Wyatt Employment Law Report

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Lexington-Fayette Urban County Council Proposes Minimum Wage Increase

By Courtney Ross Samford

Last week, the Lexington-Fayette Urban County Council joined a growing list of U.S. cities and local governments that are considering an increase in the minimum wage from $7.25 per hour to $10.10 per hour. If enacted, the proposed plan would take effect over the next three years and is expected to impact more than 31,000 employees in Fayette County who earn less than $10.10 per hour.

The Lexington-Fayette Urban County Council proposal is similar to a measure that was recently enacted by the Louisville Metro Council in 2014, which will minimum-wagesincrease the minimum wage from $7.25 per hour to $9 per hour by 2017. Louisville was the 12th U.S. city to raise its minimum wage in 2014.

The Kentucky General Assembly is considering a state-wide increase in the minimum wage to $10.10 per hour over the next two years, but many forecasters are doubtful that the bill will pass. A similar bill failed in the Kentucky Senate last year.

Currently, twenty-nine states and the District of Columbia have minimum wages that are above the $7.25 federal minimum wage. The minimum wage in California, Connecticut, District of Columbia, Massachusetts, Oregon, Rhode Island, Vermont and Washington is $9 or higher.

While it’s difficult to anticipate which city, local government or state will be next, it’s clear that the minimum wage movement is gaining momentum. Employers must pay close attention to similar proposals in their area and be prepared to respond to the evolving environment.


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Kentucky Legislature Amends the Unemployment Compensation Law

 By Sean G. Williamson*

Recently, the Kentucky General Assembly amended the Unemployment Compensation law in several respects.

KRS 341.415(1) outlines the procedures for recovery and subsequent disposition of improperly paid unemployment compensation benefits.  Act of Mar. 21, 2013, 2013 Ky. Laws Ch. 45, § 1(1) (HB 102).  Unemployment compensation benefits may be improperly paid because the recipient failed to fulfill a condition, became disqualified, or obtained an award of back pay.  Id.  KRS 341.415(1) further provides that upon collection of these improper benefit payments, any amount collected shall be credited to the “pooled account” or the account of the “appropriate reimbursing employer.”  Id.

During the 2013 Regular Session, the General Assembly added a caveat to the foregoing procedures for disposition of recovered benefit payments.  Id.  Now, when improper benefit payments are recovered, the account of the appropriate reimbursing employer will not be credited if it is determined that the improper payment occurred as a resulted of that employer’s fault under the amended KRS 341.530(4).  Id.; see Id. § 2(4) (stating the circumstances in which an employer is at fault for the improper payment of benefits).  Instead, the recovery will be contributed to the pooled account maintained by the Education and Workforce Development Cabinet.  Id. § 1(1).

Also, the General Assembly created a new subsection (6) in KRS 341.415.  Id. § 1(6).  Subsection (6) now penalizes recipients who obtain unemployment compensation benefits “as a result of false statement, misrepresentation, or concealment of material information.”  Id.  The penalty is calculated as 15% of the amount of the improperly paid benefits, id., and is collected in the same manner as all other improperly paid benefits under KRS 341.415, id. § 1(3), (6).  The preexisting subsections of KRS 341.415 were renumbered to accommodate this change.

The General Assembly created two new subsections in KRS 341.530 concerning improperly paid unemployment benefits by reason of the employer’s fault.  Act of Mar. 21, 2013, 2013 Ky. Laws Ch. 45, § 2(4)–(5) (HB 102).  First, the amended KRS 341.530(4) states that the reserve account of a contributing employer shall not be relieved of any charges relating to an improper benefit payment to a worker if:  (1) the improper benefit payment was made because the employer “fail[ed] to respond timely or adequately to a request of the secretary for information relating to the claim for benefits” and (2) the employer “has a pattern of failing to respond timely or adequately to requests.”  Id. § 2(4)(a)–(b).  A “pattern of failing” means that the employer failed to respond “timely or adequately” at least six times in one year or failed to respond to 2% of such requests in one year, whichever is greater.  Id. § 2(4)(b).  The new KRS 341.530(4) applies to improper benefit payments that occur after October 21, 2013.  Id. § 2(4).

Second, the amended KRS 341.530(5) establishes the notification procedure for determinations made under subsection (4).  Id. § 2(5).  Notice of the determination will be sent to the last known physical or electronic address of the employer.  Id.  The determination may be appealed in accordance with the provisions of KRS 341.420(2).  Id.  In response to the addition of these two new provisions, the legislature renumbered the statute’s preexisting subsections.  Id. § 2.

Only minor alterations to KRS 341.550 were made, making the provision compatible with the more extensive amendments to KRS 341.415 and 341.530.  Act of Mar. 21, 2013, 2013 Ky. Laws Ch. 45, § 3(2) (HB 102).  The legislature inserted cross-references in KRS 341.550(2) to ensure that the pooled account incurred no charges based on improper benefit payments as a result of employers’ fault and to prevent employers’ accounts from being credited with the recovery of such payments.  Id.

*Mr. Williamson is a Summer Associate at Wyatt, Tarrant & Combs, LLP.