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AIM Backs Reasoned, Long-Term Approach to Transportation

Posted by Brooke Thomson on Oct 30, 2019 7:08:11 AM

Virtually everyone in Massachusetts agrees that the commonwealth must repair, update and rethink its transportation system.

trafficsmallJust ask employers in metropolitan Boston where workers navigate daily reliability issues on the MBTA or persistent congestion on the Southeast Expressway. Or manufacturing companies in the Berkshires that struggle to ship products over back roads to the Turnpike. Or restaurants on the Cape that await customers locked in multi-mile backups over the Sagamore or Bourne bridges.

Improving the complex Massachusetts transportation system will require patience, prudence and compromise to reach a solution that lays the foundation for long-term economic growth. The 3,500 members of Associated Industries of Massachusetts know as business people that sorting out the financial, logistical and operational elements of transportation reform will take years of debate and continued analysis.

AIM supports a reasoned, long-term approach built around Governor Charlie Baker’s $18 billion transportation bond bill now pending in the state Legislature. That bond bill acknowledges what Transportation Secretary Stephanie Pollack told the AIM Executive Forum in September – the first step in any reform must be to remove current structural impediments that prevent the Department of Transportation and the T from spending the money that the taxpayers have already given them.

AIM believes that Massachusetts policymakers must provide procurement and policy reform to the transportation system before investing money into an outdate infrastructure.

AIM believes that any solution to the transportation issue must factor in the need to reduce greenhouse gases in the transportation sector to comply with state laws to reduce global warming. 

AIM supports transportation initiatives that are fair to people of all income levels and all regions of the commonwealth.

AIM acknowledges that the commonwealth may need to develop more revenue for transportation in the next three to four years once structural reforms have been accomplished. More work needs to be done to determine the best method of raising revenue and AIM recommends a deliberate approach to funding issues.

Here is AIM’s position on transportation:

AIM supports policies and responsible new investment to reduce congestion; grow capacity to deliver capital projects; lower carbon emissions in the transportation sector and ensure accountability and transparency in transportation investment spending.

  • AIM supports the governor’s bond bill – specifically those provisions that provide employer tax incentives, address congestion and put in place new Department of Transportation (MassDOT) and MBTA management and procurement tools;
  • AIM emphasizes the importance of procurement and contracting reform to get money flowing to projects at an accelerated rate. We support creating $1.4 billion in additional MBTA capital availability by changing the $127 million in annual appropriations to contract assistance or by increasing the annual Base Revenue Amount and Dedicated Sales Tax Revenue amount to the MBTA by $127 million.
  • AIM is open to reducing transportation emissions by supporting the Transportation Climate Initiative (TCI), a regional collaboration of 12 Northeast and Mid-Atlantic states and the District of Columbia that seeks to improve transportation, develop the clean-energy economy and reduce carbon emissions from the transportation sector.
  • AIM remains concerned about raising the gasoline tax because it is regressive and has a punitive effect on less populated regions of the commonwealth;
  • Because AIM is the statewide business association, we support a transportation plan that meets in a fair manner the diverse needs of all regions of the commonwealth;
  • AIM supports studies exploring congestion pricing as a means of reducing or mitigating congestion. Congestion pricing must apply equally to all industries and all types of vehicles and not target specific industries such as ride-sharing companies;
  • AIM supports policies that add governance structures to ensure accountability and transparency in transportation revenue spending;
  • AIM supports $105 million in transportation funding in the supplemental budget currently in conference committee on Beacon Hill: $50 million for MBTA, $40 million for Chapter 90, $10 million for municipal complete streets program.

The AIM Board of Directors continues to discuss details of a transportation proposal. The ongoing discussion reflects the importance that the Board attaches to the transportation debate.

Please contact Bob Rio, Senior Vice President, rrio@aimnet.org, for updates on the transportation debate.

Topics: Massachusetts Legislature, Transportation, Charlie Baker

Leaders Agree to Delay Start of Paid Leave Assessments

Posted by Brad MacDougall on Jun 11, 2019 6:10:21 PM

Governor Charlie Baker on Thursday signed legislation that will extend by three months the July 1 starting date for contributions to the new Massachusetts paid family and medical leave program.

