Happy Wednesday! In this week's Big I Buzz: The Department of Labor overtime rule was struck down by a Texas federal court judge. Plus, commercial auto insurance struggles persist in 2023.

DOL Overtime Rule Struck Down

On November 15, 2024, a Texas federal judge struck down the Department of Labor's (DOL) proposed updates to the overtime rule, which aimed to increase the salary threshold for overtime exemptions. Judge Sean Jordan ruled that the DOL exceeded its authority, effectively invalidating the rule nationwide.

In light of the ruling, the minimum salary threshold is once again set to $35,568, and the threshold for highly compensated employees is set to $107,432. The DOL may appeal the decision, but with a potential change in administration in January, the rule's future is uncertain. Employers are advised to consult legal counsel before making any changes to employee pay practices, especially in states with higher local thresholds. Read more here.

Commercial Auto Insurance Struggles Persist in 2023

The commercial auto insurance market faced continued challenges in 2023 despite significant premium rate hikes and underwriting changes. Insurers struggled with ongoing losses driven by factors such as increasing repair costs, higher claim severity, and litigation trends. Elevated claims from large trucking accidents and natural disasters also contributed to financial strain. These pressures have pushed insurers to focus on pricing discipline, risk segmentation, and other strategies to improve profitability. However, the market remains under pressure, highlighting the complexity of addressing these persistent issues effectively. Read more here.

For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click here to add your email to our emailing list.

By: Misha Lee | IIAW Lobbyist

Originally published in the December 2022 Wisconsin Independent Agent Magazine. 

Wisconsinites voted this past November to keep a divided state government as a new two-year legislative session begins early next year. Republicans will maintain control of the Legislature with even larger majorities in both chambers and Democrats will hold the top two constitutional statewide offices with the re-election of Governor Tony Evers and Attorney General Josh Kaul.

Incumbent Governor Evers defeated his Republican opponent Tim Michels by a margin of 51 to 48 percent, while Attorney General Josh Kaul defeated his GOP opponent Eric Toney in a tighter race of 51 to 49 percent. Evers outperformed all other candidates on the statewide ballot with the most overall total votes cast and yielding more votes than he did in 2018 when he unseated Governor Scott Walker. Meanwhile, Evers’ opponent Tim Michels underperformed and garnered less overall votes than the Republican statewide candidates running for Attorney General and U.S. Senate. Michels received less total votes than when Walker lost in 2018. Evers' and Kaul’s re-election to another term represents a major win for Wisconsin Democrats in an election year where they faced strong political headwinds nationally. Generally, when one party controls both The White House and Congress, elections historically swing in the other direction. However, Evers and Kaul bucked that trend.

And Evers is the first Wisconsin governor in more than three decades to win re-election in a midterm while a president from the same party held office. Evers' vote totals were due in large part by overwhelming turnout in the Democratic stronghold of Dane County which has accounted for an increasingly large share of Democratic votes statewide, and despite a lower turnout than usual in Milwaukee County. On the flipside, Michels failed to produce enough voter support and turnout in key areas of the state that historically produce large Republican votes. The race for Governor was the most expensive in state history with both candidates and groups spending in excess of $115 million.

Meanwhile, despite a less than stellar performance by Michels for Republicans at the top of the ticket, incumbent U.S. Senator Ron Johnson narrowly won re-election to a third term with his victory over Democrat opponent Lt. Governor Mandela Barnes with just over 26,000 votes between the two of them. Nevertheless, Democrats managed to maintain their slim majority in the U.S. Senate, while Republicans regained control of the U.S. House of Representatives. Barnes easily won the Democratic primary in August in a field of nine candidates at one point, but suffered in the general election with voter turnout setbacks in his home area of Milwaukee County and he did not get support like Evers did with the high turnout in Dane County.

Now with the midterms behind us, another important election just happens to be around the corner and will be one of the more consequential elections in recent state history. Wisconsinites will be asked to cast their votes in the statewide, non-partisan Supreme Court election in February and April of 2023. The outcome of that election will determine whether the conservative or liberal justices hold the majority on the court (currently 4-3 in favor of conservatives) and which could have serious implications with legal challenges over issues such as abortion, redistricting, executive versus legislative branch powers, and environmental matters just to name a few. Next year’s court race is likely to be one of the most expensive electoral contests in state history, and while it’s technically a “non-partisan” race, the political parties and partisan groups are certainly going to be heavily engaged in this election due to its significance.

