The formal portion of the 2015-2016 session of the Massachusetts Legislature produced landmark laws governing energy, economic development and pay equity. House Speaker Robert DeLeo recently sat down with AIM Executive Vice President John Regan to talk about the sesssion and what the results will mean for employers.
An article in yesterday’s Boston Globe, Business lobby holds new sway on Beacon Hill, accurately reports that Associated Industries of Massachusetts exerts unique influence on Beacon Hill on behalf of employers.
We do. That’s why your company is a member.
Unfortunately, the article also distorts AIM’s position on an important piece of legislation - the Pregnant Workers Fairness Act – and contains a glaring factual error. I feel it is important to set the record straight.
The article reports that AIM opposed The Pregnant Workers Fairness Act during the 2015-2016 legislative session. But the article does not tell you that our opposition reflected legitimate concern among employers that the legislation duplicates existing law and provides an applicant or employee with the power to reject multiple and reasonable offers of accommodation by an employer.
The issue is similar to the recent debate over wage equity, in which AIM initially opposed a flawed bill meant to accomplish a goal we all supported. Far from exercising “veto power” over the House of Representatives, as one senator asserted to the Globe, AIM was able to work with House Speaker Robert DeLeo and the attorney general to develop an acceptable piece of legislation that we were ultimately proud to support and that Governor Charlie Baker signed.
The Globe article fails to mention that AIM has signaled the Legislature that we are willing to enter into the same type of negotiations on the Pregnant Workers Fairness Act. AIM executives told reporter Frank Phillips on several occasions that the association supports fair treatment of pregnant women and is open to discussions to eliminate provisions of the bill that would place an undue burden on employers.
The article also inaccurately reports that Cape Air, the business owned by retiring Senator Dan Wolf, D-Harwich, is a member of Associated Industries of Massachusetts. For the record, Cape Air has not been a member of AIM since 2003.
As member employers you should be proud of that AIM represents your interests with unparalleled skill and integrity. You should also acknowledge that the Massachusetts House of Representatives is developing workable legislation for the people of Massachusetts by working collaboratively with the business community.
The bottom line of the Globe article is that no organization is more prominent in public policy debates that AIM.
Please contact me if you have any questions about the article or AIM’s positions.
Associated Industries of Massachusetts (AIM) today released its 2015-2016 Legislative Scorecardd, the most widely read report on the voting record of Massachusetts legislators on issues important to employers. AIM releases the Legislative Scorecard at the end of each two-year session to ensure that members know legislators’ records on key economic and public-policy issues, and to recognize lawmakers who understand the importance of a vibrant economy for all residents.
The 2015-2016 legislative session was a tale of two chambers. While the House of Representatives and Speaker Robert DeLeo successfully forged consensus on important measures such as wage equity and energy, the Senate hewed to a more progressive, ideological approach that produced a steady stream of bills with the potential to harm the Massachusetts economy. The divergent approaches are reflected in the Legislative Scorecard results.
Virtually every member of the House of Representatives earned grades of 50 percent or higher and 126 reps ended the session at 75 percent or better. The ratings were based on a dozen roll-call votes dealing with issues ranging from economic development to restricting the use of non-compete agreements.
In the Senate, meanwhile, only five of 40 members managed grades above 50 percent and a staggering 15 Senators posted scores of 18 percent. The highest score in the Senate belonged to Senator Don Humason of Westfield at 59 percent.
The Senate scores were based upon many of the same issues debated by the House, as well as additional votes on so-called wage theft and efforts to modify the commonwealth’s punitive treble damages law. Two key Senate votes – on energy and non-compete agreements – were not included because they were conducted as voice votes.
The Legislative Scorecard selects votes that reflect the objectives of The Blueprint for the Next Century, AIM’s long-term plan for economic prosperity in Massachusetts. The plan maintains that only a vibrant, private-sector economy creates opportunity that binds the social, governmental, and economic foundations of our commonwealth.
The Blueprint contains four specific recommendations against which AIM measures public policy issues:
- Develop the best system in the world for educating and training workers with the skills needed to allow Massachusetts companies to succeed in a rapidly changing global economy.
- Support business formation and expansion by creating a uniformly competitive economic structure across all industries, geographic regions and populations, rather than picking winners and losers.