Baker, along with House Speaker Robert DeLeo and Senate President Karen Spilka, had committed to a delay on Tuesday.

statehousedome"To ensure businesses have adequate time to implement the state’s Paid Family and Medical Leave program, the House, Senate, and Administration have agreed to adopt a three month delay to the start of required contributions to the program. We will also adopt technical changes to clarify program design. We look forward to the successful implementation of this program this fall,” read a joint statement issued by the three leaders.

The action comes three weeks after AIM, Raise Up Massachusetts and other groups sought a delay to permit employers, employees and the marketplace to prepare for the sweeping new benefit approved last year. AIM and its 3,500 members are particularly concerned about the lack of clarity surrounding opt-outs and cost sharing with employees.

The delay will not reduce total contributions paid to the new family and medical leave trust fund because the state will increase the contribution rate from .63 percent to .75 percent of wages. The new contribution rate will raise the tax for an employee earning the state average weekly wage from $872 per year to $1,038 per year.

Workers will be able to access paid leave benefits beginning in January 2021.

“Associated Industries of Massachusetts (AIM) and its 3,500 member companies are gratified that the governor, House speaker and Senate president today committed to a three-month delay in the start of the paid family and medical leave program. The decision will allow employers and workers alike to prepare themselves for the era of paid leave and ensure that this landmark initiative gets off the ground successfully,” said John Regan, President and CEO of AIM.

“The state’s top elected leaders deserve tremendous credit for recognizing the need to adjust the timing of the program’s capitalization and to make minor adjustments to the law that was passed last year. AIM is also grateful to the 52 state legislators who sent letters to Beacon Hill leaders urging them to take this action.”

The proposed adjustments to the law include five amendments intended to provide clarity on issues such as intermittent leave and the definition of “serious medical condition.” The clarifying amendments will also align core principles of the Massachusetts paid family and medical leave law with the federal Family and Medical Leave Act (FMLA).

AIM-member employers sent more than 2,500 messages to Governor Charlie Baker and Beacon Hill leaders last month indicating that they do have adequate time or information to make decisions about how to much of the paid leave assessment to share with employees or whether to elect a private-sector alternative to the state program. One company wrote that it has been trying to determine how to implement the new law while preserving the paid medical leave benefit that it already offers its associates because it is more generous than the state law.

“I have contacted insurance companies to get a cost estimate for a paid family leave policy in order to determine our best course of action on that part of the law, but no one is ready to quote a product yet.   We don't even know if the deductions from employees pay should be pre- or post- tax,” the company wrote.

Joining AIM and Raise Up in calling for a delay were the Greater Boston Chamber of Commerce, The Coalition for Social Justice, Local 509 of the Service Employees International Union, Greater Boston Legal Services, The Massachusetts Business Roundtable, the Alliance for Business Leadership and the Springfield Regional Chamber of Commerce.

The administration attempted to allay employer concerns last month by extending the deadline for employers to secure private insurance that would allow them to opt out of the paid leave system. The administration also extended the deadline for employers to inform workers about opt-out plans from May 31 to the end of June.

The business and advocacy groups commended the administration’s efforts but said they will not solve the problem.

“Given the lack of employer clarity on the regulations, the importance of communicating with employees regarding payroll deductions, and the ability for insurance providers to offer a private-sector option, we continue to support and urge legislative action on the proposed amendment extending the deadline for private plan approvals and the commencement of required contributions from July 1, 2019, to October 1, 2019…” the group wrote.

The paid family and medical leave law provides workers with 12 weeks of family leave and 20 weeks of personal medical leave. Workers on paid leave will earn 80 percent of their wages up to 50 percent of the state average weekly wage, then 50 percent of wages above that amount.

The employer is required to pay at least 60 percent of the medical leave contribution required for each employee. The employer is required to pay none of the contribution for family leave. Employers may, of course, pay a higher percentage for each category of leave or elect to pay the entire contribution for each employee.

“The business community remains committed to the successful implementation of paid family and medical leave in Massachusetts,” Regan said.

Want updates on paid family and medical leave in Massachusetts? Contact Brad MacDougall, bmacdougall@aimnet.org.