There will be 31 new members joining the Legislature in January where Republicans will control the Senate 22-11 and the Assembly 64-35. The GOP fell short of the 66 members needed in the Assembly to gain a supermajority and have the power to override vetoes from the Governor. Divided state government continues here for at least another four years and prevents either party from ramming through their agenda without working with the other party.

All four partisan caucuses recently elected their new leadership for the 2023-24 session:

SENATE REPUBLICANS

Senate President – Chris Kapenga (R-Delafield)

Senate President Pro Tempore – Patrick Testin (R-Stevens Point)

Majority Leader – Devin LeMahieu (R-Oostburg)

Assistant Majority Leader – Dan Feyen (R-Fond du Lac)

Caucus Chair – Van Wanggaard (R-Racine)

Caucus Vice Chair – Joan Ballweg (R-Markesan)

SENATE DEMOCRATS

Senate Minority Leader – Melissa Agard (D-Madison)

Senate Minority Assistant Leader – Jeff Smith (D-Brunswick)

Senate Minority Caucus Chair – Chris Larson (D-Milwaukee)

Senate Minority Caucus Vice Chair – Dianne Hesselbein (D-Middleton)

ASSEMBLY REPUBLICANS

Assembly Speaker – Robin Vos (R-Rochester)

Assembly Speaker Pro Tempore – Kevin Petersen (R-Waupaca)

Majority Leader – Tyler August (R-Lake Geneva)

Assistant Majority Leader – Jon Plumer (R-Lodi)

Caucus Chair – Rob Summerfield (R-Bloomer)

Caucus Vice Chair – Cindi Duchow (R-Town of Delafield)

Caucus Sergeant at Arms – Treig Pronschinske (R-Mondovi)

ASSEMBLY DEMOCRATS

Assembly Minority Leader – Greta Neubauer (D-Racine)

Assembly Minority Assistant Leader – Kalan Haywood (D-Milwaukee)

Assembly Minority Caucus Chair – Lisa Subeck (D-Madison)

Assembly Minority Caucus Vice Chair – Jill Billings (D-La Crosse)

Assembly Minority Secretary – Kristina Shelton (D-Green Bay)

Assembly Minority Sergeant at Arms – Lee Snodgrass (D-Appleton)

By: Misha Lee, IIAW Lobbyist

Get ready Wisconsinites for yet another closely watched, competitive election year. That’s according to the latest results from a new Marquette University Law School poll released earlier this month. The poll of 803 registered voters suggests that the high profile primary races among Republicans for the job of Governor and for the coveted position of United States Senator among Democrats are equally shaping up to be tight contests with just less than a month and a half to go until the August 9 primaries and the general election to follow on November 8. These two races, in particular, are important politically because they could ultimately decide who controls the U.S. Senate and/or whether the state of Wisconsin will continue with split party governance or have one party control of the legislative and executive branches next session.

In the now, five-way Republican gubernatorial primary that determines who will face off against first-term, incumbent Democrat Governor Tony Evers, business owner Tim Michels and former Lieutenant Governor Rebecca Kleefisch are running in a neck-and-neck race with Michels having a slight lead of 27 percent among Republicans and Independents who say they will vote in the GOP primary. Kleefisch received support from 26 percent of primary voters, Kevin Nicholson had 10 percent, Tim Ramthun 3 percent, and relative unknown Adam Fischer with less than .5 percent.

Tim Michels’ candidacy is a late entry into the race since April 22 and yet already he has made a name for himself (aside from his well-known Wisconsin construction business - Michels Corporation), most notably receiving the much-sought-after endorsement of former President Donald Trump, who continues to carry significant sway in Wisconsin and nationwide among Republican voters. Michels returns to the political stage having last ran for public office nearly two decades ago in 2004 when he won a four-way Republican primary for U.S. Senate. He ultimately lost in the general election to former U.S. Senator Russ Feingold. Kleefisch, who is most known for serving alongside former Governor Scott Walker for two full terms as Lt. Governor from 2011 to 2019, has been campaigning for the better part of a year now and leads slightly in favorability ratings among her GOP rivals with 44 percent favorability versus 10 percent who had an unfavorable view of her. Candidate Michels was close behind with 42 percent favorability and 7 percent unfavorable; Nicholson at 27 percent; and Ramthun with 3 percent. The most noteworthy statistic in this race taken from the latest poll results is that a substantial 32 percent (nearly one third) of Republican primary voters remain undecided in this contest, meaning this race is a toss-up as each of the candidates try to convince the large swath of undecided voters to support them as the Republican nominee. For someone like Kleefisch, who is a pretty well-known commodity among GOP voters and who has been campaigning longer and harder than the rest of the field, it will likely be more difficult for her to pick up significant votes from this group of undecideds unless her campaign is able to convince them that she is the only candidate in the GOP field that can defeat Evers in November.

