This document summarizes several issues affecting the HR profession in Ohio, including workers' compensation, unemployment compensation, employment/labor law, minimum wage, and health care. For workers' compensation, it discusses the surplus in the state insurance fund and recent employer cost savings. For unemployment compensation, it outlines the status of state trust fund solvency nationally and in Ohio. It also reviews potential legislation related to various employment and labor law topics, minimum wage rates in Ohio compared to the federal rate, and recent health care legislation in the state.

1. z
z
Affecting the HR Profession in Ohio
Presented by Tony Fiore
Director, Government Affairs
2015 Ohio SHRM Employment
Law + Legislative Conference
June 3, 2015

2. z
Workers’ Compensation
Unemployment Compensation
Employment/Labor Law
Minimum Wage
Health Care

3. z
z
Workers’ Compensation

4. z
BURNING QUESTION
Why don’t we privatize
Ohio’s workers’
compensation system?

5. z
BWC State Insurance
Fund (SIF) Surplus

6. z
What was your cut?
Another Billion Back
+ Provides a one-time rebate of $1 billion for private
employers and public-taxing districts.
+ Increases BWC’s commitment to safety by up to $35
million over the next two years.
+ Creates several new safety initiatives that leverage
BWC’s occupational health and safety expertise to
create innovative solutions for improving the safety,
health and wellness of Ohio’s workforce.

7. z
Recent Employer Cost Savings
Private Employers
+ Reduced private employer average base rates, bringing
combined collections over the last four years down by $409
million
+ Jan 22 – BWC proposed another 10.8% reduction (21.4%
overall reduction since 1/1/2011)
Public Employers
+ Reduced average rates for public employers to their lowest
level in more than 30 years.

8. z
Prospective Billing
A switch to a prospective billing system will provide the
following benefits to Ohio employers:
+ Overall base rate reduction of 2 percent for private employers
and 4 percent for public employers
+ Opportunities for more flexible payment options
(up to 12 installments)
+ Better opportunities for BWC to provide quotes online or via
the phone
+ Increased ability for BWC to detect employer non-compliance
and fraud

9. z
Important Dates

10. z
F CUS
Employers’

11. z
LEGISLATION
2015

12. z
Workers’ Compensation Legislation
+ HB51: IC Budget
+ HB52: BWC Budget
+ HB205: Self-Insurance/Privatization
+ HB206: IC – Keep Hearing Statistics
+ HB207: Third Party Tortfeaser Subrogation Fund
+ SB5: PTSD Compensable Fire, Police, EMT
+ SB27: Firefighter – presumed to incur cancer while on duty
+ SB149: PD + PTD eligibility – brain or spinal cord injuries w/loss of use

13. z
WHAT’S NEXT

14. z
z
Unemployment Compensation

15. z
What is happening nationally?
The U.S. Map above depicts the status of state trust fund solvency as of April 30, 2015.
RED states are those that were borrowing as of April 30, 2015 (including the Virgin Islands).
BROWN states are those that are currently using employer financed bonds to repay Title XII loans.
YELLOW states are those with positive balances of less than six months of benefits in the state trust fund.
GREEN states are those with more than six months of benefits in the state trust fund (including Puerto Rico).

16. z
Federal Law Regarding
Taxes + Borrowing
+UI benefits must be paid without regard to the state
TF balance
+Insolvent states must borrow from Federal
Unemployment Account (FUA)
+No established repayment schedule…But
+After 2 years of borrowing without repayment
employers begin to lose FUTA offset credit

17. z
Background on Federal +
State UI Taxes
+Federal Unemployment Tax Act (FUTA)
+Employers pay 6% annual tax on first $7,000 earned
by each covered employee
+Federal government gives 5.4% tax credit (effective
FUTA tax rate is .6% or $42/EE)
+However, credit is automatically reduced by .3% (or
$21/EE) each year after first two years states carries
loan balance

18. z
State Unemployment Tax Act
(SUTA)
+SUTA taxes are paid by Ohio employers
+Currently 221,000 active employers and another 5,000
reimbursing employers (typically public employers)
+71% of Ohio employers have 20 or fewer employees
+Only 2% of Ohio employers have more than 200
employees – these employers collectively employ 56%
of the total employees in covered employment

