On April 23, 2024, the U.S. Department of Labor released a final rule that raises the salary threshold to qualify for certain overtime exemptions under the Fair Labor Standards Act. EAP Exemption The Fair Labor Standards Act (“FLSA”) generally requires an employer to pay an employee time and a half for all hours worked in excess of 40 hours in one work week. Employees who are employed in a bona fide executive, administrative, or professional capacity (“EAP” or “white-collar” exemption) are exempt from minimum wage and overtime protections. To fall within the EAP exemption, an employee must generally meet three tests: 1. Be paid a salary; 2. Be paid at least a specified weekly salary level; and 3. Primarily perform executive, administrative, or professional duties, as provided in the DOL’s regulations. The DOL’s final overtime rule increases the standard salary level for white collar exempt employees in two stages: 1. On July 1, 2024, the standard level will increase from $684 to $844 per week ($43,888 annually). 2. On January 1, 2025, the standard level will increase to $1,128 per week ($58,656 annually). HCE Exemption Employees who are paid a salary, earn above a higher total annual compensation level, and satisfy a minimal duties test fall within the exemption for highly compensated employees (“HCE”). The final rules also increases the annual total compensation for the HCE exemption from $107,432 to $151,164 in two stages: 1. On July 1, 2024, the HCE level will increase from $107,432 to $132,964 per year. 2. On January 1, 2025, the HCE level will increase to $151,164 per year. The final rule includes a mechanism for automatically updating these salary and compensation levels every three years based on then-current earnings data. The first automatic update will occur on July 1, 2027. The final rule does not change the current rule which allows employers to use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard for special salary levels for the exemptions. Although the final rule will likely face legal challenges, employers should consider adjusting compensation structures for exempt employees earning more than $35,564 per year but less than the new EAP exemption minimum of $58,656 per year. Additionally, employers may need to consider reclassifying employees who do not meet the new minimum salary thresholds. 

On April 15, 2024, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued a final rule to implement the Pregnant Workers Fairness Act (“PWFA”). The PWFA requires most employers with 15 or more employees to provide “reasonable accommodations,” or changes at work, for a worker’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an undue hardship. The PWFA requires a covered employer to engage in the interactive process with the employee. Leave (paid or unpaid) is permitted as an accommodation only if no other reasonable accommodation exists, or unless the employee asks for leave as an accommodation. The final rules define “known limitation” as one that is arising out of pregnancy, childbirth or related medical condition and communicated to the employer (even if the limitation would not be considered a disability under the Americans with Disabilities Act). There is no level of severity required to trigger an employer’s obligation and, therefore, any physical or mental condition related to pregnancy is covered by the PWFA. An employer may request information to confirm the connection between a communicated limitation and the pregnancy, childbirth, or related condition. An employee or applicant may be “qualified” even if they cannot perform the functions of the job with an accommodation, so long as they can “in the near future,” which has been defined as roughly 40 weeks of each limited job function. Employers should be aware that some accommodations may not require documentation. Additionally, the EEOC has interpreted the PWFA to include providing accommodation for or related to abortion and/or fertility treatment. On April 25, 2024, 17 states filed a lawsuit challenging the final rule entitling workers for time off and other accommodations for or related to abortion.