- Establish a world-class state regulatory system that ensures the health and welfare of society in a manner that meets the highest standards of efficiency, predictability, transparency and responsiveness.
- Moderate the immense long-term burden that health care and energy costs place on business growth.
The Massachusetts House of Representatives voted 149-0 Thursday to approve compromise legislation governing the use of non-compete agreements.
Associated Industries of Massachusetts has opposed efforts to ban or limit the use of non-competes, but has also engaged in productive discussions with House Speaker Robert DeLeo on the issue.
“AIM recognizes and appreciates the approach that Speaker DeLeo has taken in the debate over non-compete agreements,” said John Regan, Executive Vice President of Government Affairs at AIM.
“The speaker recognizes the need to protect business interests at a time when non-competes are a vital part of protecting investments and ideas created by employers of all sizes and from all industries. As the speaker has noted in the past, Massachusetts cannot be an ‘invented here and manufactured elsewhere’ commonwealth.”
The House proposal makes three positive changes from legislation originally advanced by the Legislature’s Joint Committee on Labor & Workforce Development. The changes address some of the major concerns expressed by AIM and other members of the business community in a June 20 meeting with Speaker DeLeo:
- Garden Leave: A provision that would have required employers to pay workers half their salary during the restricted period of a non-compete agreement has been modified to recognize “other mutually-agreed upon consideration between the employer and the employee.” That means companies that compensate employees at the time they sign non-competes would not have to pay them again during the restricted period. While AIM would prefer to eliminate the “garden leave” provision entirely, the revision provides some flexibility to employers.
- Amending contracts: The compromise legislation would allow courts to reform or alter non-compete contracts to ensure that both parties are treated fairly. Previous language would have forced a court to invalidate a contract in full.
- Effective date: The legislation would provide time for businesses to update contracts by moving the effective date from July 1 to October 1, 2016. As previously proposed, the law would not apply retroactively to contracts signed as of October 1, 2016.
AIM has expressed support for several provisions of the revised bill that clearly define the conditions under which non-competes may be used:
- Non-compete agreements could be only one year in duration.
- Those subject to non-compete agreements would have to be given prior notice of the need to sign the agreement, as well as the opportunity to consult with legal counsel.
- The non-compete would extend to a second year should an employee unlawfully take property belonging to the employer.
Amid these improvements, concerns remain. AIM urges the House of Representative to consider several changes:
- Stock options: Make stock-option offerings exempt from being directly tied to non-compete agreements since such grants are used for attracting and retaining talent.
- Exemptions: Change the criteria under which workers would be exempt from non-competes from the Fair Labor Standards Act to a standard that relies on the minimum wage.
- Garden Leave: Make technical changes to underscore the fact that non-compete agreements are often part of broader standardized national or international compensation plans.
- Choice of Law Provision: Strike language that sets arbitrary rules for selecting the court where a claim may be brought.
- Garden Leave exemption: Create language to allow a non-compete to remain enforceable when an employee receives a severance payment or other long-term compensation.
- Independent Contractors: Strike language that defines employee to include independent contractors within the definition of full-time employee.
- Damages: Strike language that would preclude an employer from recouping damages or costs associated with a stolen “sales list” if an employee were to leave voluntarily.
AIM continues to maintain that there is no evidence that the use of non-compete agreements harms Massachusetts’ position as as a globally recognized leader in innovation. In fact, Securities and Exchange Commission (SEC) filings indicate that the well-heeled venture capitalists pushing to limit non-competes use such agreements themselves.
Employers believe selective use of non-competes protects the significant investments that allow their companies to be global leaders in their industries and to create jobs in the commonwealth. The compromise legislation begins to recognize that Massachusetts employers need flexibility and legal options to protect intellectual property.
AIM looks forward to working with members of the Legislature to address the changes that remain to be made.
Employers seeking to learn more about the non-compete issue may contact me at email@example.com.
House Speaker Robert DeLeo touched on energy costs, work force training and economic development during his keynote address to the AIM annual meeting on May 13. DeLeo said that the House of Representatives shares with AIM a commitment to ensure that the economic growth buoying the Boston area spreads through the commonwealth.
Here is a video of the speaker's full address:
The Massachusetts House of Representatives shares with Associated Industries of Massachusetts a commitment to ensure that the economic growth buoying the Boston area spreads through the commonwealth, House Speaker Robert A. DeLeo told the AIM annual meeting today.
“For the past two years, extending the circle of economic prosperity from Boston to each corner of the commonwealth has been a chief priority of the House. I’m proud to say that through economic development bills, trips around the state, and a recently launched initiative called the Bay State Business Link, we are making gains,” DeLeo told more than 750 executives gathered at the Westin Boston Waterfront Hotel.
DeLeo noted that he last keynoted the AIM annual meeting during the height of the recession in 2009.
“I’m proud to say that in the past seven years we have overcome adversity and set a foundation for sustainable recovery,” he said.
“In the House, we embrace our legacy of creating workable, practical solutions. Our goal is to create sustainable legislation that will result in positive long-term consequences. From workforce training; to economic development bills that focus on diverse regions and industries; to education; to our nationally-heralded gun safety legislation: we are known for pairing bold ideas with commitment to collaboration.”
DeLeo’s remarks followed the presentation of the inaugural AIM Vision Awards for contributions to the Massachusetts economy to General Electric Company of Boston, Nuance Communications of Burlington and noted brain researcher Dr. Ann McKee of Boston University. AIM also presented the John Gould Education and Work Force Development Award to Morgan Memorial Goodwill Industries of Massachusetts.
AIM Board Chairman Daniel Kenary announced in his annual remarks that the AIM Board of Directors has approved a restructuring that will allow AIM’s human resources operation to accelerate its growth, while the larger organization recommits itself to being the best public policy advocacy group in the nation.
AIM HR Solutions, formerly known as the Employers Resource Group, will become its own business center with the goal of building on annual revenues of $2.1 million. AIM HR Solutions will help employers wrestle with the complexity of managing a work force and comply with an ever- growing maze of employment laws.
“The change is intended to allow our managers to push full throttle on two business units that are already remarkably successful. There isn’t an association anywhere in the world that would not give its right arm to have these two businesses. Your Board of Directors is excited about the possibilities this change will create,” said Kenary, Co-Founder and Chief Executive Officer of The Harpoon Brewery.
Kenary also suggested that AIM is at a crossroads born of an increasingly volatile political environment that is challenging employers to articulate a positive and compelling vision for the role they play in the larger society. He called for employers to adopt an “entrepreneurial populism” under which they engage with the political process in their home communities.
“The late House Speaker Tip O’Neill’s maxim that ‘all politics is local’ has never been truer that it is today. And if all politics is local, the employer community represents a sleeping giant with enormous potential to drive sound public policy from the bottom up,” Kenary said.
Massachusetts lawmakers last week imposed an $8 billion tax on electric ratepayers and put the money into the pockets of solar energy developers.
The state Legislature approved a bill that does nothing to reform the commonwealth’s bloated solar-energy subsidy program. The result: businesses and homeowners will continue to foot the bill for twice as much in solar giveaways as residents of other states.
Governor Charlie Baker said Friday that he will sign the measure.
And big solar isn’t done. Even before the ink dries on the current bill, solar energy advocates are rallying to raise the cap again before the end of the legislative session, continuing what appears to be a never-ending demand for government-mandated support.
“AIM supports the development of solar energy and takes pride in the fact that many of its 4,500 member employers have installed solar at their plants and offices,” said Robert Rio, Vice President of Government Affairs at AIM.
“But this bill represents lawmakers turning their backs on ratepayers to perpetuate an ideologically based energy policy.”
The solar bill that emerged from a legislative conference committee on Tuesday would raise the cap on net metering – the process by which solar developers sell excess electricity back to the power grid – by 60 percent for private projects and 75 percent for public projects. The primary reform contained in the measure would lower the net metering credit to 60 percent of the retail rate, but that reduction would not apply to facilities owned by municipalities and government entities.
“Municipalities and other government entities will still receive retail rates for net metering – a sad case of ‘taking care of your own’ while others pay,’ ” AIM said in a letter to the Legislature this morning.
The proposal will add $8 billion to the energy bills of Massachusetts consumers during the next 10 years - 2.0 cents/kilowatt hour for residential customers and 1.6 cents/kWh for Commercial and Industrial customers.
