Winning greater regulatory transparency, stopping lawyer-enriching proposal a few of the highlights from a busy session
The second half of the 62nd Utah State Legislature adjourned March 8 with some big NFIB victories for small business.
From the 2018 half
Defeated a Proposed Minimum-Wage Increase
House Bill 117, calling for an hourly wage increase, was back again for the fifth year. This bill would have increased the minimum-wage rate to $10.25 per hour after July 1, 2018, and then to $12 an hour after July 1, 2022. It would have also allowed the Labor Commission to establish, by rule, a minimum hourly wage for minors that is different from the above-mentioned minimum wage. NFIB/Utah testified in committee against this legislation, pointing out many concerns for small business. The first concern mentioned by Utah businesses is that the market for employees in Utah is a very difficult market. Employers are finding it difficult to draw enough qualified applicants for jobs they are trying to fill. The market is also showing that if employers want to find qualified employees and keep them for a long duration they need to pay what the market demands. Small businesses in Utah prefer that wages be market driven not artificially set by legislation. NFIB/Utah was key in having this bill held in committee.
Stopped a Special Minimum Wage for Tipped Employees
A minimum-wage increase for tipped employees, HB 118, was in a separate bill this year from the proposed minimum-wage increase. It would have required those who pay tipped employees to compensate them at least $3.25 an hour, up for the current $2.13 minimum. NFIB called several establishments that pay tipped employees and also talked to many of the employees. Many of them make enough in tips to calculate a wage over the proposed minimum-wage increase. One of the employees could make about $100 to $150 per shift in tips at a restaurant and didn’t even have the employee take customers’ orders, just service the table with drinks and clear the empty plates. NFIB presented the main testimony in committee, and, along with lobbying the committee, was instrumental in having the bill held in committee.
Killed a Proposal to Increase Litigation Against Employers
House Bill 79, which was opposed by the entire Utah Business Coalition, would have allowed the recovery of attorneys’ fees by the prevailing party in litigation, under the private attorney general doctrine, by repealing the prohibition currently in statute. Allowing the recovery of attorneys’ fees in these matters would encourage additional litigation.
A similar provision under California law has resulted in lawsuits against employers. Just the specter of having attorneys’ fees awarded against businesses could motivate businesses to settle lawsuits that should not otherwise be settled (including expensive and lengthy environmental claims).
NFIB played a significant role in lobbying legislators to keep what is already in law and to help protect businesses from potential abuse.
Beat Back a Bill Changing Definition of Employer
House Bill 283 aimed to expand federal workplace protection laws not intended for the smallest employers. Specifically, this bill would have amended the definition of employer and required certain employee discrimination and unfair labor practice claims involving employers with fewer than 15 employees to proceed to an evidentiary hearing without a division investigation. Something NFIB viewed as unfair to employers. NFIB could see this legislation for what it was and knew that small businesses in Utah could not afford to have additional rules and regulations placed upon them. Small businesses treat their employees like family and work hard to make sure they are happy because if they don’t, they know how difficult it is to replace employees. NFIB stood firm against heavy pressure in helping defeat this unwise proposal.
Prevented a Dream Bill for Lawyers from Passing
A dream bill for trial attorneys and a nightmare for business owners, House Bill 359 would have created new liability for individuals, businesses, homeowners, property owners, churches, and parent companies jointly and severally liable for any intentional tort that occurs within a facility or on their property. NFIB/Utah and its entire business coalition partners worked very hard to make sure this bill was stopped in committee.
In between times working to kill legislation bad for Main Street entrepreneurs, NFIB helped get some pro-small-business legislation passed.
Won Single-Sign-On Simplification
House Bill 150, funds the “single sign on” simplification program. NFIB/Utah successfully limited the fee to a nominal amount not to exceed $5. This fee will be used to design, create, operate, and maintain the “single sign on” web portal. The Department of Technology Services is charged to create a web portal that allows a person doing business in the state to access, at a single point of entry, all relevant state-collected business data about the person, including information related to:
- business registration
- workers’ compensation
- tax liability and payment
- other information collected by the state that the department determines is relevant to a person doing business in the state.
By enabling a single sign-on process that extends across agencies, the state can create a new model for serving businesses and citizens by providing a more personalized view of all of the services that are relevant to the individual user.