 

Topics: Massachusetts Legislature, Charlie Baker, Mandated Paid Leave, Paid Family Leave

Business, Advocates Join to Ask for Paid Leave Delay

Posted by Brad MacDougall on May 20, 2019 5:42:34 PM

Associated Industries of Massachusetts and the business organizations and advocates who last year negotiated a compromise version of paid family and medical leave are together asking state leaders to postpone the July 1 starting date of the program by three months.

statehousedome“In the course of our work together we have identified the need for a three-month extension of the July 1, 2019 deadline for approval of employers’ private paid family and medical leave plans and the commencement of the required plan contributions,” the groups said in a letter to Governor Charlie Baker, House Speaker Robert DeLeo and Senate President Karen Spilka.

“In addition, there are five other amendments to chapter 121 of the Acts of 2018 that are necessary for clarification of rights and responsibilities of stakeholders to effect the smooth implementation and operation of the new law,” the letter said.

The group noted that the extension would not impact any of the benefits or the timing for eligibility of benefits under the new law.

Signers of the letter include AIM, Raise Up Massachusetts, The Greater Boston Chamber of Commerce, The Coalition for Social Justice, Local 509 of the Service Employees International Union, Greater Boston Legal Services, The Massachusetts Business Roundtable, the Alliance for Business Leadership and the Chamber of Commerce of Greater Springfield.

The call for a delay from politically diverse groups reflects growing concern that neither the marketplace nor employers nor their workers are adequately prepared for the sweeping new benefits program.

The Baker Administration attempt to allay those concerns three weeks ago by extending the deadline for employers to secure private insurance that would allow them to opt out of the paid leave system. The administration also extended the deadline for employers to inform workers about opt-out plans from May 31 to the end of June.

The business and advocacy groups commended the administration’s efforts.

“However, given the lack of employer clarity on the regulations, the importance of communicating with employees regarding payroll deductions, and the ability for insurance providers to offer a private-sector option, we continue to support and urge legislative action on the proposed amendment extending the deadline for private plan approvals and the commencement of required contributions from July 1, 2019, to October 1, 2019, as well as the additional five clarifying amendments to the statute…” the group writes.

The proposed amendments are intended to provide clarity for employers, insurance providers (developing and providing products to employers), employees applying for the leaves covered by the new law, and health care providers certifying the need for leave. In addition, the clarifying amendments align core principles of the Massachusetts paid family and medical leave law with the federal Family and Medical Leave Act (FMLA).

The amendments include:

  1. Intermittent Leave – This amendment would clarify that leave taken on an intermittent or reduced leave schedule reduces the amount of remaining leave available to a covered worker. This change tracks the language of the federal FMLA.
  2. Serious health condition – This amendment clarifies that eligibility for medical leave for the covered individual’s own serious health condition arises where such a serious health condition “makes the covered individual unable to perform the functions of the covered individual's job.”

If you are an AIM Member and want updates sign up here or contact Brad MacDougall.

Not an AIM member?  Contact Bob Paine to learn how AIM’s advocacy and resources can help your company.

Topics: Massachusetts Legislature, Charlie Baker, Paid Family Leave

Baker Administration Seeks to Address Critical Problem with Paid Family/Medical Leave

Posted by Brad MacDougall on May 1, 2019 4:21:11 PM

The Baker Administration today extended by almost three months the deadline for employers to secure private insurance that would allow them to opt out of the Massachusetts paid family and medical leave system.

State House 2015The administration also extended the deadline for employers to inform workers about opt-out plans from May 31 to the end of June.

Both changes are intended to address a looming problem that could have forced employers to decide whether or not to opt-out at a time when insurance companies have yet to offer private alternatives.

Associated Industries of Massachusetts, which has conducted extensive conversations with the administration on the issue, plans to survey its member employers to determine whether the extension provides enough time to make a responsible decision about their companies’ approach to paid leave.

The paid-leave law passed by the Legislature and signed by Governor Charlie Baker last year allowed companies to bypass the state PFML system if they maintain disability or other insurance policies that provide benefits equal to, or better than, the state program. But companies face a Catch-22 because private insurance companies, citing uncertainty about key elements of the paid-leave regulations, have yet to introduce policies that would qualify as alternatives.

Starting paid leave with no option for companies seeking a private alternative would have contravened the spirit of the 2018 paid-leave law and generated a storm of opposition from the business community.

