IN THIS ISSUE
This Week In Springfield, the second spring session of the 100th Illinois General Assembly got underway and Governor Bruce Rauner’s annual State of the State address was the feature event.
As required by the State Constitution, Governor Bruce Rauner delivered his fourth State of the State Wednesday to a joint session of the General Assembly. The Governor covered the expected themes including restoring the public trust and growing the economy and jobs.
In terms of restoring the public trust, the Governor focused on actions he took to ensure the agencies under this administration are more transparent and accountable when it comes to sexual discrimination, his desire to reform Illinois’ property tax assessment system, his call to prohibit legislators who are attorneys from practicing before property tax appeals boards, and enacting term limits.
When it comes to growing the economy, the Governor proposed reforming the state’s pension systems, controlling spending, investing in job training, and rolling back the recently enact income tax increase. The Governor also stated that he would present a balanced budget during his budget address scheduled for February 14th this year. Pointing to other similarly politically situated states, he encouraged Illinois to follow Rhode Island’s lead on pension reform, California’s lead on term limits, and Massachusetts’ lead on group health plans and workers’ compensation rates.
The Governor further used his time to highlight Illinois’ historic legacy of economic invention, highlighted Illinois’ strengths by noting Illinois graduates ten percent of the nation’s computer scientists and more engineers than MIT, Stanford, and CalTech combined.
As in other speeches, unity was another major theme of his address as it has been throughout his term. The Governor called on lawmakers to ‘bring Illinois back” by “rolling up their sleeves’ noting that restoring Illinois would take “a forget about the politics and roll-up-our sleeves kind of approach’. He likened restoring Illinois as a much bigger Amazon-like opportunity – referring to Illinois’ efforts to attract Amazon’s HQ2.
With an eye on re-election Governor Rauner touted his achievements which included putting 120,000 people to work, signing the Future Energy Jobs Act, supporting and encouraging entrepreneurship, cutting red tape on small businesses, increasing education funding, and criminal justice reform that he said has reduced the prison population by 15%.
In closing, Governor Rauner asked lawmakers to avoid partisan bickering and work in a bipartisan manner to improve the job climate in Illinois by continuing to cut regulatory red tape, cut state spending and roll back the tax increase that was passed over his veto just last year. Unshackled by these unnecessary burdens, Governor Rauner believes Illinois will become an economic leader by attracting talented workers and businesses back to Illinois
IRMA issued a reaction to the speech stating; “As we have throughout our history, IRMA stands ready to work with Governor Rauner and legislative leaders on both sides of the aisle to create policies that help Main Street retailers and restore Illinois’ stability and competitiveness, said Rob Karr, president & CEO, IRMA.”
The reactions to the Governor’s speech from the four legislative caucuses fell along party lines. The reaction of Republican leaders was supportive of the Governor’s call for cooperation and his ideas to promote growth in the state’s economy. The Democratic leaders took issue with many of the activities the Governor claimed as accomplishments arguing others had done them and noting that he hasn’t introduced a truly balanced budget since he’s been in office. Speaker Madigan suggested the Governor should continue to sit on the sidelines and pretend he’s not in charge (referring to a comment the Governor himself made several weeks ago) while legislators continue to work together. Senate President Cullerton questioned the sincerity of the Governor’s calls for bipartisan cooperation after three years of political attacks.
The State of the State speech, and the reactions to it, have all the appearances of everyone being in full campaign mode with the 2018 elections well underway undergirded by a lack of communication and trust. While we remain hopeful for bipartisan agreements on key issues affecting the state, it remains to be seen how that will happen in an election year dedicated to campaigns that will play to very different bases.
Despite the existence of a compromise already enacted in Massachusetts and supported in that state by the advocates and employers alike, the path of unnecessary conflict is being pursued in Illinois for no explainable reason.
HB 4163 (Rep. Anna Moeller, D-Elgin) seeks to prohibit an employer from asking job applicants their wage or salary history, increases penalties, and removes current statutory defenses to unequal pay claims. This bill is identical to legislation that was vetoed by the Governor last year and the veto was subsequently upheld when the Senate failed to override the veto with a vote of 029-017-001.
IRMA supports prohibiting employers from asking prospective employees about their previous salaries within the exemptions currently provided in the proposal. Those exemptions would allow asking about a previous salary if:
- the prospective employee’s wage, salary, or other compensation history is a matter of public record;
- the prospective employee is a current employee of the employer and is applying for a position with the same employer; and
- the prospective employee has voluntarily disclosed such information.
Additionally, IRMA supports prohibiting an employer from requiring an employee to sign a contract preventing the employee from talking about his/her own salary, prohibiting a human resources employee from releasing another person’s confidential employee information to other employees or other businesses without that person’s consent, and encouraging businesses to implement internal protocols to reduce and eliminate real wage disparities regardless of the form it may take.
IRMA does NOT support:
1. Removing, undermining, or weakening the four current statutory defenses to an unequal pay claim. Those statutory defenses are seniority, merit, and quality or quantity of production.
Every state allows these defenses and most have additional defenses. Courts have repeatedly upheld these defenses as legitimate business measures that protect and promote employees. HB 4163 prohibits an employer from using these common sense and practical measures as defenses if an employee can find any “alternative practice” used by any company in the United States for a similar job.
The proponents of the bill claim that the opponents and IRMA misinterpret the provision. Here is the language: “Such defense shall not apply if the employee demonstrates that an alternative employment practice exists that would serve the same business purpose without producing such differential and that the employer has refused to adopt such alternative practice.”
During the committee hearing, the proponents of the bill admitted that this would allow an employee to provide a different example and the company would have to accept it.
2. Including penalties in excess of the current statutory penalties that include compensatory damages, punitive damages, and special damages in addition to allowing the claimant to pursue a simultaneous federal claim, i.e. double dipping.
Why are excessive and redundant state and federal penalties required? What is wrong with the current statutory penalties?
According to substantiated verifiable numbers, the current statutory penalties have been proven to more than adequate deterrent as only 13 wage claims out of 266 claims in the last four years have proven to have any merit—a rate of 4.89%. Putting that into context 95% of wage claims have been found to have no merit. Businesses are spending more money defending against frivolous claims than actual unequal pay claims are awarded by the courts. Arbitrarily increasing the penalties would incentivize additional frivolous claims in the hopes of forcing a company to settle rather than go through a lengthy legal process.
The proponents have not offered any verifiable facts or statistics to the contrary. Nor have they offered any legitimate reasoning for the increased and excessive penalties. If less than 5% of all claims are found to have any merit and less than ½ of 1% of all Illinois businesses are found to have violated the statute why is there a need for these over-the-top penalties?
Reducing and eliminating wage disparity is a win for everyone. IRMA will support a clean bill that prohibits the question and encourages businesses to implement internal protocols to reduce and eliminate wage disparity without changing current penalties and current defenses. If compromise is a goal, the path is available.
BUSINESS DAY SPEAKER
Jim Vandehei, co-founder and CEO of Axios and co-founder and former CEO of POLITICO, will be keynote the opening luncheon of Business Day 2018 on Wednesday, May 9th in Springfield. In 2017, Vanity Fair listed Vandehei among the 100 most powerful ‘Information Age’ thinkers while Entrepreneur magazine named him one of 2017’s “50 Most Daring Entrepreneurs”. Exercising his entrepreneurial background and long history covering politics in Washington, D.C., Mr. Vandehei will pull back the curtain and address what audiences really need to know about the White House, Congress, politics, and the media. Mark your calendars now to attend Business Day 2018 on Wednesday, May 9th in Springfield!