AIM supports reform of solar subsidies because Massachusetts employers already pay some of the highest rates for electricity in the country. The legislature with the current bill has shown neither the will nor the inclination to say no to unnecessary subsidies, even when other states have reformed their programs in the face of falling costs for solar installations.
Solar subsidy advocates are already planning to seek additional increases in the program.
"With the bill's 3 percent increase to the program cap, we expect to address net metering again next year in order to avoid endangering solar jobs yet again,” said Sean Garren of VoteSolar.
AIM urges the state Senate not to pass the conference report and asked Governor Charlie Baker to veto it.
Balance the budget with no new taxes or fees.
Extend economic growth beyond Greater Boston.
Reduce unnecessary regulatory barriers.
Stabilize energy costs.
Develop an educated work force.
House Speaker Robert DeLeo checked off all the important issues yesterday in outlining a clear and well-reasoned strategy to improve the Massachusetts economy. Speaking to House members at the start of the 2015-2016 session, DeLeo echoed many of the recommendations of AIM’s new Blueprint for the Next Century long-term plan to expand economic opportunity for the citizens of the commonwealth.
The Democratic speaker’s approach is also remarkably consistent with Republican Governor Charlie Baker’s agenda on opposition to new taxes and support for streamlining burdensome regulations. Such agreement between two of the commonwealth’s three top political leaders, coupled with Senate President Stanley Rosenberg’s reputation for pragmatism on economic issues, suggest a predictable environment for employers in the next several years.
“In the coming session, we will reaffirm our commitment to economic success. We will look to support the innovative programs that are spurring growth in Boston and beyond,” DeLeo told House members.
“Even as we face unforeseen fiscal circumstances, we will find inventive ways to extend our economic success to every sector of the commonwealth. I’ve seen what many of these regions have to offer: the pockets of innovation, the entrepreneurs, the people who make Massachusetts work.”
John Regan, Executive Vice President of Government Affairs at Associated Industries of Massachusetts, said DeLeo’s approach reflects growing consensus among policymakers for the need to create a uniformly positive business climate across all economic sectors and in all regions of the state.
“The cornerstone of the relationship between employers and government is the ability of policymakers to manage the budget, control costs and provide services efficiently. Speaker DeLeo is clearly committed to doing that in way that will then allow the commonwealth to address some of its long-term economic challenges,” Regan said.
The Massachusetts constitution requires legislators and the governor to maintain a balanced budget. Governor Deval Patrick and state lawmakers managed to balance the books during the Great Recession and recovery with two tax increases – a sales tax increase from 5 to 6.25 percent in 2009 and a $500 million jump in the gasoline and other taxes in 2013 – along with a multi-year drop in the corporate excise tax.
DeLeo said tax-and-fee increases harm working families.
“We know many families’ budgets are stressed to the limit. We will not add to that burden. For that reason, the budget plan that comes out of the Committee on Ways and Means will contain no new taxes and fees,” the speaker said.
DeLeo made his comments on the same day that the House approved legislation to fill a $768 million gap in the current fiscal year with a mix of redirected revenues and spending cuts. The legislation establishes a corporate tax amnesty program and would redirect capital gains tax receipts into the general fund while trimming spending across state government.
How did your neighbor afford to install the array of solar panels now sitting on his roof?
Simple - you paid for some of it.
And you may soon pay more for it because of a back-room deal hatched by solar panel providers and other special interests on Beacon Hill.
The House Ways and Means Committee is debating a proposed revamp of the state’s expensive solar subsidy program that would add an estimated $1.5 billion to the electric bills of employers and consumers during the next 15 years.
The bill was developed behind closed doors by state officials and organizations with a vested interest in keeping the program as lucrative as possible, including solar and clean-energy lobbyists and at least one solar installation company. Associated Industries of Massachusetts (AIM) and other advocates for electric ratepayers were excluded.
AIM enthusiastically supports the use of solar power in the Bay State, but opposes the current proposal to lift the existing cap on the subsidy, or net metering, program in specific utility territories. The rate shock caused by the measure will place a damper on the economy by increasing costs for the commercial and industrial ratepayers who currently foot 40 percent of all electricity costs in Massachusetts.
