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AN ACT relating to wages. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 337.010 is amended to read as follows: 3
(1) As used in this chapter, unless the context requires otherwise: 4
(a) "Commissioner" means the commissioner of the Department of Workplace 5
Standards under the direction and supervision of the secretary of the 6
Education and Labor Cabinet; 7
(b) "Department" means the Department of Workplace Standards in the 8
Education and Labor Cabinet; 9
(c) 1. "Wages" includes any compensation due to an employee by reason of 10
his or her employment, including salaries, commissions, vested vacation 11
pay, overtime pay, severance or dismissal pay, earned bonuses, and any 12
other similar advantages agreed upon by the employer and the employee 13
or provided to employees as an established policy. The wages shall be 14
payable in legal tender of the United States, checks on banks, direct 15
deposits, or payroll card accounts convertible into cash on demand at 16
full face value, subject to the allowances made in this chapter. However, 17
an employee may not be charged an activation fee and the payroll card 18
account shall provide the employee with the ability, without charge, to 19
make at least one (1) withdrawal per pay period for any amount up to 20
and including the full account balance. 21
2. For the purposes of calculating hourly wage rates for scheduled 22
overtime for professional firefighters, as defined in KRS 95A.210(8), 23
"wages" shall not include the distribution to qualified professional 24
firefighters by local governments of supplements received from the 25
Firefighters Foundation Program Fund. For the purposes of calculating 26
hourly wage rates for unscheduled overtime for professional firefighters, 27 UNOFFICIAL COPY 23 RS BR 1534
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as defined in KRS 95A.210(9), "wages" shall include the distribution to 1
qualified professional firefighters by local governments of supplements 2
received from the Firefighters Foundation Program Fund; 3
(d) "Employer" is any person, either individual, corporation, partnership, agency, 4
or firm who employs an employee and includes any person, either individual, 5
corporation, partnership, agency, or firm acting directly or indirectly in the 6
interest of an employer in relation to an employee; and 7
(e) "Employee" is any person employed by or suffered or permitted to work for 8
an employer, except that: 9
1. Notwithstanding any voluntary agreement entered into between the 10
United States Department of Labor and a franchisee, neither a franchisee 11
nor a franchisee's employee shall be deemed to be an employee of the 12
franchisor for any purpose under this chapter; and 13
2. Notwithstanding any voluntary agreement entered into between the 14
United States Department of Labor and a franchisor, neither a franchisor 15
nor a franchisor's employee shall be deemed to be an employee of the 16
franchisee for any purpose under this chapter. 17
For purposes of this paragraph, "franchisee" and "franchisor" have the same 18
meanings as in 16 C.F.R. sec. 436.1. 19
(2) As used in KRS 337.275 to 337.325, 337.345, and 337.385 to 337.405, unless the 20
context requires otherwise: 21
(a) "Employee" is any person employed by or suffered or permitted to work for 22
an employer, but shall not include: 23
1. Any individual employed in agriculture; 24
2. Any individual employed in a bona fide executive, administrative, 25
supervisory, or professional capacity, or in the capacity of outside 26
salesperson[salesman], or as an outside collector as the terms are 27 UNOFFICIAL COPY 23 RS BR 1534
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defined by administrative regulations of the commissioner; 1
3. Any individual employed by the United States; 2
4. Any individual employed in domestic service in or about a private 3
home. The provisions of this section shall include individuals employed 4
in domestic service in or about the home of an employer where there is 5
more than one (1) domestic servant regularly employed; 6
5. [Any individual classified and given a certificate by the commissioner 7
showing a status of learner, apprentice, worker with a disability, 8
sheltered workshop employee, and student under administrative 9
procedures and administrative regulations prescribed and promulgated 10
by the commissioner. This certificate shall authorize employment at the 11
wages, less than the established fixed minimum fair wage rates, and for 12
the period of time fixed by the commissioner and stated in the certificate 13
issued to the person; 14
