ARIZONA HOUSE OF REPRESENTATIVES Fifty-fifth Legislature Second Regular Session
	Senate: COM DPA/SE 5-3-1-0 | 3^rd Read 16-12-2-0 House: COM DPA/SE 6-3-0-1

---

SB 1278: labor organizations; fiduciary guidelines; definitions

S/E: labor benefits organization; damages; definitions

Sponsor: Senator Mesnard, LD 17

Caucus & COW

Summary of the Strike-Everything Amendment to SB 1278

Overview

Outlines damages against a labor benefits organization for certain benefits and an exemption from the liability.

History

Pursuant to A.R.S. § 23-1421, a labor organization that collects benefit monies or union dues is subject to similar fiduciary guidelines as required by employers or third-party administrators providing benefits to employees. These requirements include:

1) annually disclosing specified financial information to its members;

2) permitting a member to obtain various benefits of the member's own choosing instead of the benefits offered by the labor organization;

3) any fringe benefit contributions received by the labor organization being refunded to the employee; and

4) not accepting dues or benefits contributions for employees that have not voluntarily joined the union.

Provisions

1. Repeals current statute relating to fiduciary guidelines for labor organizations. (Sec. 1)

2. Entitles an employee to recover triple the calculated damages from a labor benefits organization for benefits paid by the employee. (Sec. 2)

3. Entitles an employer to recover triple the calculated damages from a labor benefits organization for benefits incurred by the employer. (Sec. 2)

4. Outlines what level of monies paid for benefits is excessive and the calculated damages that may be recovered from them. (Sec. 2)

5. Specifies that a benefit established by a labor benefits organization is considered:

a) disproportionate and excessive if it has an hourly or daily rate and the underlying expense is not directly tied to the individual contribution for that employee; and

b) discriminatory if it does not result in a direct and additional benefit to an employee who works additional hours. (Sec. 2)

6. Asserts that a labor benefits organization has a duty to act in the best interests of its member employees, including not charging excessive rates. (Sec. 2)

7. Asserts that an employer is presumed to be in a disadvantageous position to a labor benefits organization if it uses a standardized labor union agreement and the employer has limited negotiating power. (Sec. 2)

8. Exempts a labor benefits organization from liability for benefits if it:

a) provides a reconciliation to its member employees that contains specified information that allows an employee to determine the costs and expenses of the benefits provided by the labor benefits organization;

b) allows an employee to opt out of any health, pension, vacation leave or sick leave benefits and allows the employer to withhold payment to the labor benefits organization for that particular benefits category;

c) eliminates any penalty for an employer to use employees that are not affiliated with the labor benefits organization; and

d) eliminates any penalty for an employee or employer to terminate the relationship with the labor benefits organization. (Sec. 2)

9. Applies the benefits liability and exemption to any labor benefits organization that negotiates the rates or collects monies for employee benefits on behalf of a resident of Arizona or an employer that is located in Arizona. (Sec. 2)

10. Excludes from the benefits liability and exemption: a) an employer of an employee, insurer, insurance agent, investment management firm or third-party administrator preforming a purely administrative role; and b) a government employee. (Sec. 2)

11. Defines benefits and labor benefits organization. (Sec. 2)

Amendments

Committee on Commerce

1. Adopted the strike-everything amendment.

---------- DOCUMENT FOOTER ---------

                        SB 1278

Initials PRB/NM          Page 0 Caucus & COW

---------- DOCUMENT FOOTER ---------