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A new ruling from the U.S. Supreme Court will make it much easier for many employees to prove an allegation of unlawful discrimination under Title VII. The Court’s ruling washes away a rule, followed by many courts, that required Title VII claimants to show not just any harm but harm that is significant. This is an artificially high bar that the law’s language does not permit, the Court decided. Instead, the Court said, Title VII plaintiffs need to show only that the challenged action resulted from discrimination and left them worse off than they were before – and not necessarily in a “significant” way. The case was brought by Jatonya Clayborn Muldrow, who worked as a sergeant for the St. Louis Police Department. New boss transfers police sergeant Between 2008 and 2017, Muldrow was a plainclothes officer who investigated cases involving public corruption and human trafficking. In addition, she oversaw a gang unit and led a gun crimes unit. She also had FBI credentials, a take-home vehicle, and the authority to pursue investigations outside of St. Louis. A division commander heaped high praise on her, but a new commander later reassigned her to a uniformed job because, according to the Court’s decision, he wanted a man in the plainclothes position. Unwelcome changes for employee Muldrow’s rank, pay and benefits did not change after the transfer , but other things did. For example: she stopped working with high-ranking officials on departmental priorities she started doing some patrol work she lost her FBI status and the car that came with it, and she stopped working a regular Monday through Friday schedule and began working a rotating schedule that included weekends. Muldrow summed it up this way: “I went from straight days, weekends off with a take-home car and more visibility and responsibility within the department to a rotating schedule with few weekends off, assigned to . . . uniformed patrol,” with “responsibilities being limited to that of administrative work” and “supervising officers on patrol.” Trek to Supreme Court begins She sued to allege that the transfer was illegal sex discrimination under Title VII. A federal district court and federal appeals court both ruled against her on the basis that the transfer did not result in a significant change that produced a material employment disadvantage. The appeals court said she had experienced only “minor changes in working conditions,” while noting that she still maintained a supervisory role in the new position. Translation: Even if there were things about the transfer that Muldrow didn’t like, they weren’t bad enough to violate Title VII. The Supreme Court then agreed to consider the question of “whether an employee who challenges a transfer under Title VII must meet a heightened threshold of harm – be it dubbed significant, serious, or something similar.” Supreme Court rules on Title VII The High Court said the courts below in this case – and all other courts that have added this “significant harm” requirement in Title VII suits — have done so without adequate justification. Title VII “imposes no such requirement,” it explained, and courts are not free to add one. Instead, the statute bans discrimination against enumerated protected classes with respect to terms, conditions or privileges of employment, it said. And while the law’s language requires Muldrow to show there was some “disadvantageous” change, it does not force her to show the transfer produced significant harm, it ruled. Many claimants have lost their Title VII claims because courts rewrote the statute to require significant harm, the Court said. Those days are now over. “To make out a Title VII discrimination claim,” the Court said, “a transferee must show some harm respecting an identifiable term or condition of employment.” The court vacated the appeals court’s decision and remanded the case for further proceedings. Whether there is some level of harm that can be so slight as to be deemed de minimis remains to be seen. But make no mistake: The line has moved significantly in jurisdictions that imposed the “significant harm” requirement, and to a place that greatly favors employees. Guidance for HR — and a final note In practical terms, what does this ruling mean for employers? Most immediately, it requires employers to more carefully scrutinize whether a forced transfer produces any negative consequences for the transferred employee. And it’s not just major negative consequences to look for, like a salary cut or demotion. Instead, employers should now ask additional, more nuanced questions while taking a holistic view of the changes that the move produced. How did the transfer affect the employee’s work schedule? Did the employee lose a company car? Did the change result in a longer commute time? Did the employee lose other employment perks? Almost any negative consequence of a forced transfer, coupled with some evidence of discrimination based on membership in a protected class, now places all Title-VII covered employers squarely in the danger zone. One final note: This case was about a job transfer, but the Court’s reasoning was based on Title VII text that generally bans discrimination with respect to all terms and conditions of employment. That means its reach will likely not be limited only to cases involving transfers. Muldrow v. City of St. Louis, Missouri, No. 22-193 (U.S. 4/17/24). 

