WSLC 2007 Legislative Report

TABLE OF CONTENTS

Family leave passes:
Historic legislation grants new parents paid leave
Health Care Fairness:
Large-employer cost shifting to be studied
State employees:
Contracts funded, but pension gainsharing nixed
President's column:
You -- not pundits -- will decide who wins, loses
Agency fee rules:
Accounting rules for nonmembers clarified
Workers' comp:
Value of hour banks restored, and more

This is an abbreviated version of the 2007 WSLC Legislative Report. Members of affiliated unions can request a free printed copy, which includes reports on health care, collective bargaining rights, unemployment insurance, crane safety, and much more.

No worker should have to choose between supporting unionization and losing his or her job. But there is growing public recognition that Americans have lost the freedom to choose whether they want a union. Outdated labor laws are weakly enforced and employers illegally harass, intimidate and fire workers who support unionization, and do so with impunity.

The new Democratic majority in Congress has made labor law reform a priority. The U.S. House passed the Employee Free Choice Act to reform federal labor laws and restore the freedom to choose unions (although Republicans later blocked a Senate vote).

States, however, are restricted from passing legislation to strengthen worker rights regarding unionization. But there is still plenty that they can do to discourage the illegal suppression of unions.

This legislative session, an effort to create accountability among recipients of the biggest tax break in state history evolved into comprehensive legislation covering all employers. The Aerospace Incentive Accountability Act would have required union neutrality among this tax break’s recipients and the Worker Freedom Act would have banned one of the most notorious methods used by unscrupulous employers to prevent unionization. Although neither was voted upon, hearings exposing illegal union-busting activities were eye-openers for many legislators. Next year, the Washington State Labor Council and its affiliated unions will make this issue one of its highest priorities.

AEROSPACE INCENTIVE ACCOUNTABILITY ACT -- International Association of Machinists District 751, with the support of the Society of Professional Engineering Employees in Aerospace/IFPTE 2001 and other unions, backed HB 1828 and SB 5700 to require union neutrality among employers that receive aerospace tax breaks. Boeing and its growing number of contractors share in the biggest tax incentive in ~~state~~ U.S. history -- $3.2 billion over 20 years. But those incentives, which were supported by the unions representing Boeing workers, are going to companies that are now aggressively fighting attempts by their employees to form unions.

"After being targeted as a union sympathizer... (management) created a dismal work environment and everyone was scared to continue efforts to unionize" said Juan Martinez of Goodrich ATS, a Boeing contractor. "The NLRB... found the company to be guilty of three (unfair labor practice) violations. Goodrich just got a slap on the hand."

He asked House Commerce & Labor Committee members, "How can you justify my tax dollars going toward companies that treat their workforce like this?"

The effort was later refined into HB 2351, which restricted employers who want this subsidy from forcing their employees to attend meetings where they are lectured about religion, politics or unions.

Such meetings are routinely used to subject workers to anti-union indoctrination and intimidation. Under the bill, employers could still express their views about unionization and conduct such meetings. HB 2351 would simply grant employees the ability to walk away from such meetings -- which have nothing to do with work or job performance -- without fear of retribution. If employers force employees to attend such meetings, they would sacrifice their special tax subsidy.

Majority should rule among state employees

This year, Oregon’s legislature passed a law allowing their state employees to win union certification if they submit cards supporting representation from a majority (more than 50%) of workers in the proposed bargaining unit. New York, New Jersey, Illinois and other states have similar laws.

In Washington state, the Public Employment Relations Commission set a "cross-check" certification bar at 70%. So this year, legislation was proposed to eliminate PERC red tape and make it easier for unrepresented state employees who want to win union contract rights.

HB 1913 and SB 5772, sponsored by Rep. Steve Conway (D-Tacoma) and Sen. Jeannie Kohl-Welles (D-Seattle), were the public employee "majority-rule" union certification bills. Although both bills passed their respective labor committees, neither received a floor vote before the cutoff deadline.

"This is common sense. If a majority of employees want to form a union, the State of Washington should respect that choice," said WSLC Secretary-Treasurer Al Link.

WORKER FREEDOM ACT -- HB 2383 would have broadened this employer-indoctrinization restriction to cover all employers in Washington, whether or not they accept tax incentives, but its late introduction hampered its ability to make it through the legislative process in 2007.

"Union organizing is the labor movement’s life blood," said WSLC President Rick Bender. "But right now that blood is poisoned and workers’ freedom of association is being denied. As it so often does, Washington state needs to show leadership for the rest of the nation on restoring the freedom to choose unions. That’s why this will be a major priority for us in the 2008 legislative session."

The House, Senate and Gov. Chris Gregoire all stepped up this session to approve historic legislation that will make Washington just the second state in the country to grant workers paid family leave.

