Call to Order and Roll Call
The 4th meeting of the Interim Joint Committee on Labor and Industry was held on Wednesday, September 14, 2016, at 11:30 AM, at the 39th Labor-Management Conference at Kentucky Dam Village State Resort Park in Gilbertsville, KY. Senator Alice Forgy Kerr, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Senators Perry B. Clark, Denise Harper Angel, Ernie Harris, and Reginald Thomas; Representatives Lynn Bechler, Larry Clark, Will Coursey, Jeffery Donohue, Dennis Horlander, Terry Mills, and Jim Stewart III.
Guests: Deputy Secretary Mike Nemes, Kentucky Labor Cabinet; Commissioner Ervin Dimeny, Department of Workplace Standards, Kentucky Labor Cabinet; Deputy Commissioner Michael Donta, Department of Workplace Standards, Kentucky Labor Cabinet; and Commissioner Dwight Lovan, Department of Workers’ Claims, Kentucky Labor Cabinet.
LRC Staff: Carla Montgomery, Adanna Hydes, Andrew Manno, and Sasche Allen.
Approval of Minutes
A quorum was not obtained for the approval of the minutes from the August 18, 2016 meeting. The minutes will be voted upon at the next Interim Joint Committee on Labor and Industry meeting on October 20, 2016.
Announcements and Introductions
Co-Chair Alice Forgy Kerr announced that Co-Chair Rick Nelson was unable to attend the meeting, and Representative Brent Yonts was unable to attend due to a meeting he had with the Canadian Consul General. Representatives Terry Mills and Will Coursey introduced special guests and offered comments.
Kentucky Department of Workplace Standards Apprenticeship Program Update
Secretary Mike Nemes, Labor Cabinet, gave an overview of some of the goals and new initiatives of the cabinet. Kentucky manufacturers and businesses need skilled workers, and the current workforce is being depleted due to retirements of older individuals in the workforce. A $200,000 grant from the United States Department of Labor (USDOL), with an application in for more funds, will help the cabinet propel its apprenticeship program and assist in supplying Kentucky employers with a well trained workforce. The cabinet has hired a new director for its apprenticeship program and three new people whose job will be to meet with employers and assess their needs as far as the type of workers that they require and the skills they should have. Secretary Nemes mentioned the cabinet’s effort to train incarcerated workers to prepare them to rejoin the workforce and expunging Kentucky felons’ records and getting them involved in the apprenticeship program. The Secretary revealed the cabinet’s new slogan for the apprenticeship program, “kentucky TRAINED. kentucky BUILT.”
Commissioner Ervin Dimeny, Department of Workplace Standards, and Deputy Commissioner Mike Donta, Department of Workplace Standards, provided more detail about Kentucky’s registered apprenticeship program. A registered apprenticeship program is a USDOL program in partnership with businesses and labor organizations. The National Apprenticeship Act of 1937 authorized the Federal government, in cooperation with the states, to oversee the nation’s apprenticeship system. The goal is to provide on the job training and industry specific classroom education, producing highly skilled workers. There is a minimum of 144 hours a year of related classroom instruction within programs that range from one to five years and can be set up as time based, competency based, or a combination of both. This creates a beneficial program for both apprentices and employers. Completing an apprenticeship program in Kentucky guarantees an apprentice a national certification.
The USDOL recognizes over 1000 occupations, and there are approximately 500,000 apprentices nationwide, with 2,800 in Kentucky. Over 250,000 employers have registered apprenticeship programs across the nation. Although there are 133 individual and joint sponsored programs in the state representing over 1,000 employers, those numbers increase daily. About 70 percent of the programs are non-union and 30 percent are union. Of the registered apprenticeship programs in Kentucky, about 40 percent are construction related. Kentucky’s registered apprenticeship programs range from building trades to advanced manufacturing, but the cabinet is looking to expand its program into healthcare and early childhood education.
