Still "Open for Business" – New Wisconsin Legislation to Preempt Most Local Employment Ordinances

by Littler
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In recent years, cities, counties, and other local government bodies across the country have enacted ordinances increasing the minimum wage, granting paid and unpaid sick leave, placing restrictions on how employees are scheduled, and requiring employers to enter into “labor peace agreements” with unions.  As this activity has intensified, employers with operations in multiple jurisdictions within a state or across multiple states have been confronted with the onerous task of complying with a patchwork of conflicting employment rules. Wisconsin is about to join the list of over a dozen states that have taken action to preempt local governments from passing such ordinances. 

ASSEMBLY BILL (“AB”) 748

Wisconsin's state legislature recently passed AB 748, which generally prohibits “local government units” (including cities, villages, towns, counties, and other political subdivisions) from enacting or enforcing ordinances addressing key labor and employment matters. Governor Scott Walker is expected to sign it into law. Key provisions of this bill are briefly summarized below.

Hours, Overtime, Scheduling

AB 748 provides that no local ordinance may regulate “employee hours or overtime, including scheduling employee work hours or shifts.”  This does not include certain ordinances regulating the hours a business may operate or hours or overtime of certain traveling sales crew workers.  

Employment Benefits

Another provision stipulates that no local ordinance may require an employer to “provide certain employment benefits,” “provide a minimum level of employment benefits,” or “prescribe the terms or conditions of employment benefits provided to its employees.” The term “employment benefits” includes “anything of value, other than wages and salary, that an employer makes available to an employee, including a retirement, pension, profit-sharing, insurance, or leave benefit.” 

Salary Information

Notably, AB 748 references the recent trend of limiting an employer's use of salary history information. The bill instructs that no local ordinance may prohibit “an employer from soliciting information regarding the salary history of prospective employees.”

Wage Payments, Claims, and Collections

Under AB 748, no local ordinance may regulate “wage claims or collections.” The Wisconsin Department of Workforce Development will continue to investigate and attempt to resolve such disputes under applicable state laws such as Wis. Stat. 109.09. 

Professions Requiring Licensing and Certification

AB 748 provides that no “political subdivision” may impose any occupational licensing requirements on an individual who works in a state-regulated profession “that are more stringent than the requirements imposed by the department that regulates that profession.”  It is unclear why this prohibition does not apply to all “local government units” and what that means for city, town, village, and county regulations that impose more stringent licensing requirements than the state.

Labor Law Preemption

Finally, AB 748 includes two provisions ostensibly aimed at outlawing government-imposed “labor peace” or collective bargaining agreement terms.  A “labor peace agreement” is an agreement between a union and an employer waiving certain rights available under state or federal law such as the right of an employer to oppose unionization through lawful education activities and the right to insist on a secret-ballot election to determine whether an uncoerced majority of employees really want a union.

Under AB 748, neither the state, any local government unit, nor any of their employees may “require," “compel,” or “attempt to compel” any person to waive or agree to waive their rights under “state or federal labor laws” as a condition of obtaining any regulatory or other approval.  Anyone who knowingly violates this provision is guilty of a Class A misdemeanor.  AB 748 also prohibits the state and local government units from using other means – e.g., statutes; ordinances; regulations; policies; contract zoning, permitting, or licensing requirements; or any other condition including a “condition of regulatory approval” – that would “require any person to accept any provision that is a mandatory or nonmandatory subject of collective bargaining under state or federal laws.”  Existing labor peace agreements previously mandated by state or local law remain enforceable until they are renewed, modified, or extended; at that point, such agreement may be voluntarily entered into but are no longer required.   

Notable Exceptions

A late change to AB 748 removed a prohibition on local governments regulating employment discrimination. Therefore, local employment discrimination ordinances remain enforceable.

Additionally, businesses operating in an “electronics and information technology manufacturing (EITM) zone" and certain job-training and apprenticeship programs connected with jobs in EITM zones are exempted from AB 748’s “labor peace agreement” provisions.

OPEN FOR BUSINESS

AB 748 is a major step toward ensuring that employers and employees have uniform and consistent employment regulations wherever they do business across the state.  We will continue to monitor AB 748 and report on any significant developments. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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