2018 End of Session Report on South Dakota Legislature

Date: May 03, 2018

NFIB helped defeat pay secrecy, paid leave bills

A number of issues with potential impacts on small business were considered by the South Dakota Legislature for the first time, after gaining traction in other states. One was ‘pay secrecy’ or ‘salary history’ or ‘wage disclosure’ as it’s called elsewhere. In the end, however, our Legislature continued to maintain a healthy pro-small-business attitude.

Pay Secrecy

A “pay secrecy” proposal, Senate Bill 121, was a new issue for lawmakers to consider. It would have made it unlawful for employers to discuss salary history when conducting interviews and negotiating offers. This issue has received some favorable consideration in other states.
NFIB opposed this measure, which was handily defeated, by pointing out to lawmakers that salary history is a key factor in accurately matching the needs of a potential employee with those of a business. NFIB also argued that a person’s resume is only one source of data used to match an employee’s skills with the opportunities available.

Employment Policies

There were also repeat efforts to impose several employment mandates on South Dakota small businesses, which NFIB successfully helped defeat.

NFIB joined other business groups to defeat Senate Bill 120, which would have required an employer to provide paid sick leave to an employee after 90 days of employment. It also specified the nature and amount of the paid leave required. The good news is that the vast majority of businesses already offer paid or unpaid time off. (see infographic here). Also, the federal Family and Medical Leave Act “provides certain employees with up to 12 weeks of unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave.”

House Bill 1153 would have mandated certain protections and accommodations for pregnant and breastfeeding mothers in their places of employment. This was a similar measure to a bill that was defeated the prior year.

Taxes

There were no successful efforts to increase taxes, although there were a handful of bills introduced seeking to impact them.

House Bill 1238 was the perennial attempt to lower the sales tax on food and increase it on other goods and services. There was a hog house amendment placed on the bill in committee which would have provided that if the state were allowed in the future to collect and remit sales tax on out-of-state remote sellers, the additional net revenue would be used to reduce the rate of taxation on food.

House Bill 1309 would have provided for a periodic review of sales and use tax exemptions. This bill, as introduced, would have repealed the sales tax exemptions on certain goods and services and diverted those monies to technical schools. This measure would have also repealed the sales tax on food. After the testimony on HB 1309, a hog house amendment was placed on the bill that mandated each tax exemption to be reviewed by an interim committee to determine whether the tax exemption shall be retained or repealed before January 1, 2023, and every four years thereafter.

Both proposals were defeated.

Balanced Budget Amendment

There were multiple efforts to rescind House Joint Resolution 1001, which was adopted by the South Dakota Legislature in 2015 and supported by NFIB. The resolution made formal application to Congress to call an Article V constitutional convention, or convention of the states, for the purpose of a balanced budget amendment to the Constitution of the United States of America.

These efforts to rescind, House Joint Resolution 1003 and Senate Joint Resolution 7, were defeated with strong opposition by NFIB. NFIB testified in opposition to a repeal of this resolution, reminding the Legislature that small-business owners continue to remain frustrated with the federal government’s failure to address the budgeting that every citizen and small business must adhere to in its daily activities

Workers’ Compensation Reform

The Legislature also considered, but did not adopt, a proposal to reform the state’s workers’ compensation laws, reform that has been successful in other states. Senate Bill 145 would have changed the venue of a bad-faith claim against a workers’ compensation insurance carrier from the circuit court to the Department of Labor and put a cap on the damages that may be awarded. This effort was lead by the insurance industry but was supported by NFIB, because we recognized, among other things, this proposal would likely result in lower insurance premiums for small-business owners.

Late Payment

House Bill 1050, if it had passed, would have reduced the interest rate state government would have to pay on any late payment to a vendor of goods and services from 18 percent per year to 4 percent per year. NFIB lead an effort to amend the bill in committee from the proposed 4 percent per year to the statutorily established Category B rate, which is currently 10 percent per year as a compromise as NFIB wanted to make sure that there are consequences for even the state for not paying their small business vendors on time.

Out-of-State Professionals

Gov. Dennis Daugaard proposed a measure that would have provided for a temporary licensure compact for out-of-state professionals. House Bill 1319 was apparently intended to allow out-of-state licensees easier access to the South Dakota workplace. It would have authorized the state to provide temporary licensure within South Dakota for a large group of professionals. In response to the possible passage of HB 1319, several professional groups joined together to obtain introduction of a bill Senate Bill 172, which would have allowed those professions to opt out of the temporary licensure compact. Ultimately, HB 1319, was defeated, which eliminated the need for the opt-out provisions and, at the request of the proponents, SB 172 was also defeated.

 

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