Commissioner Dimeny said that the Labor Cabinet wants to refocus its attention to partnerships with state agencies like the Cabinet for Economic Development, the Education and Workforce Development Cabinet, and the Kentucky Community and Technical College System (KCTCS) to maximize its footprint in the Commonwealth. The Commissioner said there has been cross training of all partnering staff to better access the workforce. With its detailed assessments, the Labor Cabinet can then meet with employers to design a unique and specialized registered apprenticeship program for each individual employer. Each specified program will address the current and future needs of the employer. The cabinet hopes this approach with the apprenticeship program will change the way citizens view opportunities in the Commonwealth and supply the workforce with ample skilled workers to create a region that employers want to relocate to. The cabinet has a three year plan with a goal to double the number of apprentices in the state.
Deputy Secretary Mike Nemes addressed a concern from an audience member by stating the Labor Cabinet has hired staff to go throughout the state and inspect current registered apprenticeship programs to ensure regulations are still being followed and standards of the USDOL and the cabinet are still being met.
Deputy Commissioner Mike Donta replied to another concern from a member of the audience by saying safety of employees is a top priority for the Department of Workplace Standards. The department trains the apprenticeship program instructors on safety so that they can educate their apprentices. The department partners with Kentucky Safety and Health Network Incorporated, which focuses on increasing awareness of occupational safety and presents an annual conference to promote workplace safety and health. It assists the department with safety training after the observation was made that some newer employees entering the workforce were not being adequately trained on workplace safety.
After Representative Lynn Bechler posed a question, Deputy Commission Mike Donta explained that beginning in 2008 the USDOL allowed three types of apprenticeship programs which included time based, competency based, and a hybrid of both. Every person learns at a different pace and the different programs, such as the three year program and four year program, can accommodate various learning styles and paces. An apprentice can expect the same starting salary whether they complete a three year or a four year program. Commissioner Ervin Dimeny said that some apprenticeship programs with a shorter time frame may be completed by existing employees of companies or business that want to improve their skills. They may not need to complete one of the longer programs.
Co-Chair Alice Forgy Kerr recognized Representatives Jeff Taylor and Dennis Keene, who were in the audience. Answering a question from Representative Taylor, after he referenced his career at Tennessee Valley Authority, Commissioner Ervin Dimeny stated that communication between partners and involved groups along with identifying resources that are already available will help to eliminate redundancy in training amongst existing infrastructures of companies and businesses.
Deputy Commissioner Mike Donta addressed a question from an audience member by saying there are industry developed assessments and curriculum within the apprenticeship programs that are based on Federal standards and guidelines. The USDOL is looking into national standardized tests; however, an apprenticeship certificate earned in Kentucky would be valid in any state. Senator Reginald Thomas said that some apprentices may be ill prepared in some areas and lack some soft skills. He suggested that from an employer and state standpoint it would be more beneficial to offer additional education in areas such as math, English, and communication to accompany whatever specialized area of training the apprentice is receiving.
Secretary Mike Nemes mentioned the recently established $100 million bond pool for technical education facility upgrades and the $15 million Kentucky Dual Credit Scholarship program for high school students that can be used for apprenticeship programs.
Deputy Commissioner Mike Donta concluded by thanking the members for the financial support from the General Assembly. In the past five years, there have been 1,466 individuals to complete a registered apprenticeship program with an average completion wage of $23.36 an hour and an average yearly wage of $46,700. Those individuals in total contributed $68,462,200 to Kentucky’s economy. The Deputy Commissioner pointed out a 2015 study released by the USDOL that placed Kentucky in the top six states of growth, and the Labor Cabinet was recently told by a visiting representative from the USDOL that Kentucky is in the top three in the nation for its youth apprenticeship programs. He gave a reminder of the cabinet’s TRACK Program, which is a partnership between the Kentucky Department of Education’s Office of Career and Technical Education and the Labor Cabinet to provide secondary students with career pathway opportunities into Registered Apprenticeship programs.
Responding to an inquiry from Representative Will Coursey, Secretary Mike Nemes confirmed that union programs are eligible to apply for funds from the $100 million bond pool for technical education recently established and that many applications received thus far have been from unions.