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At the close of the eighth week of the Legislative Session, the House and Senate have passed their deadline to adopt committee reports. The House passed its second reading deadline, with Monday, March 4 being the final day for Senate Bills in the House and House bills on Second reading in the Senate. The session must conclude by March 14, although legislative leaders have set their sights on a March 8 end date. The Week in Review HB 1001, Education and Higher Education Matters (Rep. Chuck Goodrich, R-Noblesville) passed the Senate Appropriations Committee yesterday (11-3). The bill would introduce significant additions to work-based learning for high school students. HB 1001's primary fiscal function is to allow money from the 21st Century Scholarship Program or a Freedom of Choice grant to pay for post-secondary training and apprenticeships. Sen. Jeff Raatz (R-Richmond) is the principal Senate sponsor. HB 1093, Employment of Minors (Rep. Kendell Culp, R-Rensselaer), passed the Senate Appropriations Committee yesterday (9-4). The bill seeks to allow minors to work longer hours with fewer restrictions, such as letting students work later on school nights. Proponents of the bill argue that it aligns the Indiana Code with federal statute. Sen. Brian Buchanan (R-Lebanon) is the principal Senate sponsor. HB 1199, Economic Enhancement District (Rep. Julie McGuire, R-Indianapolis), passed out of the Senate (42-7). The amended legislation limits the power of the Indianapolis Economic Enhancement District (EED), making it expire after 10 years, excluding residential property, and allowing certain businesses to opt in or out of the program. The oversight board created by this bill would have considerable power to limit the EED. HB 1216, Medicaid Reimbursement for Certain Detainees (Rep. Greg Steuerwald, R-Avon), passed unanimously out of the Senate Appropriations Committee yesterday (14-0). The bill would expand health providers' ability to involuntarily detain specific individuals by allowing them to be reimbursed by Medicaid for the expense. The bill would accomplish this by classifying care for mental health emergencies" as “medically necessary.” Sen. Tyler Johnson (R-Leo) is the principal Senate sponsor. HB 1235, Prohibited Causes of Action for Concerning Firearms (Rep. Chris Jeter, R-Fishers) passed the Senate on a third reading on Tuesday, Feb. 27 (33-15). The bill would further protect gun manufacturers from litigation. The bill is specifically aimed at ending a decades-old lawsuit by the city of Gary against gun manufacturers and retailers. The bill would allow the state to reserve the right to sue the gun industry. The principal Senate sponsor is Sen. Aaron Freeman (R-Indianapolis). SEA 1, Reading Skills (Sen. Linda Rogers, R-Granger), a bill addressing Indiana’s youth literacy crisis, passed the House on Tuesday, Feb. 27 (68-24). The bill was amended in the House to provide increased funding for summer schools and establish exemptions for English learners. The Senate concurred with the amendments on Thursday, which was sent to the Governor for signature. SB 4, Fiscal and Administrative Matters (Sen. Chris Garten, R-Charlestown), was passed and amended by the House (95-0). The House amendments removed the mandates on the Legislative Services Agency and shifted the burden to the Legislative Council. The bill would increase the legislature's power over state agencies and revert funds unused by agencies to the general fund. However, the author dissented from the changes, and the bill is headed to the conference committee. SB 5, Lead Water Line Replacement and Lead Remediation (Sen. Eric Koch, R-Bedford) passed the House (93-0). The bill would modern Indiana’s lead pipelines and give the state more power to deal with landlords who refuse to cooperate with updating lead pipelines. Its changes were concurred upon in the Senate and are now headed to the Governor. SB 52, Prohibition on use of dedicated lanes (Sen. Aaron Freeman, R-Indianapolis) was not called down on second reading; effectively killing the legislation due to deadlines. Speaker Todd Huston released a statement saying he agreed with city and IndyGo officials to drop the bill in exchange for IndyGo prioritizing the maintenance of two lanes of traffic flow. While this may mean fewer dedicated transit lanes than initially, Indianapolis’s Blue Line can continue as planned. SB 202, State educational institution matters (Sen. Spencer Deery, R-West Lafayette), passed the House (66-31) after being amended to clarify protections for tenured professors. The controversial bill addresses intellectual diversity and freedom of speech on college campuses, and the Senate concurred with the amendments. The governor’s office heads the bill. This Week Ahead The session must conclude by March 14, although legislative leaders have set their sights on a March 8 end date. Below are the upcoming deadlines for both houses in the Indiana General Assembly: February 29th House 2nd Reading Deadline 29th Senate Committee Report Deadline March 4th House 3rd Reading Deadline 4th Senate 2nd Reading Deadline 5th Senate 3rd Reading Deadline 5th Last Day for Senate Adoption of Committee Reports without Rules Committee Approval 8th Anticipated Last Day 14th Last Day to Adjourn View House Schedule View Senate Schedule Conference Committees Next week, we will begin to see the conference committee process play out. As Sine Die quickly approaches, bills returned to their original chamber with changes must either receive a motion to concur or dissent. Once a motion to concur is adopted/voted on legislation’s chamber or origin, the bill heads to the governor for approval. A motion to dissent sends the bill to a conference committee. Click here for more information on the conference committee process. A conference committee grid displaying all of the engrossed bills returned with amendments can be found on the Indiana Assembly's Website.