6. ]Employees of retail stores, service industries, hotels, motels, and 15
restaurant operations whose average annual gross volume of sales made 16
for business done is less than ninety-five thousand dollars ($95,000) for 17
the five (5) preceding years exclusive of excise taxes at the retail level 18
or if the employee is the parent, spouse, child, or other member of his or 19
her employer's immediate family; 20
6[7]. Any individual employed as a baby-sitter in an employer's home, or an 21
individual employed as a companion by a sick, convalescing, or elderly 22
person or by the person's immediate family, to care for that sick, 23
convalescing, or elderly person and whose principal duties do not 24
include housekeeping; 25
7[8]. Any individual engaged in the delivery of newspapers to the consumer; 26
8[9]. Any individual subject to the provisions of KRS Chapters 7, 16, 27A, 27 UNOFFICIAL COPY 23 RS BR 1534
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30A, and 18A provided that the secretary of the Personnel Cabinet shall 1
have the authority to prescribe by administrative regulation those 2
emergency employees, or others, who shall receive overtime pay rates 3
necessary for the efficient operation of government and the protection of 4
affected employees; 5
9[10]. Any employee employed by an establishment which is an 6
organized nonprofit camp, religious, or nonprofit educational conference 7
center, if it does not operate for more than two hundred ten (210) days in 8
any calendar year; 9
10[11]. Any employee whose function is to provide twenty-four (24) hour 10
residential care on the employer's premises in a parental role to children 11
who are primarily dependent, neglected, and abused and who are in the 12
care of private, nonprofit childcaring facilities licensed by the Cabinet 13
for Health and Family Services under KRS 199.640 to 199.670; 14
11[12]. Any individual whose function is to provide twenty-four (24) hour 15
residential care in his or her own home as a family caregiver, family 16
home provider, or adult foster care provider and who is approved to 17
provide family caregiver services to an adult with a disability through a 18
contractual relationship with a community board for mental health or 19
individuals with an intellectual disability established under KRS 20
210.370 to 210.460 or through a contractual relationship with a certified 21
waiver provider as defined in 907 KAR 7:005 sec. 1(5), or is certified or 22
licensed by the Cabinet for Health and Family Services to provide adult 23
foster care; 24
12[13]. A direct seller as defined in Section 3508(b)(2) of the Internal 25
Revenue Code of 1986; or 26
13[14]. Any individual whose function is to provide behavior support 27 UNOFFICIAL COPY 23 RS BR 1534
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services, behavior programming services, case management services, 1
community living support services, positive behavior support services, 2
or respite services through a contractual relationship with a certified 3
waiver provider, as defined in 907 KAR 7:005 sec. 1(5), pursuant to a 4
1915(c) home and community based services waiver program, as 5
defined in 907 KAR 7:005 sec. 1(2); 6
(b) "Agriculture" means farming in all its branches, including cultivation and 7
tillage of the soil; dairying; production, cultivation, growing, and harvesting 8
of any agricultural or horticultural commodity; raising of livestock, bees, 9
furbearing animals, or poultry; and any practice, including any forestry or 10
lumbering operations, performed on a farm in conjunction with farming 11
operations, including preparation and delivery of produce to storage, to 12
market, or to carriers for transportation to market; 13
(c) "Gratuity" means voluntary monetary contribution received by an employee 14
from a guest, patron, or customer for services rendered; 15
(d) "Tipped employee" means any employee engaged in an occupation in which 16
he or she customarily and regularly receives more than thirty dollars ($30) per 17
month in tips;[ and] 18
(e) "U.S.C." means the United States Code; and 19
(f) "Worker with a disability" means an individual whose earning or 20
productive capacity is impaired by age or physical or mental deficiency or 21
injury for the work he or she is to perform. 22
Section 2. KRS 337.275 is amended to read as follows: 23
[(1) Except as may otherwise be provided by this chapter, ]Every employer shall pay to 24
each of his or her employees, including tipped employees, employees under eighteen 25
(18) years old, and workers with a disability, wages at a rate of not less than five dollars 26
and eighty-five cents ($5.85) an hour beginning on June 26, 2007, not less than six 27 UNOFFICIAL COPY 23 RS BR 1534