The Marquette poll also revealed a close race in Wisconsin’s Democratic U.S. Senate primary that will determine who will challenge incumbent U.S. Senator Ron Johnson who is running for another 6-year term despite having initially said that he wouldn’t run again. Current Lt. Governor Mandela Barnes, who is widely seen as the primary race’s frontrunner, leads the rather large, eight-person field with 25 percent of Democratic primary voters who say they would vote for him. Milwaukee Bucks executive Alex Lasry, received 21 percent with the four-point differential between him and Barnes falling within the poll’s margin of error making the race a virtual tie. In a distant third and fourth place and not gaining much ground from previously conducted polls is Wisconsin State Treasurer Sarah Godlewski who received just 9 percent and Outagamie County Executive Tom Nelson who received 7 percent support. The other remaining candidates received 1 percent or less. At some point it is possible one or both of these primary candidates (Godlewski and Nelson) may decide to suspend their campaigns due to lack of momentum and possibly throw their support behind another candidate which could dramatically alter who leads the field. Similarly as in the Republican gubernatorial race, a significant 36 percent of Democratic U.S. Senate primary voters still have not made up their minds on who to support in this wide open contest. More than one-third of primary voters are still up for grabs in this primary battle. It will be a close race to the August 9 finish line for sure, but the campaigns for Mandela Barnes and Alex Lasry have clearly established themselves as the two leading Democratic candidates in this Senate primary.

The poll also previewed early head-to-head general election matchups between incumbent Governor Tony Evers and his potential Republican challengers, as well as U.S. Senator Ron Johnson against his potential Democratic rivals. The poll results revealed some initial positive news for Evers in that he leads all of his potential challengers regardless of who might emerge in the primary.

While it is still very early to make any assumptions about these results and the mood of the electorate is certainly volatile heading into November, Evers’ lead over his potential challengers highlights the advantages of incumbency and having the bully pulpit, especially if the incumbent hasn’t given voters a real strong reason to send him packing. The closest general election matchup in the poll is between Evers and Kleefisch where he has a slight lead of 47 percent to 43 percent and it was the only matchup that fell within the poll’s margin of error. However, unlike Evers, U.S. Senator Ron Johnson trailed all but one potential challenger in a head-to-head matchup, according to the poll revealing his vulnerability as an incumbent seeking re-election. The only candidate where Johnson led was against Alex Lasry by just three percentage points and all matchups fell well within the poll’s margin of error meaning this will be a very tight race in November no matter who emerges from the Democratic side. Some observers highlight that Sen. Johnson is the number one target nationally for Democrats as a seat to pick up in November. Johnson has trailed in the polls before and somehow managed to win. It remains to be seen whether or not he can continue that streak in an off-presidential election year where turnout and how independent voters break will be a determining factor.

The Marquette Law School poll interviewed 803 registered Wisconsin voters by landline or cell phone from June 14-20, 2022. The margin of error is +/-4.3 percentage points for the full sample. The margin of error for 369 Democratic primary voters is 6.2 percentage points and for 372 Republican primary voters is 6.3 percentage points.

See the official poll results at bit.ly/MarquettePollResults.

By: Misha Lee, IIAW Lobbyist

Former Lieutenant Governor Rebecca Kleefisch officially launched her anticipated gubernatorial campaign setting in motion a high stake, competitive race for Wisconsin Governor next year. Kleefisch, 46, is the first known Republican candidate to join the race in a challenge to first term incumbent Democratic Governor Tony Evers, who announced that he’s running for re-election. Kleefisch served as Lieutenant Governor under former Governor Scott Walker from 2011 to 2019. The only other announced GOP candidate so far is businessman Jonathan Wichmann, a relatively unknown name in the race. Other names mentioned as possible Republican primary contenders are State Senator Chris Kapenga of Delafield, State Representative John Macco of Green Bay and 2018 U.S. Senate candidate Kevin Nicholson. But Kleefisch is clearly the heavy favorite among Republicans where she has a strong statewide name ID and has been traveling the state for the past year talking about her policy priorities.

The 2022 midterm elections are traditionally a challenge for the political party in the White House and Wisconsin’s race for Governor will be one to watch closely considering those headwinds will be strong.

The partisan primary election is on Tuesday, August 9, 2022 and the general election is on Tuesday, November 8, 2022.

