New State of Iowa Labor Laws as of July 1

On July 1, a few new labor laws will go on the books for the State of Iowa. They include new child labor and wage payment laws, amusement park ride insurance, workers compensation penalty benefits and an increase in contractor registration fees. Here is a brief rundown of each one:

HOUSE FILE 618 – CHILD LABOR / WAGE PAYMENT VIOLATIONS

HF 618 increases the fine for wage payment violations from $100 to $500. The bill states the evidence obtained by the Federal Government can be used as evidence that a business has violated the child labor law. (This was because current law did not allow evidence obtained by ICE to be used against them.)

The bill changes the legal standard for child labor violations from “willfully” to “negligently” allowing child labor. This is a compromise between the Attorney General and the business community because the AG wanted “strict liability” which is a must tougher legal standard. The grocers have some concern about this impacting them as they hire many younger employees.

Also, the bill increases the penalty for a parent or guardian who allows child labor or any person who furnishes child labor from a simple misdemeanor to a serious misdemeanor and instructs the Labor Commissioner to establish a civil penalty (of no more than $10,000) for child labor violations.

The House approved HF 618 on March 12 on a 97-0 vote and the Senate approved the bill on March 19 on a 48-0 vote. The Governor signed the bill on April 8.

SENATE FILE 318 – AMUSEMENT PARK INSURANCE / CONYENCE

SF 318 increases the insurance policy minimums needed to obtain an operator’s permit under Code chapter 88A, relating to amusement ride safety. The policy amount for bodily injury, death, or property damage in any one incident is raised to $1 million. Currently, the minimum amount required for bodily injury to or death of any one person is $100,000; for bodily injury to or death of two or more persons, $300,000; and for property damage, $5,000.

The bill also directs the elevator safety board to adopt rules regarding the submission of plans, drawings, and measurements concerning new conveyance installations and alterations. The bill also allows the labor commissioner to determine the form of an application for an installation permit for a new conveyance. An application is required to be submitted to and approved by the commissioner before an installation permit for a conveyance is issued.

SF 318 passed the Senate on a 47-0 vote on March 9 and passed the House on a 99-0 vote on April 16. The Governor signed the bill on April 24.

SENATE FILE 478 – STANDING APPROPRIATIONS BILL FOR FY 2010

SF 478 is the Standings appropriations bill for FY 09. The bill funds the property tax credits from the Property Tax Credit Fund, makes appropriations from the Cash Reserve Fund, puts limitations on several standing appropriations, ratifies the collective bargaining agreements and sets appointed officers salaries, sets the mental health allowed growth factor for FY 11, adds several bills or parts of policy bills that did not make it through the funnel deadline and makes several technical and corrective changes.

Here are some of the substantive provisions of Standings that take effect on July 1:

Section 110 – Workers Compensation Penalty Benefits

Section 110 makes changes to Chapter 86.13, which covers the imposition of additional workers’ compensation benefits because the benefits were unreasonably denied, delayed in payment or terminated. The bill provides that such additional benefits, up to 50 percent of the benefits wrongfully withheld, shall be awarded if a denial, delay in payment, or termination of workers’ compensation benefits occurs without reasonable excuse that was known to the employer or insurance carrier at the time the benefits were denied, delayed in payment, or terminated.

HF 791 is advocated by the Trial Lawyers Association in response to two Iowa Supreme Court cases (Keystone Nursing Care Center v. Craddock and City of Madrid v. Blasnitz) where the claimants were denied penalty benefits. Under current law, the Work Comp Commissioner may award a penalty of up to 50% of the weekly benefits that were “unreasonably” delayed/denied or terminated (although the word “denial” does not appear in 86.13, the word “delay” has been construed to include the circumstance where a claim is denied but ultimately determined to be compensable). The commissioner liberally assesses such penalties if employers/carriers do not have reasonable grounds to deny a claim, delay payment, or terminate weekly benefits.

Advocated as a “simple clarification” of existing penalty law by the Trial Lawyers. In actuality, it’s anything but. Sections 4a, 4c2, and 4c3 would limit and/or directly override the Supreme Court’s decisions in Craddock and Blasnitz. The upshot would be to limit employers/carriers’ defenses to penalty claims and to limit the appellate courts’ ability to correct erroneous penalty awards.

Division XVI — Contractor Registration Increase

Fees for contractor registration are increased from $25 every other year to $50 per year. Fees are deposited in the Contractor Registration Revolving Fund – not the GF. Out of state contractors may file a blanket bond for a two-year period. Establishes a contractor registration revolving fund. Fees from Contractor Registration are deposited in the fund. Moneys from the Fund are appropriated to the Labor Commissioner to pay actual costs and expenses of the Division of labor.

Moneys from the fund do not revert and the fund retains interest earned. The Commissioner may adopt emergency rules to implement these sections. Rules are effective immediately upon filing unless a later date is specified. Rules adopted shall also be published as a notice of intended action.

The House passed the bill on a 55-45 vote on April 25 and the Senate passed it on a 27-16 vote on April 26. The Governor signed the bill with item veto on May 26.

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