Month: April 2024

Employee compensation costs jumped more than expected to start the year, providing another danger sign about persistent inflation. The employment cost index, which measures worker salaries and benefits, gained 1.2% in the first quarter, the Labor Department reported Tuesday.

On a year-over-year basis, compensation costs for civilian workers increased 4.2%, still above a level the Fed feels is consistent with its 2% inflation goal, though down from 4.8% a year ago. Wages and salaries rose 4.4% while benefits costs increased 3.7%.

State and local government workers saw their compensation costs rise 4.8%, down just narrowly from the same period in 2023. The bigger increase likely was attributable to the high level of that group belonging to unions, which saw compensation costs increase 5.3%, compared to just a 3.9% gain for nonunion workers.

The Fed watches the ECI as a significant measure of underlying inflation pressures.

The rate-setting Federal Open Market Committee begins its two-day meeting Tuesday. Markets have priced in virtually no chance that the FOMC will change the target for its overnight borrowing rate from the current range of 5.25%-5.5%.

The Universities of Wisconsin will vacate a former two-year college in Richland County this summer, despite months of discussions with local officials who once hoped to save the former two-year college. County leaders say they’re now facing a potential “economic crisis.”

Classes at the campus known by locals as UW-Richland ended in July 2023 after enrollment fell to around 60 students. Initially, UW administrators stopped short of saying the campus would close, holding several meetings with county leaders with a goal of redefining the former college.

One of the questions during those discussions was what to do about a 75-year memorandum of agreement that outlines the county’s role in maintaining the county-owned campus buildings and property in exchange for the UW branch campus “to provide an adequate instructional and administrative staff.” That lease is not set to expire until 2042.

Over the past year, some Richland County board members have argued the UW should have to reimburse the county for maintenance costs and lost economic opportunities caused by the closing. The loss estimates ranged from $1.5 million to tens of millions of dollars.

On Tuesday, county officials received a letter from Universities of Wisconsin Vice President for University Relations Jeff Buhrandt, notifying them that UW-Platteville, which oversees the Richland campus, “will completely vacate the Richland County Campus by July 1.”

“While we are disappointed that we were unable to find a path forward, we also know this change can provide significant new opportunities in Richland County,” Buhrandt said.

The letter also notified the county that recent legislation offering $2 million grants to counties where branch campuses are closed was the state’s final offer.

“This potential investment by the State of Wisconsin represents the full consideration of the costs expressed by Richland County,” Buhrandt wrote.

U.S. economic growth was much weaker than expected to start the year, and prices rose at a faster pace, the Commerce Department reported Thursday.

Gross domestic product, a broad measure of goods and services produced in the January-through-March period, increased at a 1.6% annualized pace when adjusted for seasonality and inflation, according to the department’s Bureau of Economic Analysis.

Consumer spending increased 2.5% in the period, down from a 3.3% gain in the fourth quarter. Fixed investment and government spending at the state and local level helped keep GDP positive on the quarter, while a decline in private inventory investment and an increase in imports subtracted. Net exports subtracted 0.86 percentage points from the growth rate while consumer spending contributed 1.68 percentage points.

Spending patterns also shifted in the quarter. Spending on goods declined 0.4%, in large part to a 1.2% slide in bigger-ticket purchases for long-lasting items classified as durable goods. Services spending increased 4%, its highest quarterly level since the third quarter of 2021.

The Biden administration on Tuesday announced a new rule that would make millions of white-collar workers newly eligible for overtime pay.

Starting July 1, the rule would increase the threshold at which executive, administrative and professional employees are exempt from overtime pay to $43,888 from the current $35,568. That change would make an additional 1 million workers eligible to receive time-and-a-half wages for each hour they put in beyond a 40-hour week.

On January 1, the threshold would rise further to $58,656, covering another 3 million workers.

While hourly workers are generally entitled to overtime pay, salaried workers are not if they earn above a certain pay level and supervise other workers, use professional expertise or judgment or hire and fire workers, among other duties.

The new standard could be legally challenged by industry groups that have argued that excessively raising the standard exceeds Labor’s authority and adds heavy regulatory and financial burdens or compliance costs.

Some companies could lift workers’ base pay to the new threshold to avoid paying overtime or convert salaried workers to hourly employees who need to punch a clock. Others could instruct salaried employees to work no more than 40 hours a week, bringing on part-time workers to pick up the slack. Still others may reduce employees’ base pay to offset the overtime, effectively sidestepping the new requirement.

The Federal Trade Commission (FTC) on Tuesday voted to ban for-profit US employers from making employees sign agreements with noncompete clauses.