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dollars and fifty-five cents ($6.55) an hour beginning July 1, 2008,[ and] not less than 1
seven dollars and twenty-five cents ($7.25) an hour beginning July 1, 2009, not less than 2
thirteen dollars ($13) an hour beginning July 1, 2024, not less than fourteen dollars 3
($14) an hour beginning July 1, 2025, and not less than fifteen dollars ($15) an hour 4
beginning July 1, 2026, and every year thereafter. If the federal minimum hourly wage 5
as prescribed by 29 U.S.C. sec. 206(a)(1) is increased in excess of the minimum hourly 6
wage in effect under this subsection, the minimum hourly wage under this subsection 7
shall be increased to the same amount, effective on the same date as the federal minimum 8
hourly wage rate. If the state minimum hourly wage is increased to the federal minimum 9
hourly wage, it shall include only the federal minimum hourly rate prescribed in 29 10
U.S.C. sec. 206(a)(1) and shall not include other wage rates or conditions, exclusions, or 11
exceptions to the federal minimum hourly wage rate. In addition, the increase to the 12
federal minimum hourly wage rate does not extend or modify the scope or coverage of 13
the minimum wage rate required under this chapter. 14
[(2) Notwithstanding the provisions of subsection (1) of this section, for any employee 15
engaged in an occupation in which he customarily and regularly receives more than 16
thirty dollars ($30) per month in tips from patrons or others, the employer may pay 17
as a minimum not less than the hourly wage rate required to be paid a tipped 18
employee under the federal minimum hourly wage law as prescribed by 29 U.S.C. 19
sec. 203. The employer shall establish by his records that for each week where 20
credit is taken, when adding tips received to wages paid, not less than the minimum 21
rate prescribed in 29 U.S.C. sec. 203 was received by the employee. No employer 22
shall use all or part of any tips or gratuities received by employees toward the 23
payment of the statutory minimum hourly wage as required by 29 U.S.C. sec. 203. 24
Nothing, however, shall prevent employees from entering into an agreement to 25
divide tips or gratuities among themselves.] 26
Section 3. KRS 337.295 is amended to read as follows: 27 UNOFFICIAL COPY 23 RS BR 1534
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Regulations issued by the commissioner under KRS 337.275 to 337.325, 337.345, and 1
337.385 to 337.405 may include[,] but are not limited to[,] regulations defining and 2
governing bona fide executive, administrative, or professional employees; [regulations 3
governing learners, apprentices, workers with disabilities, sheltered workshop employees, 4
and students, ]regulations governing outside salespersons[salesmen]; bonuses; part-time 5
rates; special pay for special or extra work; allowances as part of the wage rates 6
applicable under KRS 337.275 for board, lodging, and gratuities; other facilities or 7
services furnished by employers and used by employees; and other special items usual in 8
a particular employer-employee relationship. 9
Section 4. KRS 154.22-040 is amended to read as follows: 10
(1) Each year[,] the authority shall, under its Rural Economic Development Assistance 11
Program, on the basis of the final unemployment figures calculated by the 12
Department of Workforce Development in the Education and Labor Cabinet, 13
determine which counties have had a countywide rate of unemployment exceeding 14
the statewide unemployment rate of the Commonwealth in the most recent five (5) 15
consecutive calendar years, or which have had an average countywide rate of 16
unemployment exceeding the statewide unemployment rate of the Commonwealth 17
by two hundred percent (200%) in the most recent calendar year, and shall certify 18
those counties as qualified counties. A county not certified on the basis of final 19
unemployment figures may also be certified as a qualified county if the authority 20
determines the county is one (1) of the sixty (60) most distressed counties in the 21
Commonwealth based on the following criteria with equal weight given to each 22
criterion: 23
(a) The average countywide rate of unemployment in the most recent three (3) 24
consecutive calendar years, on the basis of final unemployment figures 25
calculated by the Department of Workforce Development in the Education 26
and Labor Cabinet; 27 UNOFFICIAL COPY 23 RS BR 1534
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(b) In each county the percentage of adults twenty-five (25) years of age and 1
older who have attained at least a high school education or equivalent, on the 2