The association, in a letter sent last week to the Ways and Means Committee, urges the panel to direct the Massachusetts Department of Energy Resources (DOER) to initiate a new and transparent discussion of solar net metering with realistic timelines, realistic goals and a multitude of options, including a cap on the yearly cost of the program. The objective should be to advance renewable power while simultaneously reducing overly generous subsidies to this industry.
Net metering allows customers to receive credits to their electric bill for generating solar power.
“Net metering benefits only those who are able to install solar panels on their roofs or have some access to community solar programs. It largely excludes low-income people, renters and small businesses that do not have the appropriate land area for solar,” said John Regan, Executive Vice President of Government Affairs at AIM.
“The result is that the ‘have-nots’ will subsidize those who have the means to install these panels, a wealth transfer amounting to billions of dollars. As the program gets larger, the subsidies get larger, creating a never-ending escalation of costs to those left on the system still paying the bill
The bill would also replace a second subsidy program that establishes a market for solar energy certificates sold to utilities so they meet their renewable energy mandates, with an electricity tariff program designed to get as much as 1,600 megawatts of solar developments built in the state.
AIM’s objections to the current bill include:
- The troubling, non-collaborative approach that deliberately excluded interested parties from the development of the new draft.
- Lack of disclosure concerning the cost of the program to ratepayers.
- Language that eliminates oversight by the Legislature.
- Unclear need for the legislation.
The secretive negotiations that produced the current bill have made it nearly impossible for AIM and other organizations representing the interests of ratepayers to estimate the final cost of the expanded subsidy program. Negotiators refused to discuss the cost of the program at an informational meeting on June 11 in Boston and dismissed a question from the audience on this topic as irrelevant.
And financial data is not the only evidence missing from the proposal. The solar subsidy has often been touted as necessary to reach greenhouse gas-reduction goals, but there was no indication at the informational meeting or in the supporting documents as to the amount of greenhouse gases that would be reduced by this program or the cost per ton of greenhouse gases reduced.
“A rush to pass this legislation will touch off a firestorm of criticism from a business community forced to pick up the tab for a poorly conceived and economically destructive program. The Legislature is being handed in the hectic final days of the session a costly measure that will set energy policy for decades to come with no protections for ratepayers,” AIM said in its letter to the committee.
The Massachusetts House of Representatives last night joined the state Senate in passing legislation to freeze Unemployment Insurance rates and avert a $500 million tax increase on employers that took effect on January 1.
Issue closed right? Well, not so much. The two branches disagree about how to wrap that freeze into a broader set of reforms to the state’s costly UI system, so employers still find themselves staring down the barrel of a 33 percent jump in UI taxes.
Lawmakers will eventually work out their differences in a conference committee, but that process is complicated because House and Senate have passed different bills dealing with UI reform and a minimum-wage increase.
“The priority for the Legislature must be to freeze Unemployment Insurance rates for 2014 before employers pay first-quarter UI taxes. Otherwise, the economy will be saddled with an unnecessary tax increase at a time when the fund used to pay jobless benefits is financially stable,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.
The House voted 123-24 last night to pass a bill that would freeze UI rates, introduce modest reforms of the Unemployment Insurance system, and raise the Massachusetts minimum wage from the current $8 per hour to $10.50 per hour over three years. The Senate passed legislation in February to increase the minimum wage to $11 per hour over three years and then link it to the rate of inflation.
The House UI reform package would:
- Expand the wage base upon which UI benefits are calculated from $14,000 to $15,000 in 2015.
- Incorporate an expanded rate table previously passed by the Senate that would make rates more dependent on the hiring and firing record of individual companies. Rates for 2015, 2016 and 2017 would be frozen at Schedule C on the new table.
- Retain the current one-year window for determining the experience rating of employers.
- Prohibit self-employed “persons of influence” from laying themselves off on a seasonal basis and collecting unemployment benefits.
Neither the House nor the Senate bills include provisions supported by AIM to reduce the maximum duration of benefit weeks from 30 to 26 or increase the time people must work before collecting benefits. AIM opposes increases to the state minimum wage.
Lord called the House vote a “step in the right direction” toward addressing UI rates that are among the highest in the nation.
“We are gratified that both the House and Senate have passed Unemployment Insurance reform. Employers did not get everything they wanted, but we look forward to continuing the conversation with Beacon Hill lawmakers in the months ahead,” Lord said.