Looks like we’re in for a nice weekend. As a wrap up to the week that saw a flurry of bills passed and some already signed, a final report is below. The Governor also signed today the new legislative and supreme court maps. The May jobs report has been posted and it is much better received than the April report. Finally, can’t leave without the latest on the infrastructure talks.
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U.S. Employers Added 559,000 Jobs in May
U.S. employers added 559,000 jobs in May and the unemployment rate fell to 5.8%, in a pickup of the labor market’s recovery from the pandemic amid signs that businesses struggled to fill job openings. Last month’s gain represented an improvement from April, when the unemployment rate was 6.1% and the economy added a revised 278,000 jobs, a gain much smaller than economists had forecast.
Economists had expected 671,000 jobs added and a 5.9% unemployment rate in May. Job gains in May were led by leisure and hospitality, which added 292,000 jobs, education, and healthcare, the Labor Department said.
The faster pace of hiring came as several factors are propelling a burst of economic activity. More Americans have become vaccinated against the coronavirus, and state and local governments have eased restrictions on businesses as Covid-19 cases have declined and as the federal government has relaxed its pandemic guidance. Those factors, along with federal pandemic aid, have prompted a pickup in spending, particularly at services businesses, which in turn is stoking labor demand.
The unemployment rate fell because more Americans who were searching for work found jobs, but the number of people in the labor force held nearly steady, suggesting that ample open jobs and some improvement in wages didn’t draw more workers off the sidelines in May.
The labor force participation rate, the share of adults working or looking for work, edged slightly lower in May to 61.6%, down from 63.3% in February 2020. Average hourly pay for private-sector employees increased by 15 cents to $30.33 in May. Hourly wage rose 2% from a year earlier.
Economists predict that the labor market won’t fully recover until next year despite signs of robust demand for workers. The Federal Reserve, other policy makers and financial markets are closely watching the pace of hiring as a key indicator of strength in the overall recovery.
Strong growth in U.S. job openings is a sign that employers are seeking to boost hiring, although they face challenges in filling positions.
Biden Signals Flexibility on Taxes for Infrastructure
President Biden signaled he could accept a narrower infrastructure package that didn’t include raising the corporate tax rate, telling a top Senate Republican that he wants $1 trillion in new spending and floating alternative ways to pay for the measure, according to people briefed on the matter.
The new proposal, which includes a minimum corporate tax of 15% for the nation’s largest companies and the repurposing of some Covid-19 aid funding, marks a late shift from the White House, as Mr. Biden and Senate Republicans kick off what is expected to be a final flurry of talks on the size of the infrastructure plan and how to fund it.
During a Wednesday meeting with Sen. Shelley Moore Capito (R., W.Va.), Mr. Biden put forward the $1 trillion proposal, down from $1.7 trillion previously, and outlined options to pay for the spending that wouldn’t boost the corporate tax rate to 28% from 21%, as he previously proposed. Republicans have called any effort to boost the corporate tax rate or unwind the Republicans’ 2017 tax law a nonstarter.
On Thursday, GOP aides signaled skepticism of many of Mr. Biden’s ideas. Some Democratic lawmakers have urged the White House to move ahead without Republican support while others have supported continuing talks.
“This should be completely acceptable to a number of Republicans who have said their bottom line is they want to leave the 2017 tax law untouched,” White House press secretary Jen Psaki said Thursday. “We’re also going to keep options open and keep a range of paths open,” she said.
Senator Capito and other Senate Republicans working on the infrastructure legislation are discussing making a counteroffer to the White House on Friday, when Mr. Biden and Mrs. Capito are planning to speak again. President Biden will speak with Sen. Shelley Moore Capito (R-W.Va.) on Friday afternoon to discuss a potential bipartisan compromise on infrastructure amid signs the talks are nearing their end as both sides remain far apart on key components.
Friday’s discussion — slated to take place by phone instead of in-person like the previous meetings — comes as the clock is ticking for striking an agreement.
Capito, the lead GOP negotiator, and Biden missed an informal Memorial Day deadline to clinch a deal. Democratic lawmakers, who start returning to Washington next week, are now eager to move forward on an infrastructure package, with or without Republicans.
Ms. Psaki said President Biden isn’t abandoning his goal of raising the corporate tax rate and would continue to push the measure in other negotiations, while reiterating the White House wouldn’t support higher gasoline taxes or user fees on drivers, as some Republicans have suggested. She also played down any immediate deadline, after other administration officials said the White House wanted to see significant movement by Monday, when Congress returns to Washington.