basis of the most recent data available from the United States Department of 3
Commerce, Bureau of the Census; and 4
(c) Road quality, as quantified by the access within a county to roads ranked in 5
descending order from best quality to worst quality as follows: two (2) or 6
more interstate highways, one (1) interstate highway, a state four (4) lane 7
parkway, four (4) lane principal arterial access to an interstate highway, state 8
two (2) lane parkway and none of the preceding road types, as certified by the 9
Kentucky Transportation Cabinet to the authority. 10
If the authority determines that a county which has previously been certified as a 11
qualified county no longer meets the criteria of this subsection, the authority shall 12
decertify that county. The authority shall not provide inducements for any facilities 13
in that county and an approved company shall not be eligible for the inducements 14
offered by KRS 154.22-010 to 154.22-070 unless the tax incentive agreements 15
required herein are entered into by all parties prior to July 1 of the year following 16
the calendar year in which the authority decertified that county. In addition, the 17
authority shall certify coal-producing counties, not otherwise certified as qualified 18
counties in this subsection, for economic development projects involving the new 19
construction of electric generation facilities. A coal-producing county shall mean a 20
county in the Commonwealth of Kentucky that has produced coal upon which the 21
tax imposed under KRS 143.020 was paid at any time. For economic development 22
projects undertaken in a regional industrial park, as defined in KRS 42.4588, or in 23
an industrial park created pursuant to an interlocal agreement in which revenues are 24
shared as provided in KRS 65.210 to 65.300, where the physical boundaries of the 25
industrial park lie within two (2) or more counties of which at least one (1) of the 26
counties is a qualified county under this section, an eligible company undertaking 27 UNOFFICIAL COPY 23 RS BR 1534
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an economic development project within the physical boundaries of the industrial 1
park may be approved for the inducements under KRS 154.22-010 to 154.22-080. 2
(2) The authority shall establish the procedures and standards for the determination and 3
approval of eligible companies and their economic development projects by the 4
promulgation of administrative regulations in accordance with KRS Chapter 13A. 5
The criteria for approval of eligible companies and economic development projects 6
shall include but not be limited to the creditworthiness of eligible companies; the 7
number of new jobs to be provided by an economic development project to 8
residents of the Commonwealth; and the likelihood of the economic success of the 9
economic development project. 10
(3) The economic development project shall involve a minimum investment of one 11
hundred thousand dollars ($100,000) by the eligible company and shall result in the 12
creation by the eligible company, within two (2) years from the date of the final 13
approval authorizing the economic development project, of a minimum of fifteen 14
(15) new full-time jobs at the site of the economic development project for 15
Kentucky residents to be employed by the eligible company and to be held by 16
persons subject to the personal income tax of the Commonwealth. The authority 17
may extend this two (2) year period upon the written application of an eligible 18
company requesting an extension. 19
(4) (a) Within six (6) months after the activation date, the approved company shall 20
compensate a minimum of ninety percent (90%) of its full-time employees 21
whose jobs were created with base hourly wages equal to either: 22
1. Seventy-five percent (75%) of the average hourly wage for the 23
Commonwealth; or 24
2. Seventy-five percent (75%) of the average hourly wage for the county in 25
which the project is to be undertaken. 26
(b) If the base hourly wage calculated in paragraph (a)1. or 2. of this subsection is 27 UNOFFICIAL COPY 23 RS BR 1534
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less than one hundred fifty percent (150%) of the federal minimum wage, then 1
the base hourly wage shall be one hundred fifty percent (150%) of the federal 2
minimum wage. However, for projects receiving preliminary approval of the 3
authority prior to July 1, 2008, the base hourly wage shall be one hundred 4
fifty percent (150%) of the federal minimum wage existing on January 1, 5
2007. In addition to the applicable base hourly wage calculated above, the 6
