Under The Dome

Legislative Interim Wrap-up 

Each year, we provide a comprehensive list of new business-related legislation enacted during the year.  That list is not yet complete as the flurry of bills that passed during the last week of session are still making their way to the Governor’s desk for his consideration.  We expect the final report to be ready for publication in a few weeks.  In the meantime, below is the status of major bills the Chamber was working on during the last few weeks.

Temporary Caregiver Expansion – Both H.7171 and S.2121 passed the House and Senate following a major change in the House Labor Committee. The Committee amended the bills by eliminating the increase in the dependents’ allowance, eliminating the expansion of the benefit to new groups of employees and lengthening the benefit to seven weeks beginning January 1, 2025, and to eight weeks beginning January 1, 2026 (the original bill called for a six week increase in benefits).  The House further amended the bills on the floor to restore the original bills’ language to increase the dependents’ allowance from $10 to $20.  Both H.7171 and S.2121 were transmitted to the Governor June 20th.

Data Transparency and Privacy – S.2500 SubA and H.7877 SubAaa were transmitted to the Governor’s office on June 20th and June 21st, respectively.  These bills require any person or entity that processes personal data to identify all categories of information the controller collects, when the controller may disclose such information, how a customer may exercise their customer rights, the purpose for processing the personal data, categories of personal data shared with a third party, and means to contact the controller. Entities that control or process personal data of not less than 35,000 customers or at least 10,000 customers and derive more than twenty percent (20%) of gross revenue from the sale of personal data are subject to additional disclosure requirements and must allow customers the right to opt out of the collection of personally identifiable information. There is an exemption for entities subject the federal Gramm Leach Bliley Act. Language was also added to ensure businesses with rewards type programs can still collect the data needed to continue the programs. Any violation of this act would constitute a violation of the general regulatory provisions of commercial law and constitute a deceptive trade practice; however, no private right of action was included in the legislation.  These bills do not become effective until January 1, 2026, giving the business community time to digest the many changes in the bill and to recommend further amendments next year.

Citizens Bank Tax Proposal – H.7927 SubA and S.3152 SubA passed the House and Senate and were transmitted to the Governor on June 21st and June 20th, respectively. These bills allow a financial institution to elect to be taxed under the single sales factor test like many another multi-jurisdictional businesses in Rhode Island.  

Decarbonization of Buildings - H.7617 SubA was amended from its original form to a comprehensive study to be conducted by the EC4 committee.  It was passed by the Senate in concurrence but has not been transmitted to the Governor yet.  The committee is charged with collecting data on buildings – public and privately-owned – with 25,000 square feet or more.  Information to be collected includes:  1. A summary of the State's building sector emissions using the best available data on what is known about the energy use intensity and emissions from large buildings;  2. An inventory of properties that would be subject to benchmarking and building performance standard requirements, including building type and size; 3. A summary of the best available data on current energy sources for large buildings, including delivered fuels such as oil, coal, and propane, natural gas, grid electricity, district energy systems, and on-site renewable energy; 4. The estimated costs pertaining to expected retrofits, alterations, and repairs that may be required to comply with the benchmarking program standards; 5. Identification of the State agency or agencies with relevant roles and responsibilities to develop and implement benchmarking and performance standards for large buildings; 6. An estimation of the staff and other resources, and associated annual budget, needed to develop and implement benchmarking and performance standards for large buildings; and 7. A recommended timeline for establishing and implementing benchmarking and performance standards for large buildings.  The original bills banned building permits for new or renovated buildings unless those building were designed to be all-electric ready or all electric, depending upon the building.  S.2952 SubA as amended does not match the final version of H.7617 SubA.  It was not turned into a study, although many of the data collection points from the House bill are contained in the Senate version.  S.2952 SubA retained the requirements to switch new large buildings and renovated buildings to electric-ready status.  The final fate of H.7617 SubA is unclear.

Noncompetition Agreements – Both H.8059 SubA and S.2436 SubA passed the House and Senate and were transmitted to the Governor June 20th.  These bills, passed the House 70-2 and the Senate 37-0, ban the use of noncompetition agreements between employers and employees unless the agreement is entered into as part of the sale of a business entity or equity interest in a business.  Employers are still permitted to enter into agreements with employees not to share trade secrets, customer lists, or future business plans.  Businesses covered under the Gramm-Leach-Bliley Act (financial institutions) are exempt.

Family Leave Expansion - S.2467 and H.7793 both died in the House Labor Committee.  These bills increased the number of unpaid family leave benefit weeks provided to employees from thirteen weeks every two years, to twenty-four weeks every two years.

Minimum Wage Increase – All bills proposed to further increase the minimum wage died in committees. However, the current law calls for an increase in the minimum wage to $15 per hour beginning January 1, 2025.