“The original deadline did not provide enough time for insurance companies to develop effective alternatives to the state paid leave program for employers who want them,” said John Regan, Executive Vice President of Government Affairs at AIM.

“Employers who have for years voluntarily provided some form of paid leave should be able to continue those benefits in the private market.”

The administration plan would give employers until September 20 to file for a private-plan exemption from the state paid-leave system. Employers would need to show proof of insurance by September 20 to remain out of the public system. If the request for exemption is disapproved, employers must then make their first-quarter payment on Oct 1.

Employers are also in the process of deciding how to split the cost of the new program with employees.

Meanwhile, there is also uncertainty surrounding the issue of whether employee deductions will be made pre-tax or post-tax and whether the federal government will tax paid family and medical leave benefits when they become available in January 2021.

The Massachusetts Department of Family and Medical Leave today sent guidance to employers about the impending paid-leave deadlines and the tax issue.

The paid family and medical leave law provides workers with 12 weeks of family leave and 20 weeks of personal medical leave. Workers on paid leave will earn 80 percent of their wages up to 50 percent of the state average weekly wage, then 50 percent of wages above that amount, up to an $850 cap.

Companies and workers are scheduled to begin paying into a paid leave trust fund on July 1. The initial payroll tax is 0.63 percent and will be adjusted annually.  The payroll tax is divided between medical (0.52 percent) and family (0.11 percent) leave. 

The employer is required to pay at least 60 percent of the medical leave contribution required for each employee. The employer is required to pay none of the contribution for family leave. Employers may, of course, pay a higher percentage for each category of leave or elect to pay the entire contribution for each employee.

Companies employing an average of fewer than 25 employees in Massachusetts will not be required to pay the employer portion of premiums for either family or medical leave.

An individual’s paid family or medical leave weekly benefit amount is calculated as follows: (a) The portion of an individual’s average weekly wage that is equal to, or less than, 50 percent of the state average weekly wage is replaced at a rate of 80 percent; the portion of an individual’s average weekly wage that is more than 50 percent of the state average weekly wage is replaced at a rate of 50 per cent.

The initial maximum weekly benefit amount is $850.

The law requires that companies seeking to opt out must have private insurance that offers:

  • Same number of job-protected weeks of leave
  • Equivalent wage replacement
  • Employee contributions no more than required by law

Sign up here to receive regular updates on paid family and medical leave in Massachusetts, or contact Brad MacDougall at bmacdougall@aimnet.org

Topics: Charlie Baker, Mandated Paid Leave, Paid Family Leave

AIM's John Regan Talks Issues on Comcast Newsmakers

Posted by Christopher Geehern on Jan 31, 2019 12:38:52 PM

John Regan, AIM's Executive Vice President of Government Affairs, recently joined Comcast Newsmakers and host Jenny Johnson for a look at the issues facing employers as the Massachusetts Legislature begins a new, two-year session.

Regan.Comcast.2019

 

 

 

Topics: Massachusetts Legislature, Associated Industries of Massachusetts, Charlie Baker

AIM Calls for End to MassHealth Employer Assessment

Posted by Rick Lord on Jan 2, 2019 8:57:01 AM

Associated Industries of Massachusetts and its 4,000 member companies today called upon the Legislature and Governor Charlie Baker to end to the two-year assessment imposed on employers last year to close a financial gap at the state’s MassHealth insurance program for low-income residents.

health_careAIM believes the assessment is no longer necessary because employers last year paid tens of millions of dollars more than anticipated under the levy. Businesses are on track to contribute some $519 million by the time the assessment sunsets at the end of this year instead of the $400 million envisioned under the 2017 legislation.

At the same time, enrollment in MassHealth has fallen as the Baker Administration has initiated steps to ensure that only people eligible for benefits receive them. And state tax collections have exceeded targets over the past several months, putting the state on firmer financial footing.

“The conditions that led to the imposition of the surcharge no longer exist. Employers who have paid hundreds of millions of dollars in assessments believe it is fair to look at ending the surcharge in year two,” said John Regan, Executive Vice President of Government Affairs at AIM.

The Legislature passed the assessment in July 2017 minus a set of structural reforms proposed by Governor Baker to place the MassHealth/Medicaid program on a firm financial footing. The assessment fell most heavily upon companies in which employees elect to use MassHealth rather than the employer-sponsored health plan.