19. z
SUTA Taxes in Ohio
Ohio Employer Contribution
Rates
2008 2009 2010 2011 2012 2013 2014
Lowest Experience Rate 0.5% 0.7% 0.5% 0.7% 0.7% 0.3% 0.3%
Highest Experience Rate 9.2% 9.4% 9.4% 9.6% 9.1% 8.4% 8.5%
Mutualized Rate 0.2% 0.4% 0.2% 0.4% 0.4% 0.0% 0.0%
New Employer Rate (except
construction)
2.7% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7%
*Construction Industry 5.8% 5.8% 6.0% 6.4% 7.0% 7.7% 7.2%
Delinquency Rate 11.5% 11.8% 11.8% 12.0% 11.4% 10.5% 10.6%

20. z
Average Tax Per Employee
$198 $207
$243 $243 $252 $270 $288
$342 $315
$270 $270 $270 $270 $270 $270 $270 $270
$56 $56
$56 $56 $56
$56
$56
$74
$84
$105 $126 $147 $168 $189 $210 $231 $252
$0
$100
$200
$300
$400
$500
$600
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* 2016* 2017* 2018* 2019* 2020*
Avg SUTA per Employee Avg FUTA per Employee Total per Employee

21. z
Solvency of Ohio’s UI Trust Fund
-$3,000,000,000
-$2,000,000,000
-$1,000,000,000
$0
$1,000,000,000
$2,000,000,000
$3,000,000,000
Ohio UI Trust Fund Balance - 1980 to 2027 (est.)
Minimum Safe Level

22. z
How do we return to the
lowest FUTA tax?
+Repay Federal loan balance
+Don’t borrow in the future
+Rebuild state UI Trust Fund
+Comprehensive UI Reform
+ Revenue (Taxes)
+ Expenses (Benefits)
+ Integrity (Fraud, Waste, Abuse, Misclassification, Overpayments)
+ Reemployment (connections with the workforce)
+ Job creation (more people working = more tax revenue without
raising existing taxes on employers)

23. z
Potential Legislation
Workforce development/UI (HB 3 -H56/S3)
Soft skill certification
Penalty for not responding to employers’ call
More Comprehensive Reform Package Needed
HB105 – UI eligibility for military spouse voluntarily quitting
work when reassigned to different base

24. z
z
Employment/Labor Law

25. z
Employment Law
+Manager/Supervisor Liability
+Statute of Limitations
+Caps on Non-economic and Punitive Damages
+Exhaustion of Administrative Remedies
+Employer Affirmative Defense for Reporting Violations
+Sexual Orientation Discrimination

26. z
Employment Legislation
+SB70: social media
+SB65: credit history discrimination
+SB87: domestic workers
+HB180 + SB152: prohibit local hiring quotas
+HB56: public employer “ban the box”
+SB79: private/public employer “ban the box”
+HB170: no need for vaccine
+HB172: mug shot extortion

27. z
All Firearm-Related Legislation
+ HB16: imitation firearms
+ HB20: concealed handgun – school safety zones
+ HB35: firearms – prohibit seizure/registry
+ HB48: concealed carry – affirmative defenses – carry in “vulnerable” areas
+ HB59: firearms – increase mandatory prison term
+ HB 75: firearms – residential storage – prevent access by minors
+ HB78: firearms – regulate transfers
+ HB79: hunting license – issuance to felons
+ HB147: concealed handguns – revise licensing
+ SB103: home rule townships – regulate discharge of firearms

28. z
z
Minimum Wage

29. z
Minimum Wage
Source: U.S. Department of Labor

30. z
Ohio vs. Federal Minimum Wage
$4.25
$5.15
$6.85
$7.00
$7.30 $7.30 $7.40
$7.70
$7.85 $7.95
$8.10
$5.15 $5.15
$5.85
$6.55
$7.25 $7.25 $7.25 $7.25 $7.25 $7.25 $7.25
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
1/1/2006 6/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015
Ohio Minimum Wage Federal Minimum Wage

31. z
Minimum Wage Legislation
+SB25: Would raise minimum wage to $10.10 per hour
beginning January 1, 2016

32. z
z
Health Care

33. z
Health Care
+State addressed dependent age issue from 28 to 26
+State mandates for health plans
+State budget – HB 64

34. z
Health Care
+SB68: cover contraceptives/employee reproductive health
+There are 88 healthcare-related bills

35. z
Thank You!
Tony Fiore, Of Counsel
Kegler Brown Hill + Ritter
afiore@keglerbrown.com
keglerbrown.com/fiore
614.462.5428
@anthoniofiore
Director, Government Affairs
Ohio State Council of SHRM