The Beacon Hill Report – April 3, 2014

Date: April 02, 2014

Workplace Bullying Law Advances

The Joint Committee on Labor and Workforce Development favorably reported H.B. 1766 sponsored by Rep. Ellen Story (Amherst), workplace bullying legislation, on March 19, 2014.  H.B. 1766 would hold employers strictly liable for any “abusive conduct” in the workplace, whether or not the employer was aware of it.  The legislation creates a new legal cause of action for the employee and provides remedies for the aggrieved worker, including reimbursement of lost wages, medical expenses, compensation for emotional distress, punitive damages, and attorney’s fees.  The unreasonable strict liability standard, along with the damages that would be available, will make this bill attractive to the trial bar as they seek to expand their market share and create new lines of business despite the fact that alternative actions such as intentional infliction of emotional harm and interference with contractual relations, as well as civil and criminal actions against physical harm, already exist.  

The internal battle between the Massachusetts House and Senate over increasing the minimum wage continues but the House will vote this week on their legislation to increase the minimum wage and “reform” unemployment insurance. The latest version (House 3983) calls for a $10.50 minimum wage, phased in three steps in little over two years without indexing the wage to inflation. When fully implemented, Massachusetts will have the highest minimum wage in the country. This increase will adversely impact those small businesses with marginal profits that pay minimum or near minimum wages and, with other excessive costs of doing business in Massachusetts (like unemployment insurance), will create another competitive disadvantage that MA small businesses simply cannot afford!

In 2013, the National Federation of Independent Business commissioned a study focusing on the economic impact of significant increases in Massachusetts' minimum wage, similar to the Massachusetts State Senate’s 37.5% increase in the minimum wage. The conclusion: a $45 billion reduction in economic activity over 10 years, at least 50,000 jobs lost, with more than half of those in the small business sector, and with job losses concentrated among young workers, inexperienced workers, and minority workers. This proposal fails to address high unemployment rates among young and inexperienced workers. We need a training wage for unskilled workers. And we need to end the automatic time and a half pay for retail workers on Sundays and holidays – a remnant of the state’s old ‘blue laws’ – which is so costly for low margin small businesses struggling to keep their doors open during difficult economic times.

The House stated they planned to lessen the blow from increasing the minimum wage to small business by including unemployment insurance reform within the minimum wage bill. While the proposal would essentially freeze UI taxes at an artificially low rate over the next four years to create short-term savings for employers, the bill fails to address the underlying causes of the state’s unreasonably high UI taxes. Eligibility requirements and benefit levels are where the real savings are found to keep Massachusetts businesses competitive with other states in the long run. When the reform legislation under consideration is fully implemented, Massachusetts employers will likely still have some of the highest UI taxes in the nation and the highest minimum wage in the nation. 

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