In a few years, Utah will have an excellent “single sign on” source for business. NFIB/Utah is very supportive of a “single sign on” source and we look forward to seeing this become reality. NFIB/Utah supported this bill through both houses and thanks Governor Herbert for signing it into law.
Secured Single-Sales-Factor Method for Tax Calculation
House Bill 293 alters Utah’s Corporate Income Tax calculation to include the “single-sales-factor” method for most industries in the state. This means that for a multi-state business conducting business in Utah, the state will only use the amount of sales in Utah to calculate a company’s state income tax liability on their profits. More and more states are using the “single sales factor” rather than including a business’s property and payroll in the state as part of the calculation of their tax liability. The hope is that this bill will lower the tax burden on Utah businesses, which will help sustain Utah’s economic success for the future. NFIB/Utah encouraged all legislation that will help business be more successful. HB 293 was signed into law by the governor
Obtained Vital Independent Contractor Clarification
House Bill 364 further clarifies when an entity can be considered an independent contract, not an employee. NFIB/Utah welcomed this clarification and encouraged passage throughout the process. It was signed into law by the governor.
Acquired Greater Local Government Transparency
Signed into law by Governor Herbert, Senate Bills 28 and 29 are companion bills seeking transparency in local governments. Currently, there are over 700 different entities that local governments have created. It has been very difficult to determine exactly whom those entities are. SB 28 will require all those entities to register with the lieutenant governor’s office and will allow the state to withhold funds and property tax disbursements if an entity does not comply. SB 29 requires each county in Utah to publish the list of government entities on the county’s website. NFIB/Utah has worked for years to create transparency in government at all levels. It is difficult for all businesses to comply with rules and regulations created by government entities and even harder if they don’t know whom they are and what their purpose is. NFIB/Utah will continue to support transparency legislation in the future.
Succeeded in Getting Workers’ Compensation Advisory Council Changes
Senate Bill 64 passed the Utah State Legislature and was signed by the Governor. The most important aspect of this bill reduced the rate at which certain workers’ compensation carriers and self-insured employers must reimburse a hospital for covered medical services. NFIB/Utah supported the changes made in this legislation and appreciates the advisory council for staying on top of concerns in this arena. The bill also makes some technical changes to the membership of the workers’ compensation advisory council as well as changes to the report that the advisory council gives to the Business and Labor Committee during the interim.
Obtained Workers’ Compensation Case Waivers
Senate Bill 75 creates a path in which a waiver or reduction in penalty may be given to an employer for conducting business without securing workers’ compensation benefits for the employer’s employees. In the future, one-stop shop legislation will solve this problem. Currently, the process of starting a new business is so confusing that many new businesses run the risk of missing one step or another in creating a new business. This bill allows for a one-time-only wavier or reduction in the fee for overlooking workers’ compensation for employees. NFIB supports this because when you are a new business, you might not have all the information at your fingertips to make sure the business is complying with all state laws. SB 75 was signed into law.
Won Greater Clarification on Municipal Business Licensing
Senate Bill 158 is a clarification needed on legislation passed last year that prohibited a city to require a business license for a home-based business if that business had minimal impact on their neighborhood. Senate Bill 158 provides that a municipality is allowed to charge a business license fee to a business when an otherwise exempt business owner requests a license. The concern here was created when some small businesses claimed that even though they fit into the exempt category that doesn’t require a business license, they needed a business license to comply with state and federal laws regulating their specific type of business (example, gunsmith businesses are regulated federally and need to have a city business license in order to acquire a federal firearms permit.) NFIB supports this legislation and is encouraging lawmakers to stay on top of any additional burdens that cities place on truly small businesses that are unnecessary.
From the 2017 half
Won Clearer Regulatory Transparency
Of the 75 issues NFIB measures every four years and publishes in its Small Business Problems & Priorities report, “Unreasonable Government Regulations” came in second in 2016, a three-point jump from its fifth place in 2012. In a special poll just on regulations that NFIB conducted in 2017, it found that one-third of small employers have had a government official enter their place of business to inspect or examine their records and/or licenses or otherwise check on their compliance with some government requirement.
