The Indiana General Assembly recently concluded its 2015 Session. While the RFRA controversy stole the spotlight for this Session, our legislators were hard at work amending existing laws and creating new ones. Out of the 1237 bills introduced this Session, the General Assembly passed 263 into law, several of which touch and concern HR matters. Here’s an overview of HR related legislation for private employers passed into law by the 2015 Indiana General Assembly:
Worker’s Compensation (Senate Bill 33, Public Law 225-2015)
This bill amends current worker’s compensation law so that an officer of a corporation who is also an owner may choose to not be considered an employee for the purposes of worker’s compensation. The bill also “urges” that the 2015 interim study committee on employment and labor review the issue of worker’s compensation reimbursement to all providers of worker’s compensation related claims outside of hospitals, including the study of a common baseline of the providers’ Medicare reimbursement rate plus a reimbursement above the Medicare level, seeking “fair reimbursement,” with a final report due by November 1, 2015.
This bill amends Indiana Code § 22-3-6-1 and § 22-3-7-9 and is effective July 1, 2015. It was signed into law by Governor Pence on May 7, 2015.
Voluntary Veterans’ Preference Employment Policy (Senate Bill 298, Public Law 205-2015)
Private employers may voluntarily implement a written veteran’s preference employment policy that gives preference for hiring, promotion, or retention during a reduction in force to veterans over other qualified applicants or employees. The policy must be uniformly applied to all employment decisions regarding hiring, promotion, or retention during a reduction in force. Granting preference under a qualified policy does not violate any local or state equal employment opportunity laws [Note that federal equal employment opportunity laws are not included here, but see the EEOC Policy Guidance on Veterans’ Preference for information about how federal laws might apply to these kinds of policies]. However, any such policy cannot be applied to or abrogate a collective bargaining agreement in effect before the policy was adopted or interfere with an employer’s obligations under the federal National Labor Relations Act (NLRA) or the federal Uniformed Services Employment and Reemployment Act (USERA).
“Veteran” for purposes of this law means anyone who has served in the U.S. armed forces or reserves or the Indiana Army or Air National Guard and was released from active duty under conditions other than dishonorable. The employer may require the veteran to submit a U.S. Department of Defense Report of Separation form (DD 214) to be eligible for the preference. The Indiana Department of Veterans’ Affairs shall assist a private employer in determining if an applicant is a veteran, consistent with applicable privacy laws.
This bill adds a new chapter to the Indiana Code at § 10-17-15 and is effective July 1, 2015. It was signed into law by Governor Pence on May 5, 2015.
Common Construction Wage (House Bill 1019, Public Law 252-2015)
This bill repealed the common construction wage. The common construction wage applied to rates of pay for skilled labor, semi-skilled labor, and unskilled labor paid by employers awarded contracts for certain public works construction projects. The rates were set by a complex committee process. The committee consisted of one person from labor, one person from industry, one person named by Associated Builders and Contractors, one taxpayer chosen by the owner of the project, and one taxpayer chosen by the local county government. Under the repeal and new law, a public agency may not establish, mandate, or otherwise require a wage scale or schedule for certain public works contracts, expect as other federal or state law may require.
The bill makes additional changes, including the following: a contractor that enters into a public works contract with an estimated cost of $150,000.00 or more must complete at least 15% of the work – measured in dollars of the total contract price – with its own workers (this was changed from 20%). If the estimated cost of a public works project is less than $300,000.00, it may be performed without awarding a public works contract (this was changed from a $150,000.00 maximum) – referred to as the “small project cap.” The bill also sets up a contractor tier structure for public works projects (general contractor, subcontractor, sub-subcontractor, and so on) with certain requirements for the minimum percentage of work that must be performed by the general contractor, general liability insurance requirements, qualification requirements, and employment practices requirements (E-verify, method of payment, Fair Labor Standards Act compliance, training, records retention, worker misclassification, etc.). Employee drug testing requirements apply if the estimated cost of the project is $150,000.00 or more.
The bill also makes it a crime (Class A misdemeanor Workers Compensation Fraud) to falsely classify an employee as an independent contractor, sole proprietor, owner, partner, officer, or member of a limited liability company with the intent to avoid worker’s compensation coverage.
