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Feb 08, 2019

An Eye On The Law

By: Allison Mann

The 66th Legislative Assembly of the North Dakota Legislature is now in session. It has begun the process of passing new bills that could have a profound effect on employment matters. This current legislative session is limited to 80 days; it began on January 3, 2019 and will end on April 30, 2019. If enacted into law, some of the proposed bills could have a major impact on business operations and employer-employee relations.

Monitoring these bills can help an employer anticipate potential changes it may have to make to policies, practices, and even operating budgets. At present, several of the newly proposed bills touch on hiring, days a business can be open, and changes to non-compete agreements. This month’s article will summarize a few of the bills of which to be aware.

A Bill Affecting Hours of Business Operation

House Bill 1097, the Blue Law repeal, seeks to repeal laws prohibiting certain businesses from opening between the hours of 12:00 a.m. and 12:00 p.m. on Sundays. In addition to repealing the existing Blue Laws, the bill contains a provision ensuring that business that choose to stay closed will not be required to be open on Sundays. It provides that lease agreements, franchise agreements, or any other contractual arrangements entered and executed before January 1, 2019 cannot require a business to be open on Sunday. On January 17, 2019, this bill passed the House, and was subsequently received by the Senate.

If passed in the Senate and enacted as law, more businesses will be able to open on Sunday mornings. This has the potential to increase operating budgets, and possibly profit margins. Also, with more employees going to work on Sunday mornings, the repeal of the Blue Laws may impact requests for leave for those attending Sunday church services. Affected employers may need to revisit employee leave policies to account for these requests for religious accommodation. It is also be advisable for affected businesses to revisit lease agreements, franchise agreements, and other contractual agreements pertaining to required hours of operation.

A Bill Affecting Corporate Tax Credits

House Bill 1235 proposes a tax credit for corporations that reimburse employees for child care expenses. The amount of the proposed credit will be equal to the amount of the reimbursements paid by the employer during the tax year. There is no limit on this credit in the proposed bill. This credit would provide a great incentive for employers to offer child care reimbursement to their employees as a benefit of employment. This benefit could reach beyond the monetary savings related to a tax credit. This type of benefit could prove useful in attracting a workforce that includes young people, and could help to retain employees that have recently started a family. The high cost of child care oftentimes becomes a factor in the decision to accept or retain a job. However, on February 5, 2019, the Finance and Taxation Committee recommended that this bill should not pass. It has not yet been voted on in the House.

A Bill Affecting Hiring Practices

House Bill 1282, is North Dakota’s take of the Fair Chance Initiative for Hiring (Ban the Box). Under this bill, a public employer cannot ask about or consider the criminal record or history of an applicant until the applicant’s interview. This bill is designed to give an applicant with a criminal history a better chance securing public employment. On January 24, 2019, this bill passed the House of Representatives, and was thereafter received by the Senate.

If enacted into law, public employers will be required to update their hiring policy manuals, and possibly re-train staff conducting such interviews on how deal with the new law. Private employers should also take note of this bill, though it does not immediately affect their practices. The immediate request for a criminal history can discourage otherwise qualified candidates from applying for a job. Additionally, the EEOC has made clear that refusing to hire any individual with a criminal history may be discriminatory under a disparate impact theory. Private employers would do well to assess their use of criminal history information in the hiring practices to ensure that all employment decisions are being based on job related factors consistent with business necessity.

A Bill Affecting Unemployment Insurance Contributions

North Dakota employers pay into the state unemployment insurance trust fund. When claimants file for unemployment benefits these are paid from the trust fund, charging the accounts of liable employers. House Bill 1060 proposes to apply a surcharge to the accounts of employers whose unemployment benefit payouts to employees exceed the employer’s contributions for that year. For example, a construction company that has frequent layoffs during the off season may have several employees receiving unemployment insurance benefits. If these benefit payouts exceed the employer’s contribution for the year, then the company could face a large surcharge.

On February 4th, 2019, this bill was amended to add a rate gradient to the surcharge, with the surcharge beginning at three percent and capping at ten percent. If enacted into law, an employer that exceeds its cumulative contributions could face a potentially costly surcharge.

The Takeaway:

It is a good idea to keep abreast of the new bills during the current legislative session. Monitoring the passage of bills affecting employment matters is a proactive way for employers to identify policy updates they may need to make if the bills become law. Several of these proposed bills may implicate changes to hours of operation, hiring, employee training, and leave policies. The bills discussed above a just a sampling of potential legislation affecting North Dakota businesses. It is recommended that competent counsel be consulted in the event you have any questions regarding how any proposed legislation may implicate your business practices.

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I make a serious effort to be accurate in my writings. These articles are not exhaustive treatises, though, so do not consider them complete or authoritative. Providing this information to you does not create an attorney-client relationship with my firm or me. Do not act upon the contents of this or of any article on our homepage or consider it a replacement for professional advice.

Reprinted with permission from an article submitted for publication in the February, 2019 Southwest Area Human Resource Association newsletter.