The Boston Globe: Employer group balks at fees to prop up MassHealth

An existing assessment called the employer medical assistance contribution (EMAC) increased from $51 to $77 per employee. Employers also were required to pay up to $750 for each worker who receives public health benefits.

Employers may request a waiver from the fees if they prove a hardship. Of 246 such waiver requests, administration officials said they have allowed 99.

Governor Baker originally proposed a $2,000-per-employee assessment upon companies at which at least 80 percent of full-time worker equivalents did not take the company’s offer of health insurance, and that did not make a minimum contribution of $4,950 annual contribution for each full-time worker. That proposal encountered significant opposition from the business community.

AIM member employers are proud to lead the nation in providing health care coverage to their employees. Sixty-five percent of Bay State companies offer health insurance coverage to their workers, compared with 56 percent of employers nationwide. A full 100 percent of Massachusetts employers with 200 or more employees offer coverage. 

Employers stand ready to work with policymakers to make long-term structural reforms to both the MassHealth program and the commercial insurance markets to make the financing of health care for Massachusetts residents sustainable.

“Eleven years ago, employers joined with doctors, hospitals, patient advocates and lawmakers to forge a health-reform law that required all parties to share the responsibility for improving access to health care. The employer community calls for that same sense of shared responsibility now to solve the MassHealth shortfall,” Regan said.

Please contact Katie Holahan, Vice President of Government Affairs at AIM, keh@aimnet.org, for updates on this issue.

Topics: Massachusetts Legislature, Health Care, Charlie Baker, Employer Health Assessment

Compromise Produces Solid Legislative Scorecard

Posted by John Regan on Oct 3, 2018 1:30:00 PM

A legislative session marked by grand compromises and outside ballot initiatives gave state lawmakers generally solid grades in the 2017-2018 AIM Legislative Scorecard released today.

Scorecard2AIM publishes the Legislative Scorecard at the end of each two-year Beacon Hill session to ensure that employers 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 2017-2018 legislative session was dominated by a wave of ballot initiatives that forced employers and lawmakers to forge a broad compromise establishing paid family and medical leave, increasing the minimum wage to $15 per hour and eliminating overtime pay for Sunday retail work.

AIM helped to negotiate the compromise because the proposed ballot questions on those issues were dangerous to business and almost certainly would have passed in a year of unprecedented electoral activism.

A separate potential ballot question establishing a surtax on incomes of more than $1 million died in the face of a court challenge lodged by AIM President Richard Lord and four other prominent business leaders.

And employers struggling to provide good health insurance to their employees remained frustrated at having to pay a $200 million annual assessment to close a budget gap in the MassHealth program for low-income people with no prospect of reforms.

Virtually every member of the House of Representatives earned grades of 60 percent or higher. Eight representatives topped the list at 100 percent, while 36 ended the session at 80 percent.

The ratings were based on five roll-call votes dealing with issues ranging from economic development to energy.

In the Senate, 29 of 36 members posted scores of 50 percent or better, with three senators leading the way at 75 percent. Six senators ended the session at 38 percent and three were at 25 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.

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:

  1. 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.
  2. 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. That structure must include a reliable and efficient transportation system.
  3. 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.
  4. Moderate the immense long-term burden that health care and energy costs place on
    business growth.

Should the Legislature resume formal sessions before January, AIM may issue an updated Scorecard.

Topics: Massachusetts Legislature, Massachusetts senate, Massachusetts House of Representatives, Charlie Baker

Baker Signs Energy, Non-Compete Bills; Vetoes Patent Trolling

Posted by John Regan on Aug 13, 2018 8:00:00 AM

Governor Charlie Baker last week signed a clean-energy bill and new rules governing the use of non-compete agreements, but vetoed a “patent-trolling” provision that could have prevented companies from protecting their intellectual property.

Baker.2017The energy bill was among 53 pieces of legislation passed in the waning hours of the formal legislative session that Baker signed on Thursday. His actions on non-competes and patent-trolling, both of which were part of a $1.2 billion economic development bill, came on Friday.

AIM supported the energy measure and the compromise bill on non-competes but opposed the patent-trolling language.

“We are grateful to Governor Baker for thoughtful decisions that will benefit both the business community and the larger community,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

AIM had urged Baker to strike the problematic patent-trolling language from the economic development bill.

