Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
Last week news was shared on the FTC’s ruling to ban noncompete clauses and now this week we share news on the Department of Labor’s plan to raise the salary threshold for exempt workers. Also on the Federal front is an announcement regarding the classification of cannabis.
Closer to home on the State side, we now hit the final month of our legislative session meaning the stretch run for budget negotiations. We should see in the next week a report on state revenue for April which in the past has determined the final path for budget plans.
*Government Affairs Roundup brought to you by CITGO*
New Federal Overtime Rule is Here, Salary Threshold Raised
The Labor Department’s new salary threshold for certain exempt employees will soon expand eligibility for overtime pay to millions of additional workers, surpassing initial expectations. Employers must act swiftly to ensure their pay practices comply with this significant change. Specifically, the U.S. Department of Labor (DOL) has announced that the salary threshold for the “white-collar” exemptions will increase from $35,000 to approximately $44,000 on July 1, and will further rise to nearly $59,000 at the onset of 2025. This means that employees must earn at least this new threshold to be considered exempt from overtime pay under the white-collar exemptions.
The Department estimates that about 4 million workers will be affected by this change, potentially prompting substantial alterations to compensation plans. While legal challenges are anticipated, there is no guarantee that a court will halt the rule before its effective dates. Therefore, employers should commence planning immediately.
To provide a quick recap, under the federal Fair Labor Standards Act (FLSA), employees are generally entitled to overtime pay at a rate of 1.5 times their regular rate of pay for all hours worked beyond 40 in a workweek, unless exempted.
In recent years, the DOL’s revisions to the exempt salary threshold, often referred to as “federal overtime rules,” aim to expand the number of employees eligible for overtime. These revisions do not alter existing overtime laws but rather adjust regulations to raise the minimum salary requirement for white-collar exemptions.
Employers have limited time to prepare for the upcoming increases, which will take effect in two phases: the first on July 1 and the second on January 1, 2025. While the initial phase may seem advantageous with a temporarily lower salary threshold, it adds complexity to planning and necessitates immediate action.
Currently, the salary threshold for exempt employees under the administrative, executive, and professional exemptions is $684 per week ($35,568 annually). The new rule elevates this threshold to $844 per week ($43,888 annually) initially, then to $1,128 per week ($58,656 annually). These substantial increases require careful planning for employees earning less than the revised amounts.
Furthermore, the rule introduces the following key changes:
The salary threshold will be automatically updated every three years, beginning July 1, 2027.
The threshold for the “highly compensated employee” (HCE) exemption will increase to $132,964 on July 1, then to $151,164 on January 1, 2025, representing a significant rise from the current $107,432. This threshold will also be subject to triennial updates.
It’s crucial to remember that the white-collar exemptions entail additional requirements beyond the salary threshold. To qualify, employees must meet three criteria:
Be paid on a salary basis.
Earn at least the designated minimum weekly salary.
Perform specific duties.
Job titles and descriptions alone do not determine exemption eligibility; instead, employees’ primary job duties must align with state and federal wage and hour law requirements.
The duties test varies depending on the exemption. Here’s a summary of the basic federal requirements for the white-collar exemptions, noting that the salary basis test must be satisfied first:
Executive Exemption: Primary duty involves managing the enterprise or a recognized department, regularly directing the work of two or more employees, and possessing authority in hiring or firing decisions.
Administrative Exemption: Primary duty includes non-manual work related to management or business operations, exercising discretion and independent judgment on significant matters.
Professional Exemption: Primary duty entails work requiring advanced intellectual knowledge in a specialized field, customarily acquired through prolonged specialized instruction.
Employers must review and adjust their practices accordingly to ensure compliance with these evolving regulations.
Plan to Reclassify Cannabis
The Biden administration’s plan to relax marijuana restrictions has sparked questions and discussions within Illinois’s cannabis industry following the U.S. Drug Enforcement Administration’s announcement. The move entails reclassifying marijuana to a less severe Schedule III drug, a significant shift in drug policy.
There are concerns about the potential for reversal under a different administration, prompting speculation about the timeline and implications. While the news marks a notable policy change, uncertainties remain regarding implementation and its impact on Illinois, where both medical and recreational marijuana are already legalized.
Some stakeholders view the move positively, anticipating benefits such as improved access to investment funds and legal protections. Moreover, potential normalization of cannabis transactions in the banking sector could broaden the pool of cannabis stakeholders, potentially influencing pricing dynamics for consumers.
Despite the proposal’s submission to the White House Office of Management and Budget, the process for approval and implementation is expected to take several months, involving public feedback and final rule approval. Advocates see this as a step toward ending the “failed war on drugs” and addressing public sentiment in favor of marijuana legalization.
However, some critics argue that rescheduling falls short of broader reform goals, advocating for complete descheduling instead. They emphasize that despite the shift, conflicts with federal regulations persist, maintaining a barrier to full acceptance of adult and medical marijuana use.
A New Set of Climate Bills Introduced in Springfield
The Illinois Clean Jobs Coalition presented a robust legislative agenda on Tuesday, outlining potential remedies across the power, buildings, and transportation sectors.
Comprised of environmental advocacy groups, businesses, community leaders, and others, the coalition played a pivotal role in Illinois’ 2021 Climate and Equitable Jobs Act (CEJA). The trio of new bills aims to build upon the investments made in Illinois’ climate, equity, and energy objectives following the enactment of CEJA in 2021 and the federal Inflation Reduction Act in 2022.
Key components of the package include enhancements to the state’s electric grid, mandating gas utilities to reduce greenhouse gas emissions by 2050 and setting targets for achieving 100% carbon-free emissions from the transportation sector by 2050.
In addressing Illinois’ electric grid, one of the bills seeks to expedite the approval and integration of clean energy projects, update state energy efficiency policies, remove barriers to constructing transmission lines, and mandate transparent energy planning by municipal utilities and rural electric cooperatives.
Chicago Democrat Rep. Ann Williams, Chairwoman of the Energy and Environment Committee, emphasized the importance of securing a resilient and affordable power grid operating solely on clean energy. She highlighted the outdated, inefficient, and vulnerable nature of power grids, exacerbated by the increasing frequency of extreme weather events due to climate change.
Another bill aims to enhance energy efficiency and transition buildings away from gas. Alongside setting emission reduction targets for gas utilities by 2050, the legislation mandates the Illinois Commerce Commission to devise a plan to achieve these goals while prioritizing affordability in rate-making processes for both gas and electric utilities.
State Sen. Celina Villanueva, a Chicago Democrat, criticized recent rate hikes by major Illinois gas utility companies, citing the detrimental impact of dirty gas on health and the climate. She underscored the urgency of decarbonizing the buildings sector as a crucial step in climate action.
The legislative package also addresses Illinois’ transportation sector, focusing on reducing vehicle pollution and implementing comprehensive solutions beyond electrification, such as enhancing transit systems.
Democratic State Sen. Ram Villivalam of Chicago emphasized the need for transformative changes in the transportation system, advocating for electrifying public transit and supporting equitable and affordable mobility options. He highlighted the necessity of reforming transit agencies to better serve the needs of current and potential riders while ensuring fiscal responsibility.
Proposal to Unify CTA, Metra, and PACE Advances to Legislation
The embattled Chicago Transit Authority (CTA) is facing further pressure from Springfield this week, as lawmakers advocate for the consolidation of the region’s transit agencies into a single entity.
A new bill introduced by State Sen. Ram Villivalam and Rep. Eva-Dina Delgado proposes abolishing the Regional Transportation Authority (RTA) and establishing a new agency, the Metropolitan Mobility Authority (MMA), with expanded powers. This move, supported by the Illinois Clean Jobs Coalition, aims to streamline operations and address a projected $730 million budget gap across Pace, Metra, and the CTA by fiscal 2026.
While proponents tout the benefits of unified oversight for bus, rail, and paratransit services, critics argue that consolidating power into one centralized authority could exacerbate political conflicts and hinder local decision-making. The proposed board structure, with significant representation from state and county officials, raises concerns about potential bureaucratic gridlock and lack of accountability.
Additionally, the push for reform comes amidst growing calls for leadership changes within the CTA, with grassroots movements urging the removal of CTA President Dorval Carter. These calls have gained traction following concerns raised about the agency’s handling of safety issues, including the recent death of a CTA bus driver.
Despite these challenges, Mayor Brandon Johnson remains cautious about endorsing the proposed restructuring, highlighting the need for careful consideration of its implications for the city’s transit system. The mayor’s stance underscores the complexity of navigating political dynamics and balancing competing interests in transit governance.
As discussions continue, it remains to be seen whether the proposed legislation will address the underlying issues facing Chicago’s transit system or further exacerbate tensions between stakeholders. The chamber’s government affairs committee has spoken with legislators sharing concerns as well with the new unification proposal.
Legislation Continues to Advance for BIPA Reform
White Castle has agreed to a $9.4 million settlement in a class-action lawsuit related to Illinois’ contentious biometric information privacy law. The settlement, preliminarily approved by a federal judge in Chicago, appears favorable for the company compared to the potential $17 billion in damages it could have faced in a trial. This resolution comes amidst legislative discussions aiming to amend the law, potentially reducing future damages.
Notably, White Castle did not admit liability or misconduct in the settlement. The lawsuit alleged violations of the state’s Biometric Information Privacy Act (BIPA), specifically regarding the requirement for employees to use finger scans to access company computer systems without prior consent.
The settlement is anticipated to benefit approximately 9,750 individuals, each receiving $968 before attorney fees, which may reduce the payout to $607 per person. A finalization hearing is scheduled for August 1.
This settlement follows a similar trend in recent months, with large employers facing significant financial consequences due to BIPA violations. BNSF Railway, for instance, proposed a $75 million settlement fund after losing a BIPA trial involving over 44,000 truck drivers.
The White Castle case, initiated in 2018, gained momentum following two pivotal Illinois Supreme Court rulings. These rulings clarified that individuals could sue for biometric information collection without actual harm and imposed fines ranging from $1,000 to $5,000 per violation.
Traditionally, BIPA cases mainly involved companies and customers like Facebook and Google. However, there’s now a surge in cases involving companies and employees, many of which settle before trial due to potential significant damages.
Proposed legislative changes aim to modify the law’s strict liability regime, focusing on the number of individuals impacted and introducing electronic consent options. Despite progress, some legal experts argue that the proposed bill still imposes stringent liability on companies, potentially hindering their operations.
The bill has advanced in the Illinois Senate, with a House of Representatives committee scheduled to review it. Sen. Bill Cunningham, a Chicago Democrat sponsoring the legislation, emphasizes the need to address liability concerns without subjecting companies to excessive damages for technical violations of the law.
Illinois EPA Announces $17.7 Million Notice of Funding Opportunity for Electric School Buses
Illinois Environmental Protection Agency (Illinois EPA) Director John J. Kim announced an open-ended $17.7 million Notice of Funding Opportunity (NOFO) to fund the replacement of existing diesel school buses with new all-electric school buses located and operated in any of the three priority areas outlined in the Volkswagen Beneficiary Mitigation Plan (BMP) and further described below. Illinois EPA will also fund a portion of electric bus charging equipment if charging infrastructure is needed for buses with these funds. This funding opportunity will remain open until funding is depleted with grants awarded on a first-come, first-serve basis.
“The clean energy future is here and all communities—especially those most affected by air pollution—deserve to take part in the EV revolution,” said Governor JB Pritzker. “Thanks to this open-ended grant, my administration is protecting our children’s health and creating high-paying jobs by replacing existing diesel school buses with clean, electric models.”
“This funding opportunity is our latest action to electrify the transportation sector,” said Director Kim. “Utilizing an open-ended application process will allow us to award grants as applications are submitted and approved, providing a smoother, faster turnaround of funding to school districts in areas that are disproportionately impacted by air pollution.”
Through this funding opportunity, Illinois EPA will fund projects in the three priority areas outlined in Illinois’ BMP for the Volkswagen diesel emissions settlement and as specified in the NOFO:
• Priority Area 1: Cook, DuPage, Kane, Lake, McHenry, and Will counties, Oswego Township in Kendall County, and Aux Sable and Goose Lake townships in Grundy County.
• Priority Area 2: Madison, Monroe, and St. Clair counties.
• Priority Area 3: Champaign, DeKalb, LaSalle, McLean, Peoria, Sangamon, and Winnebago counties.
Eligible applicants include school districts that own their buses or commercial school bus providers. Purchased buses must serve a school district within one of the three priority areas. The existing diesel buses must be engine Model Year 2009 and older diesel-powered Class 4 – 8 school buses and must be scrapped within 90 days of the new buses being placed into service. If an applicant does not currently own eligible existing diesel school buses to replace and scrap, the applicant may acquire eligible existing diesel school buses from another school district/commercial school bus provider in which the bus is still in operation and has at least 80 percent of its annual operational hours in 2021-2023 in the same county/counties as the applicant.
In April of 2022, Illinois EPA submitted a revised BMP to the VW Settlement Trustee, focusing Illinois’ remaining VW allocation on electric transportation and infrastructure. The goals of the revised plan include reducing nitrogen oxide emissions in areas where the affected VW vehicles were registered. The revised BMP takes into consideration areas that do not meet federal air quality standards for ozone and bear a disproportionate share of the air pollution burden, including environmental justice areas.
The link to the Notice of Funding Opportunity is available at: https://gata.illinois.gov/grants/csfa.html?page=Opportunity.aspx&nofo=2801. All required forms and information can be found on the Driving A Cleaner Illinois webpage: https://epa.illinois.gov/topics/air-quality/driving-a-cleaner-illinois.html. Applications for the Driving a Cleaner Illinois – Volkswagen All-Electric School Buses NOFO will be accepted until funding is depleted.
All applicants must pre-qualify through the Grant Accountability and Transparency Act Grantee Portal.
Governor Pritzker Launches $30 Million Grant Opportunity for Community Revitalization
Governor JB Pritzker and the Illinois Department of Commerce and Economic Opportunity (DCEO) launched $30 million in funding for the Rebuild Illinois Downtowns and Main Streets Capital (RDMS, $20 million) and Research in Illinois to Spur Economic Recovery (RISE, $10 million) programs to revitalize commercial corridors and downtown areas throughout the state and accelerate local economic recovery initiatives. Grantees will be selected through a competitive Notice of Funding Opportunity (NOFO) process.
“Small businesses are the heart and soul of communities across Illinois,” said Governor JB Pritzker. “To boost job creation and improve local infrastructure and amenities, my administration is investing an additional $30 million to support downstate commercial corridors and downtown areas. I highly encourage all eligible organizations to apply for this transformational funding.”
The Rebuild Illinois Downtowns and Main Streets Capital program (RDMS) will provide grants for construction, repair and modernization of public infrastructure and amenities to boost jobs, improve quality of life and stimulate economic activity for communities that have experienced disinvestment. The goal of this program is to drive investment in infrastructure and public amenities that will invite more people back into Main Street districts and local city centers. The second round of RDMS funding builds upon $106 million in RDMS grants provided in 2022 – the state’s largest Rebuild Illinois investment focused on community revitalization.
“We empower our communities by connecting people with the resources they need to make the changes they want to see,” said Lt. Governor Juliana Stratton. “Downtown spaces are hubs for connection; people want to spend time together in public spaces when those spaces are clean, functional, and vibrant. I strongly urge communities that have experienced generational disinvestment to apply.”
Projects eligible for RDMS grants must be located in a commercial center or downtown area and may include, but are not limited to roadways, parking and public way improvements, investments in parks and venues or plazas for public use, sustainability upgrades, structural repairs, and mixed-use or transit-oriented development.
“The State of Illinois continues to prioritize promoting economic growth in communities throughout every corner of the state,” said DCEO Director Kristin Richards. “Through the RDMS and RISE programs, qualified entities are encouraged to apply for grant funding to revitalize downtown areas and boost economic recovery in areas that need the most support.”
Through the RISE Implementation Program, the State is allocating funding toward economic development projects or initiatives identified in plans produced with support from RISE Local and Regional Planning grants to accelerate economic recovery from the COVID-19 pandemic. Eligible projects may include capital and non-capital projects such as water, sewer, or broadband infrastructure, investment in affordable housing, local workforce development programming, retrofitting or renovating facilities and buildings, investment in site readiness for business development, and tourism promotion programming.
Qualified entities for both programs include EDOs, local units of government and private for-profit and non-profit businesses. RDMS projects must be located in a commercial corridor or downtown area, and RISE projects must be aligned with a RISE Planning grant recovery plan. Applicants must demonstrate consistency with applicable local or regional economic development plans and provide letters of support from elected officials and other community stakeholders. Successful applicants will demonstrate that their project will address barriers to economic growth and/or stimulate economic growth and recovery. Eligible entities are limited to one submission.
Through a competitive Notice of Funding Opportunity (NOFO), qualified entities can apply for grants, with awards ranging from $250,000 to $2 million, with a minimum 25% match required for local units of government and 50% match for all other applicants. Applications will be accepted until July 22, 2024, at 5:00 p.m.
To view the NOFO and apply for the grant, and register for the information webinar please visit the DCEO website. Interested parties are encouraged to reach out to CEO.GrantHelp@illinois.gov for application assistance.
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Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct