The Vermont House Committee on Commerce and Economic Development reviewed a draft of Senate Bill S.117 Friday, focusing on three areas: an expedited rulemaking option for VOSHA, removal of redundant subminimum-wage authority, and new penalties and reporting requirements for late workers' compensation payments. The committee did not take a formal vote and directed staff to refine language with agency and industry input.

Committee members began with an overview from Sophie Zidatni of the Office of Legislative Council, describing several technical edits and one substantive addition allowing the Vermont Occupational Safety and Health Administration to use an expedited rulemaking process "if the Vermont Occupational Safety and Health Administration is simply adopting verbatim a rule that's coming down from the federal, OSHA, with no changes. This is going to allow a sort of expedited, rule making process," she said, while noting the expedited path would still require notice to the committee chair and the Senate.

The bill also proposes removing a provision that previously allowed the Commissioner of Labor to recommend a subminimum wage for certain groups. Zidatni said the draft deletes language that applied to apprentices and individuals with disabilities because existing law already covers those groups; the Department of Labor asked for time to confirm whether deleting the language would unintentionally affect learners in work-based learning programs.

The most substantial discussion concerned workers' compensation provisions moved into S.117 from S.125. The draft would (1) add escalated administrative penalties for repeatedly late weekly benefit payments (5% for the first late payment after the established day, 10% for the second, 15% for the third and subsequent instances), (2) retain an existing 21-day rule for undisputed overdue benefits that provides a 10% addition plus interest and possible attorney fees, and (3) require employers or carriers to report late payments to the Commissioner within seven calendar days after payment and to "attest to the reasons for the late payment and the steps being taken to avoid future late payments." The draft also would authorize an administrative penalty if an employer fails to report as required.

Dirk Anderson of the Department of Labor urged caution on implementation and recommended periodic aggregated reporting rather than an immediate requirement for daily notices. "I'd rather see that in the form of the quarterly reports as opposed to just a flood of emails or letters," Anderson said, arguing quarterly or annual reporting would let agency staff analyze trends without being overwhelmed by individual reports.

Kendall Smith, Deputy Commissioner at the Department of Labor, asked the legislative staff to confirm that removing the subminimum-wage language would not disrupt work-based learning programs and said the department would follow up with the committee by Monday.

Stakeholder representatives requested more time to review and refine the reporting and timing language. Jamie Fean, representing the American Property Casualty Insurance Association, said he "envisioned the reporting, not necessarily a statutory requirement with a potential for additional administrative penalties and such, but a way to gather the information" to inform whether stiffer penalties are warranted. Fean and other insurers raised questions about which date should determine lateness (the "established day" versus a five-business-day rule tied to the pay period) and how escalating penalties would interact with existing 21-day statutory provisions.

David Mickenberg, speaking for an association for justice, warned the committee that reports limited to late fees paid would undercount late payments because "late fees paid doesn't mean that there weren't late payments," noting many claimants are unrepresented and may not prompt a fee assessment.

Committee members discussed options for the reporting mechanism, including session law temporary reporting, a statutory reporting requirement with a form created by the department, and an on-off reporting authority for the commissioner so the requirement could be activated when needed. One committee member proposed an initial quarterly reporting period with a departmental review after a year to recommend whether to continue quarterly reporting or switch to annual summaries.

Other technical items addressed in the draft included a correction to how the Department of Labor calculates the highest benefit cost rate to align more closely with the federal method, and a provision moving four workers' compensation sections (including medical case management language) from S.125 into S.117 without substantive change. The draft also retains a plan to revisit notification thresholds under the WARN-type employer notice provision and a timing alignment related to a prior pandemic employment payment while the department updates its UI IT system.

No motion or formal vote on S.117 was recorded. Committee members scheduled follow-up work over the coming days and asked legislative counsel and Department of Labor staff to produce clarified language and reporting forms for further consideration.

The committee closed the S.117 discussion by asking staff and stakeholders to refine the reporting language and timing so the panel can consider a revised draft at its next scheduled meeting.