Indiana State Chamber Legislative Report

The Corporate Transparency Act, which goes into effect in January 2024, may require your small business to report information about ownership to the government.

Chamber Calls on Business Community to Take 'Health First Indiana' Pledge The Indiana Chamber of Commerce and its Wellness Council of Indiana (WCI) are urging businesses and organizations to engage with their local health departments as a statewide push begins to get Hoosiers healthier. Health First Indiana, passed by the 2023 Indiana General Assembly, provides $225 million in funding over two years to county health departments to prioritize public health and safety. To launch the engagement part of the initiative, which includes a pledge act, we joined the Indiana Department of Health for activities yesterday during Public Health Day at the Statehouse. The Indiana Chamber and WCI believe that health is wealth. We applaud the state’s investment in its public health infrastructure through Health First Indiana, which will lead to a healthier Indiana and ultimately support the state’s ability to attract and retain business. Health First Indiana focuses on offering core public health services, including infant health, chronic disease prevention, trauma and injury prevention, and more. "A healthy, thriving workforce is paramount to the prosperity of the state’s economy,” says State Health Commissioner Lindsay Weaver, M.D., FACEP. “I’m grateful for the partnership with the business community and for the leadership of the Indiana Chamber of Commerce in its support of Health First Indiana.” The Indiana Chamber views the aspiration of having healthy and prosperous communities and citizens so vital that it’s one of the six pillars of its recently released long-term visioning plan for the state, Indiana Prosperity 2035. Two of the organization’s long-term goals are to reduce smoking levels to less than 15% of the state’s population and obesity levels to less than 20%. Businesses are encouraged to be part of the process and take the Health First Indiana Pledge. This entails establishing a series of goals intended to create community partnerships through collaboration and communication with local health departments and more. Employers can find additional information on the Health First Indiana Pledge Act at www.indianachamber.com/healthfirst , while further details on the overall initiative are available at www.healthfirstindiana.in.gov . Bills to Improve Childcare, Education Attainment Pass Out of Committee SB 2, SB 8 / Chamber Supports Senate Bill 2, authored by Sen. Ed Charbonneau (R-Valparaiso), passed the House Family Children and Human Affairs Committee unanimously this week with the Chamber and a broad-based coalition of advocates testifying in support. With employers across Indiana increasingly citing childcare among their top external workforce barriers, the Chamber has made increasing childcare accessibility and affordability a top policy priority for the past two legislative sessions. Senate Bill 2 contains several Chamber-backed provisions that include accelerating efforts to remove regulatory barriers to expanding childcare access while maintaining essential safety standards, creating greater flexibility for innovative childcare models, increasing support for childcare workers and hard-to-serve childcare deserts, and ensuring greater data transparency and return on investment reporting regarding the state’s investments in early learning. The bill now heads to the House Ways and Means Committee for consideration next week. Senate Bill 8, authored by Sen. Jean Leising (R-Oldenburg), passed the House Education Committee this week, also via a unanimous vote, with strong support from the Chamber. In a talent-driven economy, there is perhaps no metric that matters more than increasing the number of Hoosiers completing education and training beyond high school. Senate Bill 8 aims to make the attainment of postsecondary credentials easier and more affordable for both Indiana high school students and working-age adults. The bill’s key provisions include 1) requiring high schools to offer the core college-level courses that satisfy the first-year course requirements of most degree programs, 2) streamlining the "reverse transfer" process for granting two-year associate degrees to individuals who completed the requisite credits at a four-year college, and 3) increasing the availability of accelerated bachelor's degree programs that can be completed within three years at the state’s universities. The bill is now expected to return to the full House for consideration on a second reading. Legislation Addressing Nursing Shortage Passes Senate HB 1259 / Chamber Supports Earlier this week, the Senate passed House Bill 1259, authored by Rep. Brad Barrett (R-Richmond), which helps address our lack of nurses, which is a growing crisis in Indiana. This challenge could become a severe impediment to access to health care, which is an important metric in the Chamber’s Indiana Prosperity 2035 plan. Indiana faces a growing nursing shortage with thousands of open positions each year. To address this critical need, HB 1259 seeks to expand the nursing workforce by streamlining licensure for foreign-educated nurses and increasing on-the-ground training opportunities. Building on a 2022 nursing bill, HB 1259 proposes giving hospitals the flexibility to waive an 18-month clinical experience requirement for instructors. Proponents argue this will allow more experienced nurses to mentor student nurses, ultimately increasing the number of graduates entering the workforce. The urgency for action is undeniable. Testimony in both chambers mentioned the staggering amount of open nursing positions statewide, a number expected to rise with an aging population requiring more complex care. House Bill 1259 represents a potential step towards alleviating this pressure and ensuring Hoosiers have access to quality health care. We applaud the Indiana General Assembly for focusing on this issue and look forward to continuing to address it in future years. The bill now moves back to the House, where it will be eligible to be concurred upon. Quality of Place Initiative Stalls Out SB 61 / Chamber Supports House Ways and Means Chair Rep. Jeff Thompson (R-Lizton) announced this week that Senate Bill 61 would not be considered by the committee. The bill would allow a community to consider a petition to create a tourism improvement district (TID) and levy assessments from within the district to support local tourism. Until last week, there was little opposition to the proposal. The state director for the National Federation of Independent Business (NFIB) raised concerns over the bill, stating that the organization had surveyed its members and found little support for the idea. The main objection was the level of support required to pursue a TID. The bill requires 65% of businesses within the district as well as the owners of 65% of the assessed value in the district to support the petition. The NFIB argued that this threshold was not sufficient to protect the remaining business owners who may be opposed to paying an assessment or who may not benefit from increased tourism. The Chamber disagrees with this characterization of the bill, however. The 65% threshold is improved from the introduced version of the bill, which required only 50% of the total number of businesses within the proposed district to support the petition. It’s fair to say that not all businesses may directly benefit from the investments in the district. However, the legislation requires the assessments to be levied proportional to the benefits a business might receive from the investments. This provision would protect an insurance agency or auto mechanic that receives little or no benefit from local tourism from contributing to the activities in the district. This is just the second time this legislation has been introduced, and the Chamber looks forward to working during the interim to help resolve these conflicts and build a coalition to support this concept in the next legislative session. PFAS Definition Still Working its Way Through the Legislature HB 1399 / Chamber Supports Legislation authored by Rep. Shane Lindauer (R-Jasper) is intended to clarify the existing Indiana definition of PFAS chemistries. The Chamber supports the bill, which requires the Environmental Rules Board to use the definition in certain rules concerning industrial processes and research and development. There has been confusion over the complex chemical makeup of a class of chemistries that has been lumped into the broad term PFAS. The definition currently in the Indiana Code is based on the more hazardous soluble firefighter foam that degrades and can accumulate/permeate water, soil, and cells. However, non-soluble PFAS is an important product that is safer and used in various industries and products including medical devices, pharmaceuticals, metals, automotive applications, batteries, food packaging, and more. There is no commercially viable alternative chemistry currently available to replace it. In addition, it would take a significant amount of regulatory work and time to get such a replacement approved for use in most products. The bill passed the House Environmental Affairs Committee 7-5 and the full House by a vote of 64-30 during the first half of the legislative session. It was heard in the Senate Environmental Affairs Committee earlier this week; the vote is expected to occur on Monday. Lawmakers Advance Legal Reforms SB 226 / HB 1090 / HB 1160 / Chamber Supports The session of proactive legal reform legislation continued this week – mostly all positive news for business. No need to bury the lede, seatbelt admissibility legislation is one