Kentucky Department of Workers’ Claims Coal Workers' Pneumoconiosis Update
Commissioner Dwight Lovan, Department of Workers’ Claims (DWC), gave an update on coal workers' pneumoconiosis (CWP) that included graphs which illustrated the current state of claims, agreements, awards, and dismissals. As of August 31, 2016, there have been 561 new CWP claims filed this year, and by the end of 2016 it is anticipated there will be 841 new claims filed, making it the largest number of new CWP claims filed since 1993. In December 2011, the Gardner v. Vision Mining (2009) decision by the Kentucky Supreme Court, which found the provisions of KRS 342.316 regarding the consensus and panel process used to determine eligibility for CWP benefits to be unconstitutional under the equal protection clause, altered how new claims were handled. As a result of delays due to the changes in the process and increased coal miner layoffs, the DWC started to see an increase in the number of new claims filed beginning in 2012. Although the Department attempts to stay up to date of handling claims, each individual claim now has to have an independent evaluation, which further delays resolution. Based upon expectations, statute of limitation issues, and statute of repose issues, the trend of the increase in new claims filed will continue. Kentucky now has the fewest number of coal miners since the late 1800s. Since miners do not file a claim until they stop working. An increase in claims continues as layoffs continue.
One issue that was elaborated on was the mandatory independent evaluations. Each applicant has to have an independent evaluation that is performed by an evaluator chosen by the DWC. The Administrative Law Judge (ALJ) relies heavily on these evaluations when making determinations. The problem lies in the fact that the number of new claims being filed is greater than the number of evaluations being performed. There are on average about 45 evaluations performed each month, however, an average of 80 new claims are filed each month. One ALJ, who has an extensive workers’ compensation background, has been working diligently to resolve claims as quickly as possible with the relatively recent addition of mandatory independent evaluations and the increase in new CWP claims in general.
Another developing matter that Commissioner Lovan explained was the increase in the number of cases of progressive massive fibrosis (PMF), also known as complicated pneumoconiosis. It is the most advanced and incapacitating form of CWP. Most of these cases have been found in the Appalachian region of Pennsylvania, West Virginia, western Virginia, and eastern Kentucky. Eastern Kentucky has not only seen a rise in PMF but also in the number of individuals with rapidly progressing pneumoconiosis, which occurs when a person goes from simple pneumoconiosis to complicated pneumoconiosis in a short amount of time. Anyone who has been diagnosed with complicated pneumoconiosis is irrefutably presumed to be totally occupationally disabled, and thus a permanent total award is automatically given. Commissioner Lovan said this is one area that is extremely troubling.
The Commissioner said that the number of CWP dismissals has remained relatively constant. Some data on dismissals became skewed at one point due to the number of cases that had stayed in abeyance for a long period of time. Once those cases were settled, prioritizing the claims with the worst cases to be handled first, the statistics on the number of dismissals adjusted and became more consistent. Thus, there is currently a 40 to 45 percent award rate in all claims filed, compared to 60 percent in 2014 and 2015. With the combination of the existing rate of claim filings and the difficulties of obtaining independent evaluations, the department will continue to face obstacles in regards to claims going through the normal process without being in any period of abeyance.
Replying to Representative Terry Mills, Commissioner Lovan said there are an estimated 990 claims pending. In an effort to remain consistent, the Department takes out 40 to 50 of the oldest cases a month and schedules informal conferences with those claimants. There are on average about 45 evaluations performed each month, however, there are an average of 80 new claims filed per month. There is a 30 to 40 percent settlement rate on those cases. A normal workers’ compensation case takes approximately 180 days to go through the process from start to finish, but a CWP claim takes double that amount of time. The Commissioner said that before the Gardner v. Vision Mining (2009) decision there were some cases that had been in abeyance for up to three years, but, as of right now, he is unaware of any cases filed before 2015 that have not been resolved.
Co-Chair Alice Forgy Kerr announced that the next Interim Joint Committee on Labor and Industry meeting will be October 20, 2016 at the Kentucky Horse Park, in conjunction with the Interim Joint Committee on Economic Development and Tourism. There being no further business, the meeting was adjourned at 12:26 p.m.