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Legislative Earthquake in Frankfort

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Kentucky Governor Matt Bevin and the Kentucky General Assembly wasted no time in putting the new Republican majority in the Kentucky House to use in the 2017 Legislative Session.  Part I of the regular session began January 3.  By January 9 the General Assembly passed, and the Governor signed, three major pieces of employment legislation that will have significant impacts on Kentucky’s employers and workers.

Right to Work

House Bill 1 was Kentucky’s Right to Work bill.  The Right to Work Act provides that labor agreements may not require an employee to 1) “become or remain a member of a labor organization,” or 2) “pay any dues, fees, assessments, or other similar charges of any kind or amount to a labor organization,” or 3) “pay to any charity or other third party, in lieu of these payments, any amount equivalent to or pro rata portion of dues, fees, assessments, or other charges required of a labor organization.”  The Act does not apply to “any agreement … entered into before [January 9, 2017], but … shall apply to any new contract or an extension or renewal of any existing agreement entered into on or after [January 9, 2017].” It remains to be seen whether a reopener during the term of a labor agreement would constitute an extension or renewal of an existing agreement, and it may depend upon the language of the particular agreement and the circumstances of the reopening.

Paycheck Protection Act

Senate Bill 6 was the Kentucky Paycheck Protection Act.  This legislation provides that employees must expressly “opt in” to have union dues withheld from their paychecks, rather than “opt out.”  However, the Paycheck Protection Act excludes from coverage, and therefore does not confer any rights upon, employees “covered by the Railway Labor Act and the National Labor Relations Act.”  Moreover, as with the Right to Work law, the Paycheck Protection Act does not apply to any agreement entered into prior to January 9, 2017.  It does apply to “any such agreement entered into, opted in, renewed, or extended on or after” January 9, 2017.

Repeal of Prevailing Wage

House Bill 3 was a bill repealing Kentucky’s prevailing wage law, which required wages paid to workers on public projects (like constructing schools or roads) be set at “prevailing rates” for labor in the area.  This has typically meant union scale, and studies have estimated that paying prevailing wages inflated the cost of Kentucky government projects by more than 20%.

Each of the three statutes contained “emergency” clauses, meaning they went into effect immediately upon being signed by the Governor.  Governor Bevin signed all three bills on January 9, 2017 and they are now the law in Kentucky.  These are certainly interesting times.

If you have questions about how this new legislation will impact your business, please contact Chris Slaughter or Mauritia Kamer.

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