Workers' compensation and unemployment insurance reforms, defeat of tax increases highlight NFIB accomplishments for small business
From the 2019-2020 session of the 106th Nebraska Legislature.
Defeated Minimum Wage Increase for Tipped Employees
Legislative Bill 400 would have increased the state minimum wage rate for “tipped” employees from the current rate of $2.13 per hour to $3.60 per hour on August 1, 2019, and to $4.50 per hour on January 1, 2020.
Stopped Paid Sick Leave Mandate
Legislative Bill 305 would have required employers to provide paid sick leave to full-time employees on the basis of one hour of paid sick leave for every 30 hours worked, up to a maximum of 40 hours annually.
Halted Paid Family Medical Leave Insurance Act
Legislative Bill 311 would have required employers to fund paid family medical leave, pay employees all other benefits during the leave of absence, and allow employees to return to their jobs after exercising their right to family medical leave.
From the 2017-2018 session of the 105th Nebraska Legislature
Won Workers’ Compensation Reforms
NFIB successfully lobbied for the passage of Legislative Bill 953, which will reduce the cost of the workers’ compensation system for employers by removing significant impediments to the settlement of claims.
Introduced by Sen. Joni Albrecht (Thurston), LB 953 will address issues relating to the approval of lump-sum settlements by the Workers’ Compensation Court. The measure will establish a conclusive presumption that a lump-sum settlement is made in conformity with the compensation schedule and for the best interests of the employee or his or her dependents under all of the circumstances, if the employee’s attorney elects to affirm these facts in the application for an order approving the settlement.
The conclusive presumption will apply to cases in which (a) the employee is eligible for Medicare, is a Medicare beneficiary, or has a reasonable expectation of becoming eligible for Medicare within 30 months of executing the settlement; or (b) medical, surgical, or hospital services provided to the employee are not paid by the employer, or any person other than Medicaid, who has made any payment to the supplier of medical, surgical, or hospital services provided to the employee, is not reimbursed by the employer.
Electronic payment of workers’ compensation benefits was another NFIB victory. Introduced by Sen. John Lowe (Kearney), Legislative Bill 957 will authorize, upon written or electronic agreement of an employer or insurer and an employee entitled to compensation under the Workers’ Compensation Act, payments to be made by electronic means (direct deposit, prepaid card, or similar electronic payment system).
Defeated Tax Increases
With lobbying support from NFIB, the Legislature passed three measures designed to shelter residents/individuals from state tax increases triggered by inflation and the new federal Tax Cuts and Jobs Act.
- Legislative Bill 1090 will prevent changes made by the 2017 federal Tax Cuts and Jobs Act from triggering automatic tax increases in Nebraska, saving individual residents approximately $226 million, collectively. The measure restores the personal exemption credit that was effectively repealed by the Tax Cuts and Jobs Act, increases Nebraska’s standard deduction for individual taxpayers, and maintains the current method of indexing individual income tax brackets for inflation, rather than the method adopted under the new federal tax law which grows more slowly. Individuals will save $134 for each personal exemption claimed on their tax return due to the reinstatement of personal exemptions under state tax law.
- Legislative Bill 1089 will restore the state’s personal property tax exemption for purchases of agricultural and business equipment when using trade-ins. The exemption had been eliminated by the 2017 federal tax bill. LB 1089 will prevent valuation increases on personal property that would otherwise be subject to taxation at the local level.
- Legislative Bill 738 will adjust the state’s social security income tax exemptions automatically to keep pace with inflation, starting in 2020, which will protect the purchasing power of retirees.
Stopped Costly Tax Shifts
NFIB helped beat back Legislative Bill 1084, a significant tax shift that would have raised sales and income taxes while spending more on K-12 education aid and increasing the Property Tax Credit Cash fund. Among other things, the bill would have increased the state sales tax rate; removed several sales tax exemptions; imposed sales tax on new products and services; repealed the $10,000 personal property tax exemption; levied an income surtax on high earners; imposed a state alternative minimum tax; and repealed an adjustment allowing individuals to decrease their adjusted gross income for non-Nebraska income earned through a pass-through entity.
Another measure NFIB worked to defeat was Legislative Bill 829, a proposal designed to reduce local property taxes. Under LB829, property owners would have received refundable income tax credits from the state equal to half the school district taxes levied on their property. Those without enough income tax liability would have received a direct payment from the state. The bill would have cost the state an estimated $1.1 billion annually, without identifying budget cuts or tax increases to provide funding for property tax relief.
Derailed Costly Labor Bills
NFIB successfully opposed a series of costly bills introduced on behalf of the labor unions, including LB 305 (Family Medical Leave Insurance Act); LB 354 (Wage Disclosure Act); LB 420 (Ban the Box); LB 473 (Mandated Employee Rest Periods); and LB 844 (Paid Sick Leave).