Beginning in 2009, all Washington workers can receive up to five weeks of partial wage replacement at a stipend of $250 a week -- pro-rated for part-timers -- upon the birth or adoption of a child into their families. The bill, SB 5659, was sponsored by Sen. Karen Keiser (D-Des Moines); the House version was sponsored by Rep. Mary Lou Dickerson (D-Seattle).

The federal Family and Medical Leave Act, which only covers employers with 50 or more workers, ensures workers may take up to 12 weeks of unpaid leave for birth, adoption or serious illness. The key issue here is job security.

But the majority of workers in this state aren’t covered by the FMLA and, even if they are, more than half of Washington workers get no sick leave. That means they can’t afford to take the time off that they should to bond with their new babies and make the critical transition to parenthood. SB 5659 gives them that opportunity.

"This bill gives parents the opportunity to bond with their newborn or newly-adopted child," Gov. Gregoire said at the bill signing. "More new parents, especially those with low or middle-incomes, will be able to stay at home with their child during the critical first few weeks of life."

SB 5659 was significantly weakened from its original form, which granted paid leave not just for new children, but also for workers to care for themselves or family members facing a serious illness. It was to be financed through a 2-cents-an-hour payroll tax -- or $20 to $40 a year -- which polls showed that workers were willing to pay. Fully 73% of voters statewide supported the original bill, including a remarkable 82% in Eastern Washington.

The Senate amended SB 5659 to remove coverage for workers’ personal illnesses and to make other significant changes intended to address the business community’s concerns. It passed 32-17 (see Senate Vote #5).

In the House, it was further weakened to remove coverage for family illnesses and also to remove the financing mechanism, creating a task force to recommend how to fund the program. That amended version easily passed 61-36 (see House Vote #8). That version then narrowly passed the Senate 26-21 (see Senate Vote #5), with some Senators who supported the original bill now opposing the weaker version with no funding mechanism.

"We congratulate and thank Governor Gregoire and the State Legislature for taking this historic step," said WSLC President Rick Bender. "Today is the end of one long journey and the beginning of another as we look forward to strengthening the program and keeping it on sound financial footing."

Last year, the Fair Share Health Care bill won significant support and prompted an important debate about employers’ responsibility to help solve the health-care crisis. The bill required large employers to spend a percentage of their payroll costs on health benefits, or else pay a fee to the state. Although it didn’t get a vote in 2006, Gov. Chris Gregoire pledged to support a revised version and House Speaker Frank Chopp also said he would work on the issue.

But later last year, a judge rejected Maryland’s similar law, ruling it was pre-empted by the federal Employee Retirement Income Security Act.

As the 2007 session began, when asked about Fair Share’s prospects, both Gregoire and Chopp cited the Maryland law’s fate and expressed pessimism. So legislators, unions, small businesses and others concerned about big employers shifting their costs onto taxpayer-funded health plans went back to the drawing board. What emerged was HB 2094, the Taxpayer Health Care Fairness Act sponsored by Rep. Steve Conway (D-Tacoma).

Rather than creating a threshold percentage of payroll costs to go toward providing health care, HB 2094 just said "cut the check." Employers with more than 1,000 workers would have to reimburse the state for the costs of their workers on tax-funded health plans. To protect working people enrolled in Medicaid or Basic Health plans, the bill would also make it illegal to discriminate against enrollees by, for example, firing them to avoid reimbursing the state.

A hearing on HB 2094 in House Appropriations Committee was packed with supporters. Although the bill didn’t make it out of that committee, House leadership committed to addressing the issue during the budget process.

The final budget included a proviso directing the Department of Social and Health Services, in consultation with other agencies, to prepare a report studying HB 2094 and alternatives to promote health coverage for low-wage workers who work for employers with more than 50 employees and are enrolled on state plans. A new work group, which will include worker representatives, will help prepare this report to "identify how (each) approach would further the goal of shared responsibility for coverage of low-wage workers, obstacles to implementation and options to address them, and estimated implementation costs."

The Washington State Labor Council will follow the progress of this work group and its recommendations.

The Governor and other Democratic leaders made health care a priority issue in 2007. The first piece of legislation Gov. Gregoire signed this session significantly boosted children’s health coverage. Lawmakers added a number of slots to the Basic Health Plan. Plus, steps were taken to implement many of the recommendations of the Governor’s Blue Ribbon Panel on Health Care.

The critical component yet to be addressed -- and one that cannot wait until more comprehensive health care reform is implemented -- is the deliberate cost-shifting onto taxpayers.

Craig Cole, CEO of Bellingham-based Brown & Cole Stores: "There is no question that Brown & Cole (which has filed for bankruptcy) was undermined by large profitable employers who have abandoned basic American values and pay their employees so badly their workers qualify for public assistance. Using state-funded health care is their profit strategy. They simply dump their health care costs onto taxpayers... Until universal health care with appropriate cost controls is in place, irresponsible employers shouldn’t get off the hook."

But pension "gainsharing" repealed

Pension gainsharing is a benefit that allows state employees in PERS 1 and PERS 3 to share in extraordinary gains in their retirement funds’ investments. If funds earn an average of more than 10% a year for four straight years, the amount above 10% is split evenly between the employees and the state.

Citing a $6.7-billion-over-25-years price tag they said they didn’t anticipate, the Legislature approved EHB 2391 to repeal the gainsharing benefit and replace it with cheaper pension enhancements. EHB 2391 allows PERS 2 and PERS 3 participants with 30 years of service to retire three years earlier, at age 62, with no penalty; and boosts the cost-of-living adjustment for PERS 1 retirees.

Arguing that promised retirement benefits can’t be taken away, the Washington Public Employees Association/UFCW 365 and the Washington Education Association have filed lawsuits to block gainsharing’s repeal. Legislators say that EHB 2391 is written so that if gainsharing is reinstated by the courts, the new pension benefits will be eliminated.

Stay tuned...

Last year, state employee unions negotiated contracts that included a 3.2% pay raise on July 1 and a 2% increase in 2008. The contracts also included a new 2.5% step increase for those at the top of their pay scale, capped health premium shares at 12%, and $756 lump-sum payments to make up for the state’s previous underspending on health benefits.

As state lawmakers began the 2007 session, a booming economy had boosted state coffers with a projected $1.9 billion revenue surplus. But that didn’t make funding the state contracts a slam dunk.

When Gov. Chris Gregoire unveiled her budget proposal fully funding the contracts, Republicans leaders and newspaper editorial boards howled. One Seattle Times editorial called on legislators to restrain spending by raising state workers’ health shares from 12% to 20%, and by eliminating the new step increase on wages.

But Democratic budget leaders were steadfast in their support of state employees and the contracts, and the 2007-09 biennial budget, SHB 1128 (see Senate Vote #9 and House Vote #10) fully funded them.

"The Legislature did the right thing by funding the contracts," said Rick Bender, president of the Washington State Labor Council. "If we want quality, efficient public services in Washington, we need to attract and retain our state government’s most valuable assets: its dedicated employees. All of our affiliates who represent state employees deserve credit for their effective advocacy on these contracts."

Before signing the budget, Gov. Gregoire vetoed a health insurance proviso opposed by the Washington Federation of State Employees, AFSCME Council 28. It would have prohibited the Public Employees Benefits Board from improving health benefits if the changes would increase their actuarial value.

You -- not the pundits -- will decide who wins, loses
PRESIDENT'S COLUMN by Rick S. Bender

A simplistic winners-vs.-losers parlance exists among many political pundits. Every year, news reporters want to sum up a busy legislative session -- during which a wide range of issues were or were not addressed -- with a scorecard of which "interest groups" succeeded and which failed. Who got what they wanted and who didn’t?

Well, the answer is never simple. There are often positive developments alongside significant disappointments. The main difference in 2007 is that, thanks to labor’s effective grassroots political support for pro-worker candidates, we find ourselves on the offensive. Pushing progressive, proactive legislation sure beats defending against attacks.

After Washington voters broadened the Democratic majorities in both the State House and Senate last fall, some hand-wringing pundits predicted mass lib-steria.

Perhaps concern was warranted. We’ve all witnessed what one-party control wrought in the other Washington. The keys to our federal government have been essentially handed over to corporate interests. The Bush administration invited industry lobbyists to direct agencies they spent their careers opposing, while rubberstamping Republicans in Congress turned a blind eye.

So it makes sense here at home that some might have feared that the keys to our state government would be handed over to traditional Democratic constituencies, including organized labor.

That didn’t happen. Pragmatic Democratic leaders in the Governor’s office and both houses of the legislature took incremental, measured steps on their priority issues.

As noted throughout this Legislative Report and Voting Record, organized labor had considerable success passing important legislation to improve the lives of working people. We owe great thanks to Gov. Chris Gregoire, Democratic leadership in both houses, and the many state legislators in both parties who delivered on those issues.

But there was also legislation that labor considered to be major priorities that was tabled or otherwise set aside.

Among 2007’s highlights was approval of the historic family leave bill. Labor would have strongly preferred the bill in its original form. Its scaling-back is exactly the kind of measured, cautious approach Democratic leaders are becoming known for in Olympia.

Other successes include the rule clarifications for agency fee accounting (HB 2079), addressing Unemployment Insurance fraud by employers (SB 5373), fairly calculating workers’ compensation benefits for those with "hour banks" (HB 1244), increasing minimum benefits for injured workers (SB 5675), and an historic effort to reform our vocational-rehabilitation system (SB 5920).

On the other hand, the failure to get votes on the Worker Freedom Act (HB 2383) and the Aerospace Incentive Accountability Act (HB 1828 & 2351) was disappointing. Restoring the freedom to choose unionization is the very highest priority for the Washington State Labor Council and the AFL-CIO.

Similar to health care reform, federal labor law reform will ultimately be necessary, but working families can’t afford to wait. Where the state can act to protect fundamental employee rights at work, it must. These critically important bills remain alive for the second half of the biennium in 2008. The WSLC will continue to educate legislators about the need for the bills and to address any concerns they have.

This report includes examples of labor’s legislative successes and disappointments. But remember, it’s just halftime for the biennium. After next session, the "winners and losers" will be decided -- not by the pundits, but by you, at the polls.

Initiative 134, written by right-wing conservative interests and approved by voters in 1992, reformed our state campaign finance laws, creating contribution limits for statewide and legislative races. The sweeping measure also included a clause to require public-sector unions to get annual written reauthorization from members before diverting their dues for political spending.

Efforts to implement this clause’s vague language have led to 15 years of legal wrangling, most notably between the Washington Education Association and the Evergreen Freedom Foundation, a right-wing think tank funded by groups that support privatizing schools.

Throughout all this, public-employee unions have struggled to comply with the law, especially as it pertains to "agency fee" workers, those who withdraw from the union for religious, political or other reasons but still pay a fee to cover their share of the costs for administering and enforcing their contract. Part of that confusion is how unions should account for political spending to ensure agency fees aren’t used.

Unions have tried segregating fee dollars into separate accounts not used for politics, but that was rejected as not sufficient. Unions tried segregating political expenditures into accounts funded only by members and not fee-payers, but that too has been rejected.

So this year, labor supported passage of HB 2079, sponsored by Rep. Joe McDermott (D-Seattle), which declares that agency fees are not considered used for politics when sufficient funds exist in a union’s general treasury from dues-paying members to cover the expenditure. This finally clarifies this rule while ensuring all workers retain the right to prevent their agency fees from being spent on politics. It passed the House 55-42 (see Vote #3) and the Senate 29-20 (see Vote #8).

Conservative legislators and the EFF have deliberately mischaracterized the bill as allowing agency fees to be used for politics. That is simply not true unless you make the erroneous assumption that fees are "first in" to the general fund and "first out" for political spending. Under HB 2079, unions can’t spend one penny more on politics than they can fund through the contributions of full dues-paying members.

It’s no surprise the EFF is threatening to sue over HB 2079. They want unions to keep spending millions in court to defend their right to have a political voice on behalf of members. Their clear goal is to stifle union political activity. Meanwhile, corporations have no mechanism for shareholders to "opt out" and stop their money from being spent on political activity they disagree with, like union members can. These business interests outspent unions 17-to-1 in the 2006 elections.

But the EFF and other right-wingers turn a blind eye to compulsory corporate political spending. Why? They don’t want to bite the hand that feeds them.

Voc-rehab pilot project OK'd

In an historic agreement, labor and business agreed to a 5-year pilot project to restructure the vocational rehabilitation program. After seven months of negotiations, with WSLC Research Director Jeff Johnson ably representing labor’s interests, SB 5920, a Governor-request bill sponsored by Sen. Jeanne Kohl-Welles, was approved. It allows injured workers up to two years of retraining and up to $12,000 in tuition, fees and materials to retrain for family-wage jobs. That amount is indexed to changes in the cost of education at community and technical colleges. The bill also requires greater accountability for claims managers, employers, voc-rehab counselors and injured workers. Some workers will be able to get their voc-rehab services through the state’s Worksource centers.

As always, there were several workers’ compensation bills in 2007 tracked by the Washington State Labor Council and the Workers’ Compensation Caucus of labor experts and other advocates for injured workers.

One of the important labor-supported bills that passed into law was HB 1244, the "hour bank" bill. Some building trades and other workers divert a portion of their wages into an hour bank that ensures continuity of health coverage between jobs. But in calculating injured worker benefits, the state has paid these workers lower benefits because the state credited their employers with providing health care even though they are no longer contributing toward health coverage. HB 1244 restored the value of these health benefits in calculating workers’ compensation benefits. The bill passed the House 64-32 (see Vote #2), the Senate 47-0 and was signed by Gov. Chris Gregoire.

Other legislation supported by the WSLC and the Workers Compensation Caucus that passed in 2007:

There are many, many more stories included in the print version of the WSLC's 2007 Legislative Report on issues like health care, collective bargaining rights for adult family home providers and higher education employees, unemployment insurance, crane safety, and much much more. Union members may request a free copy.