2018 Utah Legislative Wrap-Up on Employment Issues

By Trenton L. Lowe

The 2018 Utah Legislature concluded on March 8, 2018. Although it was a record year for number of bills introduced, the Legislature passed 533 bills, two short of last year’s all-time record. Below, I summarize the employment-related bills that passed through the Legislature and will go into effect on May 7, 2018.

For assistance navigating how these bills may affect you and your company, contact the Labor & Employment Group at Clyde Snow & Sessions at 801.322.2516 or tll@clydesnow.com.

Governor Herbert has until today March 28, 2018, to either sign the bills into law, veto the bills, or do nothing and the bills become law. Governor Herbert has signed all of the following bills, except for HB 241. The language below assumes HB 241 will become law.

SB 75 – Labor Code Amendments
Sponsor: Sen. Daniel Hemmert (R-Orem)

          This law will provide for the Division of Industrial Accidents to reduce or waive entirely penalties imposed on employers who fail to procure workers’ compensation insurance.

          The Division will be able to waive the penalty if the following are true: (1) the violation is the employer’s first violation; (2) the period of noncompliance was less than 180 days; (3) the employer has since remedied the noncompliance; (4) no employee reported an injury during the period of noncompliance; or (5) the employer is a corporation whose employees are all officers and who has become compliant.

          The Division will be able to reduce the penalty if: (1) the violation is the employer’s first violation; (2) the employer has since remedied the noncompliance; (3) no employee reported an injury during the period of noncompliance; and (4) the employer, upon request from the division, submits its payroll records for the period of noncompliance. If a reduction of the penalty is granted, it shall be reduced by the “amount equal to the premium the employer would have paid for workers’ compensation insurance” based on the supplied payroll records.

          Procedurally, the law will require the Division – as opposed to the current voluntary nature – to deliver a written notice, via personal service or certified mail, of the noncompliance to the employer and, if necessary, issue an order requiring an employer to appear before the division and show cause why the employer should not be required to comply with workers’ compensation insurance laws.

          This is a big win for employers who, up until now, have been penalized for failing to procure workers’ compensation insurance. Now, if a violation occurs, the Division has authority to reduce or waive entirely any penalties upon a showing of positive action by the employer.

HB 241 – Post-Employment Restrictions Amendments
Sponsor: Rep. Mike Schultz (R-Hooper)

          The bill originally provided an amendment to the Post-Employment Restrictions Act (Utah Code §§ 34-51-102 and -201) to prohibit post-employment restrictive covenants for members of the media (newspapers, magazines, news agencies, radio stations, television stations, and television networks). The bill would have made illegal all non-compete provisions for employees of Utah’s media outlets.

          The bill met strong resistance from media executives, who lobbied against the bill and ultimately gutted the bill’s original intent via amendments. The bill as passed, applies only to “broadcasting employees,” or TV news employees (as opposed to all news media employees as originally conceived), and post-employment restrictive covenants are still allowed if: (1) the employee is an exempt employee under the Fair Labor Standards Act (FLSA); (2) the employment contract which contains the restrictive covenant is for fewer than four years; and (3) the news station terminates the employee for cause or based on the employee’s breach of the contract.

          The only protection for the employee arises from the enforceability deadlines of the restrictive covenant. The covenant expires at the earlier of: (a) one year after the employee’s separation from the news station, or (b) the day the original employment contract would have ended had the employee not separated from the news station. This means that if a 4-year employment contract is signed on January 1, 2019, it would run until December 31, 2022. If the employee is terminated for cause on December 1, 2022, the restrictive covenant is only valid until December 31, 2022, or one month instead of the maximum-allowed one year period.

HB 30 – Utah Antidiscrimination Act Amendments
Sponsor: Rep. James Dunnigan (R-Taylorsville)

          This bill amends the Utah Antidiscrimination Act and (1) removes the Utah Antidiscrimination and Labor Division’s (UALD) power to hold a hearing when a complaint is received; (2) instructs the UALD to assign a mediator (as opposed to the previously-assigned investigator) to offer mediation services in an attempt to settle the case prior to an investigation; (3) allows for the UALD to attempt settlement between the parties even if it finds that no discrimination or prohibited employment practice has occurred; and (4) removes the ability of the complaining party to amend the allegations.

          Currently, an investigator immediately begins investigating and attempts to settle the matter between the parties. Under this new law, the UALD will first assign a mediator to mediate the issue between the parties, and if that service fails or is refused by the parties, only then will an investigator be assigned to begin his or her process. At the conclusion of the investigation, even if the investigator finds that no illegal or prohibited employment practices occurred, the investigator may attempt a settlement between the parties. Additionally, this law removes the complaining party’s ability to amend the charge once filed.

HB 288 – Workers’ Compensation Claims Amendments
Sponsor: Rep. Ken Ivory (R-West Jordan)

          This law adds a new section to the Utah Code that makes it unlawful for an employer to interfere with an employee’s ability to seek workers’ compensation benefits or to retaliate against an employee for seeking workers’ compensation benefits. If an employer violates this law, the Division may impose a fine up to $5,000 for each violation.

HB 133 – Employment Amendments
Sponsor: Rep. Craig Hall (R-West Valley City)

          This law expands the definition of “relative” to include romantic partners, expanding the scope of nepotism rules applicable to public employees. In determining what constitutes a romantic partner, the length and depth of the relationship, nature of the partners’ interactions, and affirmation of the relationship by the partners, among others, may be considered. This law only affects public employees.

SB 40 – Workers’ Compensation Dependent Benefit Amendments
Sponsor: Sen. Karen Mayne (D-West Valley City)

          This law makes a small change to the weekly benefit provided to spouses and dependents from workers’ compensation. The weekly benefit per spouse or dependent increases from $5 to $20. Unlike the other bills listed here, SB 40 does not go into effect until July 1, 2018.