Won Unemployment Insurance Reform
Unemployment insurance is a major cost of doing business for Nebraska employers, who in 2015 paid more than $107 million in unemployment insurance taxes, not including federal unemployment taxes. Like workers’ compensation, the unemployment insurance program is fully funded by employers.
Legislative Bill 203 reforms Nebraska’s unemployment insurance system by bringing it more in line with national standards by implementing requalification provisions. Under LB 203, unemployment insurance applicants who quit their most recent employment without good cause will be ineligible for additional unemployment insurance benefits until they have returned to insured work and have earned at least four times their weekly benefit amount.
Nebraska had been one of only three states that did not require re-qualification for benefits after individuals voluntarily quit a job without good cause. The bill is expected to save an estimated $3.7 million in 2018 and nearly $5 million in 2019.
Preserved Entry-Level Wage Opportunities For Nebraska’s Young
Legislative Bill 211 would increase the state minimum wage for tipped employees from $2.13 per hour to $3.60 per hour in August of 2017 and then to $4.50 per hour in January of 2018. NFIB expressed opposition to the bill, citing the fact that the minimum wage established under the proposed bill would exceed that which exists under federal law.
Protected Paid Leave Agreements Between Employer and Employee
Legislative Bill 305 would establish a statewide paid family medical leave insurance program similar to Nebraska’s unemployment insurance system and have it administered by the state Department of Labor. The bill also would require employers to pay all other benefits that are due to the employee that would be paid in the absence of leave, as well as all other benefits offered to the employee (vacation, sick leave, etc.) and would require employers to allow employees to return to their jobs after exercising their right to family medical leave.
Stalled Ban-The-Box Bill
Under Legislative Bill 420, employers with 15 or more employees would be prohibited from asking an applicant to disclose, orally or in writing, information concerning the applicant’s criminal record or history, including any inquiries on any employment application, until the employer or employment agency has determined the applicant meets the minimum employment qualifications.
Defeated Costly Workers’ Compensation Proposal
Legislative Bill 181 proposed changes in Nebraska workers’ compensation law that would have most certainly increased the costs of workers’ compensation claims for small employers. Under the bill’s provisions, if a physician selected by the employer renders medical findings about an employee, and the employee disagrees with those findings, the employee is entitled to a subsequent examination from a physician of his or her own choosing at the expense of the employer. Although the legislation was advanced from the Business and Labor Committee, lack of support when the bill was considered on General File resulted in a motion to “bracket” or delay further consideration of the bill until January 10, 2018.
Many thanks to the NFIB members who responded to the NFIB “Action Alert” by contacting members of the Legislature to express their opposition to the measure.
Stopped Sales Tax on Services
NFIB opposed two separate measures that would have imposed a sales tax on a significant number of services that are currently exempt from taxation. Each of these measures (Legislative Bill 312 and Legislative Bill 563) remains stalled in the Revenue Committee.
From the 2015-2016 session of the 104th Nebraska Legislature
Won Change in Health-Care Coverage
NFIB lobbied for the successful passage of Legislative Bill 817, which now allows small businesses to contract with a primary care physician and pay a manageable monthly fee to provide primary care services to employees. Supplemented with a wrap-around insurance policy for catastrophic coverage, these contacts are estimated to result in cost savings of 12 percent to 15 percent for small businesses.
Defeated Three Costly Proposals
- Minimum Wage Increase/Tipped Employees–Legislative Bill 1089 would have increased the state minimum wage rate for tipped employees from the current rate of $2.13 per hour to $3.60 per hour on August 1, 2016, and to $4.50 per hour on January 1, 2017.
- Paid Sick Leave–Legislative Bill 493 would have required employers to provide paid sick leave to full-time employees on the basis of one hour of paid sick leave for every 30 hours worked, up to a maximum of 40 hours annually.
- Paid Family Medical Leave Insurance Act–Legislative Bill 850 would have required employers to pay employees all other benefits during the leave of absence and to allow employees to return to their jobs after exercising their right to family medical leave.
- reduce the interest rate currently applicable to awards of WC benefits on appeal from 14 percent to approximately 8 percent
- reinstate the defense of employee misrepresentation to allow employers to avoid having to pay benefits resulting from an injury or condition relating to misrepresentations given by the employee when applying for a position with the employer
- clarify that the prohibition against “balance billing” an employee for medical expenses in excess of the workers’ compensation fee schedule extends to finance charges and late penalties
- authorize trust funds required to be established under the Workers’ Compensation Act to be invested in the same manner authorized for corporate trustees holding retirement or pension plans for the benefit of current or former employees of political subdivisions.