The FTC estimates that 30 million people – one in five US workers – are bound by a noncompete clause in their current jobs. And for most of them, the agency asserts, such a clause restricts them from freely switching jobs, lowers wages, stifles innovation, blocks entrepreneurs from starting new businesses and undermines fair competition.

The final rule is a somewhat narrower version of the proposed rule that the agency put out for public comment in January of 2023.

It will ban for-profit employers from issuing new noncompetes to anyone.

And – with one exception – it makes currently existing noncompete agreements unenforceable after the rule’s effective date, which is set at 120 days from the rule’s publication in the Federal Register.

The rule, however, does allow currently existing noncompete agreements for senior executives to remain in force. Senior executives are defined as workers earning more than $151,164 annually who also are in a “policy-making position.”

Employment lawyers expect there to be legal pushback from employers and business groups that may delay enforcement of the rule while it is challenged in court, and possibly prevent it from ever going into effect if those suing the FTC prevail.

Daryl Joseffer, chief counsel of the U.S. Chamber’s Litigation Center, characterized the FTC rule banning noncompetes as an “administrative power grab.” “They’re trying to regulate a century-old business practice across the entire economy,” Joseffer said.

If the rule is allowed to stand, it opens “a pandora’s box, where they can micromanage any aspect of the economy,” the Chamber’s chief policy officer, Neil Bradley, asserted.

In 2023, 89.1 billion cubic feet per day (Bcf/d) of natural gas was consumed in the United States, the most on record. Since 2018, U.S. natural gas consumption has increased by an average of 4% annually.

Monthly natural gas consumption set new records every month from March 2023 through November 2023. U.S. natural gas consumption has risen in the electric power sector as coal-fired electric-generating capacity has declined.

Last year, the largest monthly increases in natural gas consumed by the electric power sector were in July and August, despite cooler-than-normal temperatures than during those months in 2022. Natural gas consumption in the electric power sector, which typically increases in July and August to meet air-conditioning demand, increased by 6% in July and August 2023 compared with those months in 2022, setting monthly records of 47.5 Bcf/d in July and 47.2 Bcf/d in August.

U.S. coal production units are retiring as the nation’s coal fleet ages and coal-fired generators are replaced by generators using natural gas and renewables. Although natural gas-fired power generation increased by 6% in July and August of 2023 compared with a year earlier, overall electricity growth year-on-year was flat in July at 412 billion kilowatthours (kWh) and rose just 3% in August to 410 billion kWh.

The most natural gas consumed in the United States in any month of 2023 occurred in January at 106.6 Bcf/d, but consumption was 8% less than in January 2022. Warmer-than-average temperatures reduced natural gas consumption in the residential and commercial sectors to meet space-heating demand.

The United States Supreme Court on Wednesday made it easier for workers who are transferred from one job to another against their will to pursue job discrimination claims under federal civil rights law, even when they are not demoted or docked pay.

Workers only have to show that the transfer resulted in some, but not necessarily significant, harm to prove their claims, Justice Elena Kagan wrote for the court.

The justices unanimously revived a sex discrimination lawsuit filed by a St. Louis police sergeant after she was forcibly transferred, but retained her rank and pay. Sgt. Jaytonya Muldrow had worked for nine years in a plainclothes position in the department’s intelligence division before a new commander reassigned her to a uniformed position in which she supervised patrol officers.

Muldrow sued under Title VII of the Civil Rights Act of 1964, which prohibits workplace discrimination on the basis of race, sex, religion and national origin. Lower courts had dismissed Muldrow’s claim, concluding that she had not suffered a significant job disadvantage.

“Today, we disapprove that approach,” Kagan wrote. “Although an employee must show some harm from a forced transfer to prevail in a Title VII suit, she need not show that the injury satisfies a significance test.”

Kagan noted that many cases will come out differently under the lower bar the Supreme Court adopted Wednesday. She pointed to cases in which people lost discrimination suits, including those of an engineer whose new job site was a 14-by-22-foot wind tunnel, a shipping worker reassigned to exclusively nighttime work and a school principal who was forced into a new administrative role that was not based in a school.

The state of Wisconsin’s debt has continued to fall from its height during the Great Recession, and when adjusted for inflation is lower than at any point in at least 25 years. That’s according to a new report from the Wisconsin Policy Forum.

As of December 2023, the state had $11.14 billion in total outstanding debt, according to a state Department of Administration report. That’s down 2.6 percent, or more than $296.3 million, from the prior year before adjusting for inflation.