“The patent-trolling language contained in the bill pending before you is materially different from the compromise language approved by the Joint Committee on Consumer Protection and Professional Licensure committee (S.2432),” Lord wrote to Baker early last week.

“The changed language appeared within the final days of the legislative session and has raised significant concerns from employers who believe it may limit the ability of companies to protect intellectual property.”

AIM supported other portions of the economic-development bill ranging from an apprenticeship tax credit to changes to the Economic Development Incentive Program.

The non-compete language signed by Baker mirrors an agreement that AIM and other business groups reached two years ago with House Speaker Robert DeLeo. The measure limits non-competes to one year and gives employees the opportunity to consult a lawyer when signing a non-compete but does not require companies that compensate employees at the time they sign non-competes to pay them again during the restricted period.

The new energy bill authorizes an additional procurement of offshore wind power, increases the renewable portfolio standard that governs the amount of clean energy utilities must purchase, and establishes an energy storage target. The renewable portfolio standard will increase by one percent until the end of 2019, then by two percent each year until the end of 2029. It would then set the state on a track of one-percent increases each year thereafter.

Topics: Non-Compete Agreements, Energy, Charlie Baker, Patent Trolling

AIM Urges Governor to Sign Energy Bill, Parts of Economic Development Bill

Posted by Christopher Geehern on Aug 6, 2018 8:00:00 AM

Associated Industries of Massachusetts on Friday urged Governor Charlie Baker to sign a clean-energy bill and approve portions of a $1.2 billion economic-development bill passed by the Legislature earlier in the week.

State_House_and_One_BeaconIn a letter to the governor, AIM expressed support for key portions of the economic-development bill ranging from an apprenticeship tax credit to imposition of reasonable limits on the use of non-compete agreements. But the largest employer association in the commonwealth urged the governor to strike other elements of the bill, including a “patent-trolling” provision that could prevent companies from protecting their intellectual property.

“The patent trolling language contained in the bill pending before you is materially different from the compromise language approved by the Joint Committee on Consumer Protection and Professional Licensure committee (S.2432),” AIM President and CEO Richard C. Lord wrote to Baker.

“The changed language appeared within the final days of the legislative session and has raised significant concerns from employers who believe it may limit the ability of companies to protect intellectual property.”

The economic-development and energy measures were part of a flurry of activity as the Legislature ended the formal portion of its 2017-2018 session early Wednesday morning. Governor Baker has 10 days to sign the bills, veto them or send back amended language.

The language in the economic-development bill governing use of non-competes mirrors a compromise that AIM and other business groups reached two years ago with House Speaker Robert DeLeo. The measure limits non-competes to one year and gives employees the opportunity to consult a lawyer when signing a non-compete but does not require companies that compensate employees at the time they sign non-competes to pay them again during the restricted period.

AIM fought relentlessly for more than 11 years on behalf the vast majority of Massachusetts employers who wish to preserve the use of non-competes to protect intellectual property. The new bill accomplishes that goal.

The new energy bill authorizes an additional procurement of offshore wind power, increases the renewable portfolio standard that governs the amount of clean energy utilities must purchase, and establishes an energy storage target. The renewable portfolio standard will increase by one percent until the end of 2019, then by two percent each year until the end of 2029. It would then set the state on a track of one-percent increases each year thereafter.

The bill “is a measured approach to public policy. It changes only those programs that need changing without disrupting newly established programs before they have had a chance to work. It will reduce greenhouse-gas emissions in Massachusetts while being considerate of our high electric prices,” Lord wrote in a separate letter to the governor.

Topics: Massachusetts Legislature, Economic Development, Energy, Charlie Baker

Summing Up, Looking Ahead: Challenges Await Employers

Posted by Rick Lord on Jan 2, 2018 8:30:00 AM

The first half of the 2017-2018 legislative session in Massachusetts was dominated by the issue of health-care costs and the role employers should play in helping to close a budget gap in the state Medicaid program.

Exterior.jpgBut larger battles await during 2018 as progressive activists seek to place three questions on the Massachusetts election ballot that would together impede economic growth for a generation. The initiatives would impose an 80 percent surtax on incomes more than $1 million for pass-through businesses, establish a $1.3 billion-per-year paid leave program and increase the minimum wage to $15 per hour.