eligible company shall provide employee benefits equal to at least fifteen 7
percent (15%) of the applicable base hourly wage; however, if the eligible 8
company does not provide employee benefits equal to at least fifteen percent 9
(15%) of the applicable base hourly wage, the eligible company may qualify 10
under this section if it provides the employees hired by the eligible company 11
as a result of the economic development project total hourly compensation 12
equal to or greater than one hundred fifteen percent (115%) of the applicable 13
base hourly wage through increased hourly wages combined with employee 14
benefits. 15
(c) The requirements of this subsection shall not apply to eligible companies 16
which are nonprofit corporations established under KRS 273.163 to 273.387 17
[and whose employees are handicapped and sheltered workshop workers 18
employed at less than the established minimum wage as authorized by KRS 19
337.295]. 20
For an eligible company, within a regional industrial park which lies within two (2) 21
or more counties, the calculation of the wage and benefit requirement shall be 22
determined by averaging the average county hourly wage for all counties within the 23
regional industrial park. 24
(5) No economic development project which will result in the replacement of 25
agribusiness, manufacturing, or electric generation facilities existing in the state 26
shall be approved by the authority; however, the authority may approve an 27 UNOFFICIAL COPY 23 RS BR 1534
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economic development project that: 1
(a) Rehabilitates an agribusiness, manufacturing, or electric generation facility: 2
1. Which has not been in operation for a period of ninety (90) or more 3
consecutive days; 4
2. For which the current occupant of the facility has published a notice of 5
closure so long as the eligible company intending to acquire the facility 6
is not an affiliate of the current occupant; or 7
3. The title to which is vested in other than the eligible company or an 8
affiliate of the eligible company and that is sold or transferred pursuant 9
to a foreclosure ordered by a court of competent jurisdiction or an order 10
of a bankruptcy court of competent jurisdiction; 11
(b) Replaces an agribusiness, manufacturing, or electric generation facility 12
existing in the Commonwealth: 13
1. The title to which shall have been taken under the exercise of the power 14
of eminent domain, or the title to which shall be the subject of a 15
nonappealable judgment granting the authority to exercise the power of 16
eminent domain, in either event to the extent that normal operations 17
cannot be resumed at the facility within twelve (12) months; or 18
2. Which has been damaged or destroyed by fire or other casualty to the 19
extent that normal operations cannot be resumed at the facility within 20
twelve (12) months; or 21
(c) Replaces an existing agribusiness, manufacturing, or electric generation 22
facility located in the same qualified county, and the existing agribusiness, 23
manufacturing, or electric generation facility to be replaced cannot be 24
expanded due to the unavailability of real estate at or adjacent to the 25
agribusiness, manufacturing, or electric generation facility to be replaced. Any 26
economic development project satisfying the requirements of this subsection 27 UNOFFICIAL COPY 23 RS BR 1534
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shall only be eligible for inducements to the extent of the expansion, and no 1
inducements shall be available for the equivalent of the agribusiness, 2
manufacturing, or electric generation facility to be replaced. No economic 3
development project otherwise satisfying the requirements of this subsection 4
shall be approved by the authority which results in a lease abandonment or 5
lease termination by the approved company without the consent of the lessor. 6
(6) With respect to each eligible company making an application to the authority for 7
inducements, and with respect to the economic development project described in 8
the application, the authority shall request materials and make inquiries of the 9
applicant as necessary or appropriate. Upon review of the application and 10
completion of initial inquiries, the authority may, by resolution, give its preliminary 11
approval by designating an eligible company as a preliminarily approved company 12
and authorizing the undertaking of the economic development project. After 13
preliminary approval, the authority may by final approval designate an eligible 14
company to be an approved company. 15
Section 5. Sections 1 to 3 of this Act may be cited as the Kentucky One Fair 16
Wage Act. 17