“On an inflation-adjusted basis, that represents the lowest debt level for the state in at least a quarter-century,” the report states.

The share of the state’s main tax revenue going to debt payments fell below 2.7 percent in both 2021 and 2022, its smallest share since 1984 excluding years when the state skipped making debt payments because of budget challenges. The state has long sought to keep annual debt payments lower than 4 percent.

The share of state transportation fund revenues going to debt payments climbed from 7 percent in 2002 to 18.9 percent in 2019. The state projects that share to fall to 16.2 percent by 2025, due to increases in vehicle registration and other fees, as well as a decrease in new transportation borrowing.

“Going forward, transportation debt will likely remain an ongoing concern for Wisconsin unless lawmakers and Gov. Tony Evers identify additional revenues for the transportation fund, make the general fund transfers permanent, or sharply scale back road projects,” the report says. “None of these options are politically appealing, making this an issue to watch in the next state budget.”

A case argued before the Wisconsin Supreme Court this week could have a major impact on future operations of state government.

The court heard oral arguments Wednesday in a lawsuit challenging the Republican-controlled Legislature’s ability to block land conservation purchases in perpetuity. Attorneys representing both Democrat Governor Tony Evers and Republican lawmakers say the court’s ruling could have far-reaching implications for state government.

The lawsuit filed by Governor Evers in October argues GOP-controlled committees like the budget-writing Joint Finance Committee and Joint Committee on Employee Relations are violating the Wisconsin Constitution’s separation of powers through “legislative vetoes.” The committees have used those vetoes over the last year to block the release of state funds, including shutting down Knowles-Nelson Stewardship Program purchases and and denying pay raises for state university employees that had been approved in the state budget.

Assistant Attorney General Colin Roth, who is representing Governor Evers, told justices the committee vetoes are usurping the governor’s ability to execute legislation and funding passed by the Legislature. “Put more simply, may the legislative branch both make the law and then control its execution?” Roth asked. “Of course not.”

Roth said a ruling in the governor’s favor would have impacts well beyond the Knowles Nelson fund. “The rules we’re adopting, I believe, will invalidate many, if not most, legislative committee vetoes that are on the books,” Roth said.

Conservative Justice Rebecca Bradley asked Roth how the Wisconsin Constitution doesn’t authorize lawmakers to delegate power to legislative committees, but does authorize the Legislature to cede power to state agencies.

“Doesn’t your argument jeopardize the entire administrative state in the state of Wisconsin?” Bradley said.

Attorney Misha Tseytlin, who is representing GOP leaders like Assembly Speaker Robin Vos, R-Rochester, and State Sen. Howard Marklein, R-Spring Green, urged justices to proceed with caution.

“They (Evers) would have this court overturn how our state government has functioned for almost a century, ever since the beginning of the modern administrative state,” Tseytlin said.

The U.S. Equal Employment Opportunity Commission (EEOC) today issued a final rule to implement the Pregnant Workers Fairness Act (PWFA), providing important clarity that will allow pregnant workers the ability to work and maintain a healthy pregnancy and help employers understand their duties under the law.

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 final rule will be published in the Federal Register on April 19 and becomes effective 60 days after publication in the Federal Register.

Highlights from the final regulation include:

·       Numerous examples of reasonable accommodations such as additional breaks to drink water, eat, or use the restroom; a stool to sit on while working; time off for health care appointments; temporary reassignment; temporary suspension of certain job duties; telework; or time off to recover from childbirth or a miscarriage, among others.

·       Guidance regarding limitations and medical conditions for which employees or applicants may seek reasonable accommodation, including miscarriage or still birth; migraines; lactation; and pregnancy-related conditions that are episodic, such as morning sickness. This guidance is based on Congress’s PWFA statutory language, the EEOC’s longstanding definition of “pregnancy, childbirth, and related medical conditions” from Title VII of the Civil Rights Act of 1964, and court decisions interpreting the term “pregnancy, childbirth, or related medical conditions from Title VII.

·       Guidance encouraging early and frequent communication between employers and workers to raise and resolve requests for reasonable accommodation in a timely manner.

·       Clarification that an employer is not required to seek supporting documentation when an employee asks for a reasonable accommodation and should only do so when it is reasonable under the circumstances.

·       Explanation of when an accommodation would impose an undue hardship on an employer and its business.

·       Information on how employers may assert defenses or exemptions, including those based on religion, as early as possible in charge processing.

More information about the PWFA and the EEOC’s final rule, including resources for employers and workers, is available on the EEOC’s “What You Should Know about the Pregnant Workers Fairness Act” webpage.