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Much at Stake for Employers as Beacon Hill Completes Formal Session

Posted on July 28, 2014

statehousedomeBeacon Hill lawmakers enter the final week of the 2013-2014 legislative session today with plenty at stake for employers. A session that has already produced structural reforms to the Unemployment Insurance system and a $3-per-hour increase in the state minimum wage could produce even broader changes before formal sessions end on July 31.

Here is a summary of the major issues:

  • Non-compete agreements/non-uniform trade secrets act ” The Senate passed an economic development bill on July 1 that would prohibit employers from using non-compete agreements with hourly employees and limit the length of non-competes to six months. The House of Representatives omitted any restrictions on the use of non-competes from its version of the economic development bill. The Senate also adopted a version of the Uniform Trade Secrets Act that would make defense of intellectual property and trade secrets nearly impossible. A conference committee is hammering out the differences. AIM favors retaining the ability of employers to use non-compete agreements to protect intellectual property and innovation; the association has also urged conferees not to adopt the non-uniform version of the Trade Secrets Act. AIM views these two policy items as poison pills for the entire jobs bill.
  • R&D Tax Credit – AIM supports a proposal to expand the Research and Development Tax Credit by allowing employers the option to claim a credit equal to 10 percent of any research expenses that exceed a base amount calculated over a period of three years. Current law allows credits only for incremental R&D spending over a set base period in the 1980s. The Senate included the R&D credit expansion in its economic development bill while the House did not. Again, the conference committee will resolve the issue.
  • Clean energy resources and solar power ” The House Ways and Means Committee is reviewing two bills that provide enormous subsidies to special energy interests at the expense of commercial and residential ratepayers, especially low-income residents. Some sections of the bills were negotiated behind closed doors with little or no input from the impacted community and the costs have not been made public. Even the folks pushing Cape Wind want additional handouts ” yes it’s that bad. AIM opposes both proposals on behalf of employers.
  • Mandated paid sick leave ” AIM believes that legislation mandating paid sick leave in Massachusetts would stifle innovative employer benefit programs, reduce overall benefit levels for workers and prompt businesses to avoid creating new jobs. Mandated sick days proposals remain before the Legislature, while advocates have placed the question on the November statewide ballot.
  • Health Care ” Nine pending bills would add new, mandated benefits to health insurance premiums for small employers and their employees. Massachusetts currently has 38 state- mandated health insurance benefits that together add more than $1.4 billion in annual premium costs. The proposed mandates would add tens of millions more. Who pays? Federal law requires Massachusetts to pay for the cost of any new mandates enacted on or after January 1, 2012 but the state has not fulfilled this obligation. Look in the mirror to see who will foot the bill.
  • Human resources and labor law ” AIM remains concerned about proposals that would expand the treble damages law; define workplace bullying and comparable work; make it unlawful to consider height and weight when hiring; require employers provide full access to the emails of deceased employees to their decedents; and ban text messages to customers, even if the customer has signed up for such notfications.

Lawmakers will continue to meet informally through the end of the year, but controversial bills rarely gain approval during those sessions because the rules allow a single legislator to stop a measure with an objection.

“The Legislature has the opportunity to accelerate the pace of innovation and economic growth in Massachusetts by broadening the R&D tax credit and by preserving the current law governing non-compete agreements,” said Richard C. Lord, President and Chief Executive Officer at AIM.

“These are concrete steps that will jump-start job growth and increase economic opportunity for the citizens of Massachusetts.”