solar customers also fail to pay their fair share of social costs embedded in distribution rates, causing a massive shift in who pays for programs that serve low-income customers.

Here are some important points from the Task Force report that should serve as a roadmap for any net metering legislation:

  • Reducing the cost of solar programs and electricity should be the priority: Massachusetts ratepayers are not only spending an enormous amount of money for solar power, we are spending at rates double that of any other state, including some nearby. Bring unsustainable costs in line with other state programs.
  • Competition in solar procurement will drive down costs: The current method of purchasing solar does not rely on the competitive market, which drives costs lower and allows ratepayers to take advantage of the declining costs of solar installations. For example, recent land-based wind contracts that were procured competitively under Section 83 of the Green Communities Act have lowered the cost of energy because competition reduced the cost of these projects to below wholesale electric rates. The same can be done in the solar market.
  • Those who are still “Connected” to the grid must pay their fair share of maintaining the grid that they in fact rely upon: The notion that those who use solar power are not using the electric grid is a myth. Even those who use solar for all their electricity needs rely on the electric grid to supply power when the sun isn’t shining. The cost of maintaining the grid, and backup power for the solar users, is not currently paid by the solar user and this cost is basically added to everyone else’s bill. In addition, those who net meter to zero (and those who receive rebates), are not paying any social costs embedded in rates, including low-income reimbursement, energy efficiency, and several other programs.
  • There should be no grandfathering of the current program when a new program is enacted: Any promises made about the sustainability of the current rebates and financial incentives were made by salespeople and not by the legislature or DPU.  There was never any guarantee given to solar users that the current program would continue to be as lucrative forever. Therefore, the current participants should immediately be brought under any new system.
  • The current net metering cap should not be increased until a new solar program is developed that is cost-effective and sustainable: The current cap has been hit in some utility territories. This cap was enacted by the legislature for the simple reason that is was needed to contain costs. Therefore it should not be raised until a new program is enacted. Additionally, contrary to reports of the demise of the solar industry, there is still some room in the caps in some territories and small solar systems are not under any cap. Raising the cap without reform will imbed millions of dollars into the long-term rates of ratepayers and make the situation worse. 

The Net Metering Task Force Report contains clear data that shows the current system is working best for solar developers and investors at the expense of business (and residential customers) trying to build and expand their businesses without the benefit of overly generous cross-subsidies.

 

Topics: Energy, Subsidy

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