Under one of Mr. Biden’s suggestions, the biggest companies would pay a minimum corporate tax of 15%, according to people briefed on the matter. According to details the administration released earlier this year, the tax would apply only to companies with income exceeding $2 billion. The result is that just 180 companies would even meet the income threshold and just 45 would pay the tax, according to administration estimates. Tax lawyers and accountants have argued that a 15% minimum tax on financial-statement income could be difficult to administer and implement and would cede some U.S. tax rules to accounting regulators.
Unlike Biden’s proposed corporate tax-rate increase or changes to taxes on U.S. companies’ foreign income, the minimum tax wouldn’t directly reverse the 2017 law, passed by Republicans with no Democratic support. That law reduced tax bills for most families and businesses, eliminated some breaks and dropped the corporate tax rate to 21% from 35%. But the minimum corporate tax, already proposed by Mr. Biden as part of his broader agenda, would have some of the same effects by clawing back various tax breaks. In addition, Republicans say higher taxes would damp the economic recovery.
President Biden also called for stepped-up enforcement by the Internal Revenue Service that would collect up to $700 billion in taxes that are owed but otherwise wouldn’t be collected over the next decade. The administration has called for an $80 billion expansion of the tax agency over 10 years that would double its staff, beef up audits and give the IRS more information about individuals’ and businesses’ bank accounts. Some Republicans have called that plan potentially too intrusive.
In the meeting, President Biden’s list also included changing the longstanding income-tax rules for investment appreciation when a taxpayer dies and eliminating tax provisions that benefit fossil-fuel companies, according to someone familiar with the discussions.
The enforcement and investment-appreciation tax increases had been part of a separate administration proposal to pay for family and education benefits, not infrastructure. Using any of those items now would prompt a reshuffling of the rest of the Biden agenda and how it is paid for, so that proposals such as higher marginal tax rates on individuals and companies could be reserved for partisan legislation.
President Biden also suggested repurposing $75 billion in previously approved Covid-19 relief aid, according to a person familiar with the matter. The White House had previously opposed tapping already approved Covid-19 aid, but seemed willing to repurpose a smaller amount than Republicans, who have pushed to use up to $700 billion. The White House said the funding would come from leftover Covid-19 aid passed during the Trump administration.
Governor Pritzker Signs New Legislative and Supreme Court Maps
Just a day after saying he was “still evaluating” them, Gov. J.B. Pritzker has signed into law new maps remaking district lines for state senators and representatives, the Illinois Supreme Court and members of the Cook County Board of Review. Pritzker said he has determined the maps align with the federal Voting Rights Act that protects minority rights and therefore provide the “fairness” he had promised.
“Illinois’ strength is in our diversity, and these maps help to ensure that communities that had been left out and left behind have fair representation in our government,” Pritzker said in a statement.
Signing the maps less than a week after they were adopted likely will subject Pritzker to further attacks from Springfield Republicans and some civic groups who have charged that the maps were rushed through with minimal scrutiny and are primarily intended to guarantee continued Democratic dominance of the Legislature, high court and review board.
His move also boosts the prospects of an almost-certain legal attack on the maps, if it comes out later that they are flawed and treat racial and minority groups unfairly. Sources have also hinted Governor Pritzker advanced his timetable because the maps had become entangled in another hot issue: the terms of an energy deal that will satisfy green groups while keeping open Exelon nuclear plants without socking taxpayers with the costs of excessive subsidies.
Additional Illinois Bill Updates
HB 117, Secure Choice Savings Program passed out of the Senate by a vote of 42-15-0 and has now passed both chambers. This bill Provides that the Act applies to employers with at least 5 employees, rather than at least one employee. (Current law applies to employers with fewer than 25 employees.) Provides that a small employer is an employer that employed less than 5 employees during any quarter of the previous calendar year, rather than less than 25 employees at any one time throughout the previous calendar year.
HB 711, Prior Authorization passed out of the Senate by a vote of 57-0-0 and has now passed both chambers. This bill, as amended does the following: in the Prior Authorization Reform Act, deletes a Section concerning obligations with respect to prior authorization concerning emergency health care services, and makes changes in provisions governing applicability; definitions; disclosure and review of prior authorization requirements; obligations with respect to prior authorizations; personnel qualified to make adverse determinations of a prior authorization request; adverse determinations; review of appeals; denials; length of prior authorization approval; continuity of care; effect of failure to comply with the Act; and administration and enforcement. Makes further changes in the Illinois Insurance Code in a Section concerning obligations under the Managed Care Reform and Patient Rights Act. Deletes changes made to the Managed Care Reform and Patient Rights Act in a Section concerning emergency services prior to stabilization.