Before July 1, 2021 the Indiana Department of Labor is required to submit to the Indiana General Assembly a report concerning the effects of the repeal of the common construction wage, including the effect on the cost of public works projects, the wages paid on public works projects, and the number of Indiana residents working on public works projects.
Finally, the bill grants $2,000,000.00 to the Indiana Construction Roundtable Foundation for use in conducting an educational marketing campaign in Indiana to promote employment opportunities in Indiana for skilled construction craft professionals and to attract individuals to become craft professionals in the Indiana construction industry.
This bill amends Indiana Code § 4-13.5-1.5-13, § 4-13.6-2-4, § 4-13.6-4-10, § 4-13.6-5-4, § 4-13.6-8-8, § 5-1-16-45, § 5-1-17-18, § 5-16-1-1.5, § 5-30-6-4, § 8-1.5-2-27, § 8-15.5-6-2, § 8-15.7-6-2, § 8-24-9-1, § 16-22-6-37, § 16-22-7-42, § 22-1-1-16, § 22-5-1.7-2, § 22-5-1.7-7, § 22-5-1.7-8, § 22-5-1.7-12, § 22-5-1.7-13, § 22-5-1.7-14, § 22-5-1.7-15, § 36-1-12-3, § 36-1-12-15, § 36-1-12.5-5, § 36-7-12-20, § 36-7.5-2-8, § 36-7.5-4-3, § 36-7.6-2-13, § 36-7.6-4-3, and § 36-9-23-2, adds new chapters to Indiana Code at § 5-16-7.1, § 5-16-7.2, § 5-16-13, § 5-16-14, § 5-30-8-7, § 5-32-1-4, § 22-5-1.7-6.2, § 22-5-1.7-6.4, § 22-5-1.7-11.1, § 35-43-5-21,§ 35-52-5-9.5, and § 36-1-12-24, and repeals Indiana Code § 5-16-7, § 5-23-3-3, § 5-23-4-2, § 5-30-8-6, § 35-44.2-3-4, § 35-44.2-3-5, § 35-52-5-8, and § 36-7-14-12.3. It is effective July 1, 2015 but the repeal does not affect contracts awarded before that date. It was signed into law by Governor Pence on May 6, 2015.
Protective Orders and Employment (House Bill 1159, Public Law 182-2015)
Under this bill, an employer may not terminate an employee because the employee filed a petition for protective order or for the actions of an individual from which the employee is seeking protection. However, the employer is not prohibited from changing the location of the employee’s employment, the employee’s compensation or benefits, or a term or condition of employment as long as the employee agrees to the change.
This bill adds a new chapter to Indiana Code at § 22-5-7 and is effective July 1, 2015. It was signed into law by Governor Pence on May 5, 2015.
Unemployment Insurance (House Bill 1186, Public Law 183-2015)
This bill makes changes to how certain portions of the unemployment insurance surcharge is taken into account when calculating each employer’s share of benefits charged to the benefit fund (subtracted from total amount of benefits rather than proportionately credited to each employer’s experience account).
The bill also states that if Workforce Development makes an overpayment to an individual, it has four years from the date of overpayment establish that the overpayment was made and in what amount and the individual must pay back the overpayment. Workforce Development can collect this overpayment via payroll withholdings required by the employer. If such withholding is required, Workforce Development must give notice to the individual employee containing specified information and a notice to the employer containing specified information. The employer notice is binding on the employer. If an employer receives such a notice, it must verify the individual’s employment to Workforce Development, withhold from the employee’s pay an amount subject to the limitations and priorities established by the garnishment laws (Indiana Code § 24-4.5-5-105) beginning with the first pay period after notice is received (but not more than 14 days after the notice is received), remit that amount to Workforce Development by check or electronic payment within seven days of each regularly scheduled payday, and continue withholding until Workforce Development gives notice to stop or the amount is paid in full as indicated by a written statement to the employer from Workforce Development. Refusal to withhold income or knowing misrepresentation of the employee’s income makes the employer liable for the amount that was not withheld and subject to a $1,000.00 penalty for each pay period for which funds were not withheld or income was knowingly misrepresented. The employer must notify Workforce Development if the employee’s employment terminates, with a last known address and the name of any new employer, if known. The employer is prohibited from refusing to hire an applicant, discharging an employee, or taking disciplinary action against an employee because of this withholding requirement. An employee may sue the employer if s/he believes adverse employment action was taken against him or her because of the withholding requirement and the employer may be ordered by the court to hire or reinstate the individual and fine the employer up to $1,000.00. The employer is not liable for complying with a withholding notice and is not liable to the employee for the amount withheld.
