Today’s global and highly competitive economic environment means that recruiting, training and continuously investing in employees is a top priority for most Kentucky companies.

The General Assembly must support employers who choose to invest in Kentucky’s workforce. Now more than ever, businesses must have the flexibility to manage their workforce needs within the confines of a job market that rewards higher skills and higher levels of dedication and commitment. Within this framework, the Northern Kentucky Chamber opposes state or local wage mandates that exceed federal requirements. When state or local governments attempt to mandate specific wages, benefits, safety regulations or other employment standards, the added cost of doing business decreases Kentucky’s competitiveness, particularly with our border states. The following issues are of particular concern, or opportunity, to Northern Kentucky employers.

Workers’ Compensation: A Perfect Storm Coming

Following significant and much needed reforms, Kentucky’s revised workers’ compensation laws have been successful in protecting the interests of truly injured workers, providing awarded benefits more quickly, and restoring competitive costs to employers.

At the same time, Kentucky’s current workers’ compensation statute includes a lifetime medical benefit, which represents an onerous financial liability on small and large businesses alike. According to the U.S. Dept. of Health and Human Services, Division of Vital Statistics, life expectancy for both sexes and all races continues to increase. Since 1970, life expectancy increased by more than 10%, with the average white female population expected to live past the age of 80, and there is no indication of declining life expectancy in females. Similarly, the life expectancy of all males, regardless of race, has risen from an average of 67.0 years to 77.2 years.

To the extent possible, Kentucky workers’ compensation must remain a statutory program, with limited case law application interpretations. Any statutory proposal for change should be fully supported by objective, thoughtful analysis, and not anecdotal or isolated occurrences.

Chamber Position:

The Chamber supports new legislation and modifications of current statutes that takes into consideration the increased life expectancy of the average worker and balances the interests of both the employee and the employer. We believe a thoughtful, careful review of the lifetime medical benefits component will result in significant reductions of workers’ compensation coverage. The current system requires Kentucky employers to establish large financial reserve funds to pay future medical benefits. A review of our adjoining states, such as Indiana and Ohio, require workers to re-qualify for medical benefits after 2 years and 6 years, respectively and these approaches have been met favorably by the employer as they do balance the interests of both parties. Another approach would be to terminate lifetime medical benefits when permanent partial disability ends, or when eligible for Medicare.

Enact Prevailing Wage Moratorium on All Education Projects

For decades, the Northern Kentucky Chamber of Commerce has supported a complete repeal of the prevailing wage law. In the current 2008-2010 biennium, it is apparent that there will be significant construction needs in both our K-12 school systems as well as our postsecondary institutions. Significant enrollment increases, in both our high school and postsecondary institutions are creating a strain on the Kentucky school system infrastructure.

ur Northern Kentucky strategic plan, Vision 2015, calls for our citizens to exceed national education performance standards at every level. In order for our 8-county region to meet that goal, massive expansion projects will have to be funded and constructed at both Northern Kentucky University and Gateway Community & Technical College, as quickly as possible.  

During the current biennium, it appears highly unlikely that city and county governments will be able to undertake new capital improvements, due to their heavy health insurance premiums, and soaring pension costs. While city and county governments may have legitimate capital projects needs, their construction will likely be delayed due to budgetary considerations.

Chamber Position:

For these reasons, the Northern Kentucky Chamber urges the 2009 General Assembly to enact a 3-year prevailing wage moratorium, beginning July 1, 2009, on all capital education projects in Kentucky.  During the moratorium period, we urge the Kentucky Dept of Labor and the Legislative Research Commission to undertake detailed studies of the cost savings, including opportunities to construct projects under a streamlined design-build process. At a time of unprecedented demands on state resources, the Chamber believes a fresh approach to this age old problem deserves serious consideration.

Uniform Statute of Limitations

Kentucky’s current five-year statute of limitations on employee wrongful termination and employment discrimination actions places an inordinate administrative burden on Kentucky employers.  Over the course of this five-year limitations period, witnesses may change their employment, relocate to another jurisdiction or no longer be available to provide testimony in defense or support of a pending lawsuit.  Moreover, the five-year limitations period (and subsequent period of discovery and litigation, which may last several additional years) may affect witnesses’ recollection of relevant facts and events and the availability of relevant documentary evidence.  Finally, a five-year statute of limitation subjects employers to an unreasonable period of exposure to potential wrongful termination/employment discrimination litigation.  

Chamber Position:

The Chamber supports changes to state statute that would limit the statue of limitations on wrongful termination and employment discrimination actions.  Specifically, the Chamber  supports changing Kentucky’s statute of limitations on wrongful termination and employment discrimination actions to two-years from the date of  termination or adverse employment action.  This change to the statue of limitations not only addresses the inordinate burden imposed on employers under the present five-year limitations period, it also makes Kentucky consistent with those jurisdictions that presently apply a two-year limitations period or less.

Collective Bargaining for Public Employees

On January 29, 2008, HB 403 was introduced to the House and, two days later, on January 31, 2008, was forwarded to the House Labor & Industry Committee.  As presently drafted, HB 403 creates new sections of KRS Chapter 336 to establish definitions and authorize collective bargaining for eligible public employees.  In addition, HB 403 creates a three-member, full-time State Employment Relations Board and authorizes that Board, among other things, to hire a staff of employees, create a bureau of mediation, conduct studies and hold hearings.  In addition to setting forth a statutory framework for public sector collective bargaining, HB 403 authorizes the State Employment Relations Board to enumerate and prohibit unfair labor practices and, in certain instances where impasse has been reached through collective bargaining, to submit unresolved issues to mandatory fact-finding. 

The definition of “public employer” contained in HB 403 includes, but is not limited to, “the state government or the government of any political subdivision of the state including any city, county, charter county, urban-county, consolidated local government, school district . . . or any other unit of government that is governed by elected officials, or by a board that is appointed by a public employer or public employers and that has the authority to hire and dismiss employees without the permission of the public employer.”

Chamber Position:

The Chamber supports and values the efforts and hard work of public employees throughout Northern Kentucky and believes that these employees should receive wages and benefits commensurate with their level of qualification, experience and job performance.  While the Chamber supports and values these public employees, it also recognizes that, at the present time, our Commonwealth is in the midst of a budget crisis that stretches to all levels and areas of State government.  The Chamber believes that the passage of HB 403, and the creation of a State Employment Relations Board, would create an additional and unnecessary level of government. 

Moreover, while the Chamber supports the payment of fair wages and benefits to public employees, it also recognizes that the collective bargaining process reduces an employer’s ability to seek creative solutions to challenges in tough economic times.  For these reasons, the Chamber believes that HB 403 is not in the best interests of the Commonwealth, Northern Kentucky or its membership and is thus opposed to its passage.