Payment Stubs and Mini Employee Handbook - S.2123 SubA and a similar bill, H.7790, both died in the House Labor Committee.  These bills proposed changes to an employer’s responsibilities as it relates to providing employees with statements of earnings.  Today employers must include the hours worked, deductions from gross earnings and an explanation of those deductions.  The amended version of S.2123 added items such as the last four digits of the social security number, deduction explanations, the employer’s address and name, and output information if pay is based on quantity.  It also required employers to provide a type of “mini employee handbook” to employees. The information included items such as: wage information, benefits, holiday information, sick time, and travel and expense policies.  

Washington Bridge Statute of Repose – S.3145 and H.8318 both died in their respective Judiciary Committees.  While the bills were directed at the Washington Bridge, they gave rise to concerns about retroactive changes to law.  The bills would have retroactively changed the statute of repose for the Washington Bridge.  What does that mean?  Under current law, any person, firm, corporation or legal entity that is involved in the design, construction, repair, modification, etc. to real property can be sued for damages or injuries within ten years of the “substantial completion” of a construction project.  This was litigated in 1985 and upheld by the Rhode Island Supreme Court and it is similar to laws in 46 other states.  Both S.3145 and H.8318 proposed to change the law as it pertains to the Washington bridge by extending the statute of limitations to ten years from the “date of discovery” or by December 1, 2033, whichever is later, unless the case would be time barred as of the date this legislation becomes law.  So, if the bills had passed into law July 1, 2024, any entity involved in the Washington bridge where “substantial completion” did not occur before July 1, 2014, would be reachable to sue for liability.  In some instances, they extended the window of liability to close to 20 years.  The reason for setting a time limit to sue in most cases relates to ability to find eye witnesses with memories that are accurate, loss of potential evidence, the influence of other factors that are hard to quantify or qualify over the years.  Insurance companies rely on statutes of limitations and statutes of repose to assess risk in setting premiums or deciding to insure entities.

Junk Fees - S.2503, attempted to address what is often referred to as “junk fees.” It died in the Senate Commerce Committee.  The legislation created a new section to the unfair deceptive practices act, stating it is an unfair practice to offer goods or services to the public and to fail to include a notification disclosing any mandatory fees including the “nature and purpose” of those fees. S.2503 created significant ambiguity by using language that does not distinguish between fees that are fixed and determinable upfront versus fees that vary based on consumer choices during the ordering process.   The Federal Trade Commission (FTC) is working on this very issue now. The Chamber advocated that it is prudent to allow that process to move forward before the State promulgates proposed regulations covering the same subject matter.  

Individual Liability Employment Liability - S.2203 died in the Senate Judiciary Committee. This bill created individual liability for any person, employer, or employees who directly or indirectly commit any act declared to be an unlawful employment practice.  It seemed to be aimed at overturning a 2017 Rhode Island Supreme Court decision - Mancini vs City of Providence. The case involved a Providence Police Sergeant who alleged he was illegally denied a promotion based on discriminatory factors; and he attempted to sue then Chief of Police, Hugh Clements, Jr. personally.  The Rhode Island Supreme Court stated, “allowing for the possibility of individual li¬ability would have a predictably chilling effect on the discretionary management decisions of supervisory em¬ployees.”  

Captive Audience Legislation - S.2785 and H.7106 died in the House Labor Committee.  These bills proposed to protect the free speech rights of employees in the workplace, but also limited the first amendment rights of employers.  Both pieces of legislation prohibited employers from requiring non-managerial employees to attend a meeting to learn about legislative proposals or regulatory matters as well as meetings to provide information concerning labor organization efforts. If enacted, these bills would have severely limited an employer’s ability to educate employees about legislation, including legislation that would materially impact the business’ operations or the employee’s day-to-day job responsibilities.

Psychological Bullying Bill - S.2473 SubA and H.8044 both died in the House Labor Committee.  These bills begin by stating that employees have a right to a physically safe work environment and to a psychologically safe workplace.  Under the bills, employers have a “general duty” to provide a work environment free from all forms of psychological abuse and to ensure that all employees are treated respectfully and with dignity. “Psychological abuse” is defined as “mentally provocative harassment.  Mistreatment that has the effect of hurting, weakening, confusing, or frightening a person mentally or emotionally.”  The bills called upon employers to adopt policy procedures to comply with the law and train managers and supervisors to handle complaints.  They included an annual reporting process.  Employers would have been liable for failing to take appropriate measures to provide employees with a psychologically safe work environment. Penalties included economic, compensatory and punitive damages.  Any person who aids, abets, incites, or coerces another person in an action not permitted under the legislation was also guilty.