Associated Industries of Massachusetts worked successfully during 2017 on a range of issues confronting its member employers from every sector of the economy.

The most important achievement was a compromise that transformed a proposed $700 million annual health-care surtax into a two-year, $200 million assessment to close the budget shortfall in the commonwealth’s health-insurance program for low-income people. The assessment increased the Employer Medical Assistance Contribution (EMAC) in a manner that will fall most heavily on companies where employees use MassHealth instead of an employer health plan.

The levy will be partially offset by a two-year Unemployment Insurance rate adjustment that will save employers $335 million over two years versus current rates. AIM was disappointed that lawmakers passed the assessment without making structural reforms to the MassHealth program.

“We believe, however, that the Legislature is committed to resolving the financial problems at MassHealth and employers look forward to working with lawmakers toward that goal in 2018,” said John Regan, Executive Vice President of Government Affairs at AIM.

AIM also played a key role in hammering out compromise legislation to extend employment protection to pregnant workers in Massachusetts.

The Pregnant Workers Fairness Act requires employers to make reasonable workplace accommodations for pregnant employees — more frequent or longer breaks, temporary transfer to a less strenuous or hazardous position, a modified work schedule, or seating for those whose jobs require extended standing.  AIM opposed early versions of the bill because of concern among employers that the legislation provided an applicant or employee with unlimited power to reject multiple and reasonable offers of accommodation by an employer. The compromise bill addresses that concern.

There was no such compromise in August when the Baker Administration introduced regulations that set specific limits on sources of greenhouse gases, the emissions linked to climate change. State officials indicate that the regulations could increase costs to electric ratepayers by as much as 2 percent. The new rules aim to reduce the state’s carbon emissions 25 percent below 1990 levels by 2020, as required by state law.

The regulations, however, were ultimately unnecessary. The administration could have chosen to work with the Legislature to change the Global Warming Solutions Act to allow alternative ways for the electricity sector to meet these obligations.  The administration instead turned a blind eye to the corrosive impacts that high electric rates are having on struggling Massachusetts companies.

The three potential 2018 ballot questions would represent an unprecedented potential policy crisis for Massachusetts:

  • The constitutional tax amendment would raise from 5.1 percent to 9.1 percent the levy on income of more than $1 million per year, including income generated by subchapter S-corporations, LLPs, LLCs, partnerships, and other pass-through entities. The $1.9 billion tax increase would be paid by roughly 19,500 filers, 80 percent of whom are anticipated to file with some business income.
  • The paid leave question would mandate 16 weeks of paid family leave and 26 weeks of paid medical leave for employees for a total projected cost of $1.3 billion.
  • The minimum wage question would raise the wage from the current $11 per hour in annual $1 per-hour annual increments starting in 2019 until it reaches $15 an hour in 2022. That amounts to a projected increase of 36 percent.

Supporters of the paid-leave and minimum wage questions filed the requisite number of signatures last month to move a step closer to the ballot. Massachusetts lawmakers now have until the end of April to consider and pass the initiatives. Any initiatives that are not adopted must gather and file an additional 10,792 signatures by July 3 to make the 2018 ballot.

The income surtax constitutional amendment qualified for the ballot in 2016. In October, I joined four other prominent business leaders in filing a suit challenging the validity of the proposal, asserting that the amendment is riddled with constitutional flaws and would make the new tax essentially permanent and unchangeable. 

“It is impossible to overstate the potential threat that these three ballot questions pose for Massachusetts employers.  The advocates supporting the questions are well funded and are prepared to spend millions of dollars to get their message across to voters,” Regan said.

The ballot battle will take place just as employers begin to comply with the new Massachusetts Pay Equity Law on July 1, 2018. The law prohibits employers from discriminating based on gender in the payment of wages and other compensation for “comparable” work. Many employers are already undertaking the internal wage studies that provide a safe harbor from litigation under the statute.

Beacon Hill lawmakers will conclude the second year of their two-year session on July 31. The end of formal sessions will kick off an election season that will see Governor Charlie Baker, US Senator Elizabeth Warren and other prominent office holders face re-election challenges.

 

Topics: Massachusetts Legislature, Massachusetts employers, Charlie Baker

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