Finally, the bill “urges” that a summer study commission be established to study fraud and benefit overpayments occurring in Indiana’s unemployment insurance programs, with a final report due no later than November 1, 2015.
This bill amends Indiana Code § 22-4-10-4.5, § 22-4-11-2, § 22-4-13-1, § 22-4-14-5, § 22-4-15-1, § 22-4-15-2, and § 22-4-35-2, adds new chapters to the Indiana Code at § 22-4-13.3 and § 34-30-2-87.4, and repeals Indiana Code § 22-4-13-4. It is effective July 1, 2015. It was signed into law by Governor Pence on May 5, 2015.
Wage Payment and Wage Assignment (House Bill 1469, Public Law 193-2015)
This bill changes the damages available to an employee that is still employed or voluntarily terminates his/her employment in the event that the employer fails to pay wage due. Under the previous version of the Wage Payment law, the employer was liable for the amount due, a penalty amount of 10% of the amount due for each day it remains unpaid up to twice the amount due (i.e. treble damages), and reasonable attorney fees and costs, regardless of the reason for non-payment. Under the amended law, the employer is now only liable for the amount due plus reasonable attorney fees and costs in all cases, but only if the employer fails to pay in bad faith, is it liable for twice the amount due as a penalty. Note that this does not apply to Wage Claim actions, which is for employees whose employment involuntarily terminated.
In addition, this bill adds categories of charge that may be withheld from an employee’s paycheck, including: goods or food offered by the employer and sold to the employee for the employee’s benefit, use, or consumption at the written request of the employee; purchase of uniforms and equipment necessary to fulfill the duties of employment not to exceed the lesser of $2,500.00 per year or 5% of the employee’s weekly disposable income; reimbursement for education or skills training unless provided in whole or in party through an economic development incentive from any governmental program; and payroll or PTO advance. The interest rate charged on amounts loaned or advanced to the employee may not exceed the prime rate plus 4%.
This bill amends Indiana Code § 22-2-5-2 and § 22-6-6-2 and is effective July 1, 2015. It was signed into law by Governor Pence on May 5, 2015.
In addition to the bills listed above, the Indiana General Assembly passed the Religious Freedom Restoration Act (Senate Bill 101, Public Law 3-2015) and its “clarifying” amendment (i.e. the “Fix”) (Senate Bill 50, Public Law 4-2015). For more information on this law, see Indiana RFRA – What does it all mean?.
The Indiana General Assembly is scheduled to conduct a technical correction session on June 8, 2015 to address any necessary administrative matters. Otherwise, the 2015 Indiana General Assembly Legislative Session has now concluded. If you have any concerns, comments, or suggestions for your Indiana state legislators, the best time to contact them is during the summer and before the 2016 Legislative Session begins in January of next year. More information about contacting your Indiana state legislators can be found at www.iga.in.gov. Please contact any member of the IndySHRM Legislative Affairs Committee for more information and suggestions about how to engage your legislators.
Additionally, please join IndySHRM on June 4, 2015 for our annual Legislative Wrap-Up luncheon: Why the 2015 Indiana State Legislative Session Matters to You. This promises to be a lively discussion of the 2015 Indiana General Assembly by our scheduled guests John Ketzenberger (veteran Statehouse reporter and current President of the Indiana Fiscal Policy Institute, who will serve as our panel moderator), Senator Jim Merritt (Senate District 31), and Representative Ed Delany (House District 86). Information on registration can be found here. We hope to see you there!
This article is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or how the law applies to you.
About the Author
Sara Blevins is a partner at Lewis & Kappes, P.C. where she practices employment law and general civil litigation. She can be reached at sblevins@lewis-kappes.com or (317) 639-1210. Sara serves on the IndySHRM Legislative Affairs Committee.