Gov. Evers Signs Bill Freezing UI Tax Rates Through 2023

As employers continue to deal with challenges brought about by the COVID-19 pandemic, the Wisconsin Republican-controlled state legislature and Democratic governor have found some common ground this legislative session to help try and ease the burden on businesses. Governor Tony Evers signed legislation this past summer that prevents an increase in Unemployment Insurance (UI) contribution rates on employers through 2023.

This is a positive development for businesses all throughout Wisconsin.

Assembly Bill 406, now known as 2021 Wisconsin Act 59, passed both houses of the state legislature unanimously with no opposition. The newly enacted legislation:

• Prevents the increase of unemployment insurance

   tax rates on employers by ensuring the state remains

   in Schedule D for tax years 2022 and 2023; and

• Requires $60 million of General Purpose Revenues

   (GPR) to be transferred into the UI trust fund in each

   fiscal year of the 2021-23 biennium to offset any lost

   revenue

By way of a little background, under state law most private employers are required to make regular payments to the Unemployment Insurance (UI) program at a rate determined by state statute. State law requires two types of payments - contribution payments and solvency payments. Both types of payments are tied to one of four schedules (A-D) with Schedule A containing the highest rates for employers to pay and Schedule D containing the lowest rates. The balance of the Unemployment Reserve Fund on June 30th of each year determines which schedule will be in effect for the next calendar year. State law specifies that Schedule D is in effect for any calendar year whenever, as of the preceding June 30th, the fund has a cash balance of at least $1,200,000,000. Schedule D is in effect for calendar year 2021.

See new employer Schedule D Unemployment Insurance tax rates for 2021 at

https://bit.ly/Oct21GovAffairs.

By: Misha Lee | IIAW Lobbyist

This article was featured in our November 2020 Wisconsin Independent Agent. To read the full issue, click here. 

A lawsuit filed this month seeks to prevent Governor Tony Evers and his administration from publishing a list of Wisconsin businesses that have had 2 or more confirmed cases of COVID-19 among their employees since June. The administration cited legal compliance with open record requests from the media as their basis for releasing the information. This summer, it’s relevant to point out that Governor Evers had originally stated that it was his position that the information was not public and keeping it private actually helps public officials better manage outbreaks of COVID-19.

Wisconsin Manufacturers and Commerce (WMC), along with several other local area chambers of commerce, immediately brought a lawsuit seeking an injunction by the court when it was learned that Governor Evers’ Department of Health Services (DHS) had reversed course and was preparing to release a list of businesses. Subsequently, a Waukesha County circuit court judge issued a temporary restraining order stopping the release of the information. The judge’s order will remain in place through the month of November while litigants in the case prepare and make their arguments to the court.

Read the lawsuit filed here. The legal challenge, in part, argues:

• The records that defendants (Evers, DHS, DOA) plan to

   disclose are protected by patient-confidentiality laws.

• Even if the information that the defendants plan to release

   were not explicitly protected by health-privacy laws, the

   open-records statute would not authorize disclosure of

   the information.

• Disclosure would cause plaintiffs’ members and businesses

   across the state irreparable harm.

The DHS list, if allowed to be published, would include: 1) Businesses with 25 or more employees; 2) include the business name and the number of known or suspected COVID-19 cases among employees of the business; 3) information from “closed investigations” will be provided. These are defined as businesses that had 2 or more confirmed cases within 28 days of each other, but have not had any subsequent cases within 28 days; and 4) the administration’s plan would also release business information even if those businesses had no employees test positive, but had two or more contact tracing investigations.

IIAW strongly objects to the publication of this list and has joined the chorus of business groups in urging the administration to reconsider its position. The action taken by the administration does nothing to protect the health of the general public. Further, it undermines the amount of time, effort and expense that Wisconsin’s essential businesses have invested in protecting their employees and their customers during this extremely challenging  pandemic. The reputational and financial damage this action could cause thousands of businesses if allowed, particularly those struggling due to the negative impacts from the pandemic, could be crippling. Identifying the names of employers that had employees or customers who tested positive for COVID-19 gives the false impression that the employees or customers got the virus at their place of work or at a particular business location – when that is almost impossible to determine. Even further, the release of business names and information could also expose businesses to greater liability for frivolous lawsuits. IIAW, along with more than 70 state trade organizations, have called on the Wisconsin legislature to pass liability protection legislation for employers during the pandemic. The legislation would create a safe harbor for all property owners and occupants who are good actors against frivolous lawsuits alleging a plaintiff was infected with COVID-19 at a specific premises. The legislature has not acted, but may convene following the November 3rd election.

Since filing of the lawsuit and the court’s injunction, the Department of Health Services (DHS) has not be able to provide any additional information regarding the list of businesses due to the pending litigation on the matter.