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'Business Friendly' Bills Making Their Way Through Kentucky House

Legislative Research Commission

The Kentucky House this week has taken up two bills widely characterized as business friendly but not necessarily worker friendly.

Jobless benefits for out-of-work Kentuckians would end much sooner under a bill advanced by Republican lawmakers on Thursday.

The length of jobless benefits would become tied to the statewide unemployment rate under the bill advanced by the House Economic Development and Workforce Investment Committee. Laid-off workers would get benefits for 16 weeks if the bill becomes law, based on the latest jobless rate. Benefits currently are paid up to 26 weeks.

The measure also would raise the threshold for eligibility and would freeze the maximum weekly benefit until neighboring states, on average, meet or exceed Kentucky's amount.

Opponents said the changes would hurt people already struggling, especially in areas such as the eastern Kentucky coalfields where job prospects are limited.

"When we have counties in our commonwealth that are some of the poorest in the entire United States, it is a shame for us to be cutting benefits for workers that are laid off through no fault of their own," said state AFL-CIO President Bill Londrigan.

The bill's supporters included an official from Republican Gov. Matt Bevin's administration. They said the changes would be another incentive for laid-off workers to find new jobs quickly.

"We want to put a target out there that will move people into the workforce, but in a fair way," said Brad Montell, deputy secretary of the Education and Workforce Development Cabinet.

Kentuckians on average receive jobless benefits for about 19 weeks. During the third quarter of 2017, only one state exceeded the length of time that Kentucky paid in jobless benefits, according to Republican Rep. Jim DeCesare, the bill's main sponsor.

Speaking against the measure, Democratic Rep. James Kay of Versailles said he relied on unemployment benefits after he lost his job at a law firm due to the Great Recession.

He called it a "humbling time," and urged his colleagues to consider the impact of shortening the length of benefits on younger workers with short resumes and student loan debts.

"That unemployment insurance helped me pay my student loans and not go into default," he said.

Unemployment benefits are funded with a tax paid by Kentucky employers. Montell told the committee that the tax is "fairly well in line" with other states.

Under the bill, the length of benefits would grow incrementally as the state jobless rate increases. The 16-week minimum would apply if the statewide rate is 5.9 percent or lower. The maximum would be 26 weeks of support if unemployment is 9 percent or higher.

In December, Kentucky's seasonally adjusted, preliminary jobless rate was 4.4 percent.

The bill also would raise the minimum salary someone previously had to earn to qualify for benefits. Now, a worker must have made at least $750 in their best quarter. The bill would raise the amount to $1,500. The amount would be adjusted in future years based on inflation.

That change, the bill's opponents said, would punish low-wage workers, and would prevent some people from qualifying for benefits.

The bill also would freeze the maximum weekly unemployment benefit at $448 until surrounding states, on average, meet or exceed Kentucky's amount.

The freeze would essentially erode benefits over time, critics said. Londrigan said Kentucky should embrace having more generous benefits than many of its neighboring states.

"We ought to be proud of the fact that we're helping them put food on the table during difficult times," he said.

The Kentucky House voted Wednesday to make the biggest changes to workers' compensation in decades, including putting time limits on benefits for some injured workers.

A key part of the measure would place a 15-year cap from the date of injury. It would apply to workers filing claims for permanent, partial disability because of on-the-job injuries. Currently, they are entitled to medical benefits for the duration of the disability.

Many of those workers eventually return to the labor force, but opponents of the cap say those injuries can result in nagging medical problems that need attention far beyond 15 years.

Before passing the bill, the House amended it to allow those injured workers to make recertification filings that, if approved, would let them continue receiving medical benefits.

The bill passed the Republican-led House on a 55-39 vote. Several GOP members, mostly from eastern Kentucky, voted against the measure, while a couple of Democrats supported it.

The bill, which now heads to the Senate, provoked a long and sometimes testy House debate. Supporters said the measure would enhance Kentucky's business competitiveness. Opponents said there's no justification for the changes because workers' compensation insurance premiums paid by the state employers have been dropping.

"This bill is about greed," Rep. Al Gentry said.

Gentry, who lost an arm in an injury years ago, said the 15-year cap on medical benefits was unfair to injured workers. He said some will need medical treatment years after that.

"And at that time, the burden of this medical liability will have been shifted directly back to them," the Louisville Democrat said. "And if they're on Medicare or Medicaid at the time, it's directly shifted back to the taxpayer."

They'll also shoulder the costs of trying to win the extended medical benefits through the recertification process, Gentry said.

Rep. Adam Koenig, the bill's lead sponsor, said workers still receiving treatment or having a reasonable expectation of needing future treatment would be eligible for the extended benefits.

Supporters said the bill offers welcome relief for smaller businesses paying workers' comp insurance. The bill is backed by business groups but opposed by organized labor groups.

"I feel like that we have to do things to allow us to be more competitive with surrounding states," Republican Rep. Matt Castlen of Maceo said.

"Without Kentucky businesses, we don't have Kentucky jobs," he added.

Republican Rep. Diane St. Onge of Fort Wright said prospective employers considering a move to Kentucky "look to see what the workers' comp laws are."

Under the bill, the most severely injured workers — considered permanently, totally disabled — would still receive lifetime medical benefits, said Koenig, a Republican from Erlanger.

Koenig said the change would not apply to people now receiving workers' comp benefits. It would affect future cases stemming from workplace injuries.

An attempt to rewrite the bill failed. Republican Rep. Jill York said her amendment included no caps on medical and disability benefits and increased benefits for injured workers.

It also would have allowed police officers, firefighters and other first responders to receive medical and disability benefits for psychological problems caused by on-the-job stress.

Other parts of the bill that passed would:

— Increase the state average weekly wage.

— Put a time limit on the ability of injured workers to reopen a claim.

— Terminate indemnity benefits at age 67 or two years after an injury, whichever is later.

— Increase the cap on attorneys' fees from $12,000 to $18,000.

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