As part of its never-ending lobbying efforts to counter the debilitating effects of regulations, NFIB/Utah made passage of House Bill 272, sponsored by Rep. Brad Wilson, a top priority. The legislation, which passed the Legislature almost unanimously and was signed into law by Gov. Gary Herbert, will shed light on the rule-making process of government agencies.
This new law now requires:
- the Office of the Legislative Fiscal Analyst, when evaluating proposed legislation, to indicate whether the legislation would make changes in the regulatory burden for state residents or businesses
- state agencies, once legislation is passed, to analyze every possible means available to measure the effect of the new legislation before holding public hearings on proposed new administrative rules, to show the regulatory impact the rule would have on state residents or businesses
- the analysis to indicate whether each proposed rule will impact the regulatory burden and, if so, whether the impact increases or decreases the regulatory burden. It must also characterize whether the change in burden is high, medium, or low
- agencies to submit a summary of efforts made to comply with obligations to assure that new administrative rules minimize negative fiscal impacts on small businesses.
Secured Better Vetting of Ballot Measures Seeking Tax Increases
In another victory for transparency and forthrightness, NFIB supported the successful passage of House Bill 255, sponsored by Rep. Daniel McCay and Sen. Curt Bramble. Governor Herbert signed it into law.
To qualify an initiative for a statewide ballot in Utah, the initiative sponsors must gather signatures of registered Utah voters equal to 10 percent of all votes cast for president of the United States in the last General Election from each of at least 26 of the 29 state senate districts. In local elections, initiative sponsors must gather 10 percent to 30 percent of signatures of such votes cast, depending on the population of the local city or town.
HB 255 now adds an additional hurdle for statewide and local initiative sponsors seeking a tax increase at the ballot box. It requires that when an initiative or a petition for an initiative proposes a tax increase, the governor’s Office of Management and Budget must prepare an unbiased, good faith estimate of the fiscal impact of the law proposed by a statewide initiative. Similarly, for a local initiative, a local budget officer must prepare a similar report.
For statewide initiatives, sponsors must then hold seven public hearings throughout the state in specified districts. For local initiatives, similar public hearings must also be held. The bill’s sponsors proposed this measure to make sure that tax increases presented to Utah voters get a thorough vetting before they make it to the ballot box. It is intended to make sure that Utah continues to lead the nation in having well-thought-out tax policy.
Victories by Defeat
Four big victories for small business during the 2017 session came in the defeat of four measures, ones that would have imposed costly, time-consuming mandates. They were:
- House Bill 147, Living Wage Amendments, by Rep. Lynn Hemingway—Back for a fourth time in as many years with a few slight changes, none of which would have helped small businesses. HB 147 would have required that on and after July 1, 2017, and before July 1, 2018, the minimum wage to be $10.25 per hour. Further increases would have followed each year until the minimum wage reached $15 in 2022. Presently, the Utah minimum wage is $7.25 per hour. The bill also would have provided administrative rulemaking authority to establish a minimum hourly wage for minors that is different from the adult minimum wage and to change the minimum wage for tipped employees within the state to $5 per hour. NFIB/Utah succeeded in having the bill held in committee.
- House Bill 213, Workplace Discrimination Amendments, by Rep. Mark Wheatley—Would have limited the options for employers to address discrimination issues with employees, including the removal of mediation as an option to resolve disputes. Under this bill, employee discrimination charges would more likely need to go to court, resulting in higher costs for small-business defendants. NFIB was instrumental in getting this bill held in committee.
- House Bill 242, Family and Medical Leave Amendments, by Rep. Dixon Pitcher—Would have required an employer who employs between 30 and 49 employees to comply with the federal FMLA laws. Currently, only employers with 50 or more employees are required to comply with federal FMLA law. The 1993 federal law exempted smaller businesses from the law’s obligations, understanding that the burdens are too great for small businesses to absorb. NFIB/Utah worked with the sponsor to help him understand what this bill would require. Once he finally understood everything that was involved, he voluntarily held the bill.
- House Bill 153, Uninsured and Underinsured Motorist Coverage Amendments, by Rep. Michael Kennedy—Would have required employers to purchase uninsured and underinsured coverage for their employees who drive their own cars while working. Such a requirement would have unnecessarily increased costs for many small businesses. NFIB stood firm in helping defeat this unwise proposal.