SB 632, Restore Illinois Commission passed out of the House by a vote of 71-45-0 and has now passed both chambers. This bill reenacts the Restore Illinois Collaborative Commission within the Department of Commerce and Economic Opportunity to monitor actions taken by the Office of the Governor with regard to the Restore Illinois plan and to keep members of the General Assembly informed of those actions and any need for further legislative action. Repeals provisions on January 1, 2023.
HB 3743, 5G Expansion/Communication Laws Extensions passed the Senate by a vote of 53-5-0 and passed the House by a vote of 96-12-1. This bill as amended, is the Telecom omnibus bill. This bill extends the emergency telephone systems act with upgraded 911 services. The small wireless Facilities Deployment Act is extended to December 31st, 2024. It also expands prevailing wage for certain jobs contracted by a public utility. The Chamber supports this bill as it extends three critical communication laws that bolster Illinois broadband networks and video services. This bill is critical for greater 5G expansion and innovation in the state.
HB 1839, Good Corporate Citizen was shelled in the Senate Executive Committee. While the language for “good corporate citizen” was removed, the thought was the bill would potentially carry language for a paid leave act.
HB 1839 originally contained the following language: The Department may require a business organization to agree to certain terms that ensure the business, including its related members, is a good corporate citizen as a condition for receiving development assistance. A business that cannot truthfully agree to any required terms shall be ineligible for the development assistance. Terms include: the business is not to have not been the subject of any criminal charges within 5 years prior to the application for development assistance or during the term of a development assistance agreement; there has been no charges, complaints, or other actions having the effect of initiating judicial or administrative proceedings brought by the State of Illinois or any governmental body within the State of Illinois, including the federal government, with respect to the business or its officers or a corporate parent or affiliate that relates to alleged fraud or activity that poses a substantial threat or persistent nuisance to public health, safety, or welfare; the business and any corporate parent or affiliate are not delinquent on the payment of any taxes to the State of Illinois or the United States; and the business and any corporate parent or affiliate operating within Illinois will comply with the requirements of all applicable laws governing the project.
SB 208: Paid Leave Mandate: In the closing days of session, negotiations on a paid leave mandate rekindled. The latest version requires paid leave to be paid based on an accrued basis with a minimum of 56 hours earned in a year. Some of the key issues of concern to employers are addressed, especially allowing employer flexibility in implementation. This bill was held on second reading in the House.
SB 2531, SALT Cap Workaround passed out of the House by a vote of 116-0-0 and has now passed both houses after Senate concurrence. This bill is a work around to the federal $10,000 SALT cap. This bill is revenue neutral as it will help thousands of Illinois taxpayers while not affecting state revenues.
SB 2182, Data Centers passed out of the House Revenue Committee by a vote of 13-5-0, but has stalled on motion to concur. This bill was an Illinois Chamber initiative that passed out of the Senate unanimously. However, a hostile amendment was introduced in the House which now makes this bill insupportable. This bill now provides that a “qualifying Illinois data center” means a new or existing data center that, among other criteria, is located in the State of Illinois, is located within a 5-mile geographic radius, and is connected by common infrastructure. Provides that a data center and an associated tenant may enter into an ancillary memorandum of understanding, as prescribed by the Department of Commerce and Economic Opportunity, for purposes of receipt of an exemption. Provides that the Department is authorized to conform existing memorandums of understanding with the provisions concerning data center investments. Provides that within 180 days after the effective date of this amendatory Act of the 120nd General Assembly, all new and existing data centers seeking a certificate of exemption under this Section shall require the contractor to enter into a labor peace agreement with any union representing workers who operate and maintain a critical system or equipment used or maintained by the data center.