step closer to becoming law after the Senate passed the measure 36-13; the culmination of over 20 years of concerted effort. House Bill 1090, authored by Rep. Jim Pressel (R-Rolling Prairie), will allow juries to hear whether the victim of a vehicle accident was wearing a seat belt at the time of the crash. Employers are often brought into personal injury lawsuits by victims regardless of how remote their involvement in the accident actually was because they're considered to have "deep pockets." More than 90% of Hoosiers wear seat belts today, and HB 1090 is the result of compromise discussions among the plaintiffs and defense. If successful, there would be no better send-off for the soon-to-retire Rep. Jerry Torr (R-Carmel) than getting this bill across the finish line as he has been working on this and other legal reform issues since joining the Legislature in 1995. Speaking of Rep. Torr, he is the sponsor of Senate Bill 226 on attorney's fees, authored by Sen. Mike Gaskill (R-Pendleton), which took a surprising route to second reading this week. The bill provides a much-needed update to a 1995 statute pertaining to qualified settlement offers that have become practically useless given current-day legal practices. After the House Judiciary Committee passed the bill unanimously last week, a legislative fiscal analyst slapped a $1 million price tag on it, causing it to go to the Ways and Means Committee. Fortunately, on Wednesday, Rep. Torr explained to the budget-oriented committee that the bill might actually save the state money. The committee agreed and passed the bill with bipartisan support 22-0. Finally, the Senate Judiciary Committee amended and then passed unanimously House Bill 1160, authored by Rep. Matt Lehman (R-Berne), on civil proceeding advance payment contracts and commercial litigation financing. As covered in previous Legislative Reports, the bill expands the third-party lawsuit lending statute to commercial litigants. At issue was the extent to which lawmakers would permit foreign funds from being invested in Indiana lawsuits. After its amendment, HB 1160 precludes foreign adversaries from investing in lawsuits filed in the state but will allow “friendly” countries to fund plaintiffs’ claims. The bill now heads to the full Senate, but Rep. Lehman and the Chamber are unconvinced it is in an acceptable form. The Chamber has communicated to legislators that all parties – and the court – should know at the outset via automatic disclosure whether any foreign money is involved in the lawsuit. Third-party funding is a means to increase claims against employers. While the Chamber is not opposed to the practice in principle, we feel that maximum transparency about who has a financial interest in the lawsuit’s outcome is in the best interest of all parties and the judicial system as a whole. Senate Passes Dangerous Assignment of Benefit Legislation SB 132 / Chamber Opposes in Part After a pair of amendments to remove Chamber-opposed language failed on tie votes, the House Insurance Committee passed Senate Bill 132, authored by Sen. Liz Brown (R-Fort Wayne). This bill contains a provision regarding the assignment of benefits (AOB) for dentists that runs contrary to the Chamber’s longstanding position opposing such legislation. The Chamber testified in opposition to the dental AOB provisions of SB 132 along with the Indiana Manufacturers Association, Indiana Insurance Institute, and the National Association of Business and Insurance Professionals. The Chamber believes AOB could weaken or destroy healthcare networks that negotiate on behalf of employers, individuals, and other private payers with medical providers to provide health care at reasonable rates. As a reminder, AOB is the practice by which insurers would be compelled to make reimbursements directly to out-of-network medical providers, eliminating much of the incentive for providers to agree to reduce rates to join a network. Non-contract/out-of-network care providers insist they find it difficult to collect payment for insured individuals after the patient has been reimbursed by the health plan. Some dentists want the ability to receive direct payment (a benefit of joining the network) without joining the network and adhering to the patient protections/cost savings it provides. Currently, there is little way for an individual to negotiate prices directly with a medical provider. Without health networks to negotiate rates on behalf of an individual, there are few economic forces to regulate prices set by medical providers. Maintaining the integrity of health insurance networks is critical to the employer’s ability to be able to provide employee benefits at a reasonable cost to attract and retain quality employees. This legislation now moves to the full House, where the Chamber will continue to work with legislators and allies to amend this dangerous language.