SB 72, Prejudgment Interest was signed into law. This bill does the following:
- Provides for pre-judgment interest in personal injury and wrongful death cases
- Interest shall begin to accrue at 6% rate when the case is filed (HB 3360 interest began at notice of the injury. Prior versions were at 9 and 7 percent)
- Interest does not apply to punitive damages, sanctions, statutory attorney’s fees and statutory costs
- If the judgment is greater than the amount of the highest written settlement offer made by the defendant, interest shall only apply to the difference between the amount of judgment and the settlement offer
- Prejudgment interest capped at 5 years (no cap in previous versions of the bill)
HB 121, Work Authorization passed the House by a vote of 112-0-0 and has now passed both chambers. This bill provides that it is the public policy of the State to prevent discrimination based on the specific status or term of status that accompanies a legal work authorization. Defines “work authorization status” as the status of being a person born outside of the United States, and not a U.S. citizen, who is authorized by the federal government to work in the United States. Provides that it is a civil rights violation for: (1) any employer to refuse to hire, to segregate, to engage in harassment, or to act with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or terms, privileges or conditions of employment on the basis of work authorization status; (2) any employment agency to fail or refuse to classify properly, accept applications and register for employment referral or apprenticeship referral, refer for employment, or refer for apprenticeship on the basis of work authorization status; (3) any labor organization to limit, segregate, or classify its membership, or to limit employment opportunities, selection and training for apprenticeship in any trade or craft, or otherwise to take or fail to take, any action which affects adversely any person’s status as an employee or as an applicant for employment or as an apprentice, or as an applicant for apprenticeships, or wages, tenure, hours of employment, or apprenticeship conditions on the basis of work authorization status; and (4) any employer to refuse to honor work authorization based upon the specific status or term of status that accompanies the authorization to work. Provides that it is a civil rights violation for a person, or for 2 or more persons, to conspire to retaliate against a person because he or she has opposed that which he or she reasonably and in good faith believes to be discrimination based on work authorization status. Provides that nothing contained in the Act shall require an employer to sponsor any applicant or employee to obtain or modify work authorization status, unless otherwise required by federal law.
HB 399, High Speed Rail Commission passed the House by a vote of 101-14-0 and has now passed both chambers. This bill Creates the High-Speed Railway Commission Act. Prescribes the membership of the Commission. Provides that the Commission shall create a statewide plan for a high-speed rail line and feeder network connecting St. Louis, Missouri and Chicago, Illinois that includes current existing Amtrak and Metra services, connects the cities of Rockford, Moline, Peoria, and Decatur, and uses inter-city bus service to coordinate with the rail line. Provides that the Commission shall conduct a ridership study and shall make findings and recommendations concerning a governance structure, the frequency of service, and implementation of the plan. Provides that the Commission shall report to the General Assembly and the Governor no later than December 31 of each year. Provides that the Department of Transportation shall provide administrative support to the Commission.
HB 645, Future of Work Taskforce has passed out of both houses. This bill Creates the Illinois Future of Work Act. Creates the Illinois Future of Work Task Force. Provides for the duties and responsibilities of the Task Force. Provides for the membership and meetings of the Task Force. Provides that members of the Task Force shall serve without compensation. Provides that the Department of Commerce and Economic Opportunity shall provide administrative support to the Task Force. Requires the Task Force to submit a final report to the Governor and the General Assembly no later than May 1, 2022.
SB 672, Non-Competes passed out of the House by a vote of 110-0-0 and after Senate concurs with amendment is has passed both houses. This bill provides that a covenant not to compete shall not be valid or enforceable unless the employee’s actual or expected annualized rate of earnings exceeds $75,000 per year on the effective date of the amendatory Act, $80,000 per year beginning on January 1, 2027, $85,000 per year beginning on January 1, 2032, or $90,000 per year beginning on January 1, 2037 (rather than no employer shall enter into a covenant not to compete with any low-wage employee of the employer). Provides that a covenant not to solicit shall not be valid or enforceable unless the employee’s actual or expected annualized rate of earnings exceeds $45,000 per year and increasing in steps to $52,500 per year in 2037. Provides that a covenant not to compete is void and illegal for any employee who an employer terminates or furloughs or lays off as the result of business circumstances or governmental orders related to the COVID-19 pandemic, or under circumstances that are similar to the COVID-19 pandemic, unless enforcement of the covenant not to compete includes compensation equivalent to the employee’s base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement. Provides that a covenant not to compete is void and illegal for individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act. Establishes exclusions for management professional personnel engaged in the construction industry. Provides a procedure for enforcement by the Attorney General. Contains provisions concerning the enforceability of a covenant not to compete or a covenant not to solicit; notice requirements for employers under a covenant not to compete or a covenant not to solicit; remedies for employees who prevail against an employer’s civil action to enforce a covenant not to compete or a covenant not to solicit; and certain factors a court may consider when determining whether to reform a covenant not to compete or a covenant not to solicit.
SB 1847: EQUAL PAY CERTIFICATE has passed out of both houses. The Council and other business groups working with the Illinois Department of Labor (IDOL) agreed to amendments that make several important changes to the Equal Pay Act mandate for Illinois employers of 100 or more. Current law requires extensive wage and personnel data to IDOL and certify compliance with federal and Illinois equal pay and discrimination laws. The legislation’s positive changes include 1) delaying the effective date 2) providing privacy protection to individual corporate and employee data and 3) replacing the 1% of gross profit with a definitive penalty.
Biometric Information Privacy Act (BIPA)
Illinois is notorious for its BIPA laws. Since the Illinois Supreme Court ruled in Rosenbach v. Six Flags, Illinois has allowed for costly lawsuits under BIPA even when no actual damages occur to the “aggrieved” person(s). More than 1,500 BIPA class actions have been filed in Illinois with an average settlement of $1.2 million.
A BIPA reform bill, the Illinois Chamber’s HB 559 sponsored by House Republican Leader Durkin, was reported favorably out of a committee for the first time. BIPA reform was included in the first version of the Budget Implementation Bill (BIMP) as Senate Amendment 1 to HB 2499. Unfortunately, it was removed from later amendments to the BIMP.
The critical push to reform BIPA will continue another year. HB 559 (Durkin)- House Bill 559 is the Illinois Chamber’s BIPA language. If within the 30 days the private entity actually cures the noticed violation and provides the aggrieved person an express written statement that the violation has been cured and that no further violations shall occur, no action for individual statutory damages or class-wide statutory damages may be initiated against the private entity. A prevailing party may recover against a private entity that negligently violates the Act, actual damages (rather than liquidated damages of $1,000 or actual damages, whichever is greater; or against a private entity that willfully violates the Act, actual damages plus liquidated damages up to the amount of actual damages.
For the first time, a BIPA bill passed out of a legislative committee. This bill passed the House Judiciary-Civil Committee with a vote of 10-5 but unfortunately was prevented from being called on the House floor.
HB 560 (Durkin)- This bill deletes a provision regarding a right of action. Provides instead that any violation that results from the collection of biometric information by an employer for employment, human resources, fraud prevention, or security purposes is subject to the enforcement authority of the Department of Labor. Provides that an employee may file with the Department a violation by submitting a complaint form within one year from the date of the violation. Any other violation of the Act constitutes a violation of the Consumer Fraud and Deceptive Business Practices Act, with enforcement by the Attorney General. This bill was not called in committee.
SB 56 (Bryant) – Senator Bryant also introduced a BIPA bill. This bill provides that if, within the 30 days, the private entity actually cures the noticed violation and provides the aggrieved person an express written statement that the violation has been cured and that no further violations shall occur, no action for individual statutory damages or class-wide statutory damages may be initiated against the private entity. Provides that a prevailing party may recover actual damages for a negligent violation of the Act. Provides that a prevailing party against a private entity that willfully violates the Act may recover actual damages plus liquidated damages up to the amount of actual damages. This bill received a hearing in the Senate Judiciary Committee but did not move.
HB 3697 (Hoffman) – Provides the Workers’ Compensation Act does not preempt or prevent an employee from recovering under the Biometric Information Privacy Act. There is ongoing litigation on this issue. w. HB 3697 passed the House on a partisan roll call of 74-41-2 but was held in the Senate Judiciary Committee.
Program Notices & Reminders – Expanded Information
CDC Mask Guidance
The CDC still recommends that unvaccinated people continue to take preventive measures, such as wearing a mask and practicing social distancing. In their latest guidance, the CDC now reports that indoor and outdoor activities pose minimal risk to fully vaccinated people and that fully vaccinated people have a reduced risk of transmitting SARS-CoV-2 to unvaccinated people.
Fully vaccinated people can:
• Resume activities without wearing masks or physically distancing, except where required by federal, state, local, tribal, or territorial laws, rules and regulations, including local business and workplace guidance
• Resume domestic travel and refrain from testing before or after travel or self-quarantine after travel
• Refrain from testing before leaving the United States for international travel (unless required by the destination) and refrain from self-quarantine after arriving back in the United States
• Refrain from testing following a known exposure, if asymptomatic, with some exceptions for specific settings
• Refrain from quarantine following a known exposure if asymptomatic
• Refrain from routine screening testing if feasible
For now, fully vaccinated people should continue to:
• Get tested if experiencing COVID-19 symptoms
• Follow CDC and health department travel requirements and recommendations
Governor Pritzker Mask Changes:
Finally, join us in June for our re-scheduled luncheon with Police Chief Dawn Malec and Fire Chief Greg Blaskey on Wednesday, June 16 at Harrah’s Joliet Casino & Hotel. You may make reservations here: http://jolietchamber.chambermaster.com/events/details/2021-member-lunch-june-16-meet-greet-with-joliet-police-fire-chiefs-6060
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry