HARLAN, Ky. (WTVQ) – Two state lawmakers who represent voters in eastern Kentucky are pre-filing a bill to close a loophole in an existing state law that requires coal companies in business less than five consecutive years, to put up a performance bond to cover four weeks of payroll.
A shortcoming in the law does not provide a way for the Labor Cabinet to know which new companies are supposed to post bond.
Senator Johnny Ray Turner and Representative Angie Hatton’s bill would suspend or revoke new coal companies’ mining permits until the required performance bonds are posted.
The legislation would also require miners’ lawyer fees to be recouped if they have to sue in order to receive their paychecks.
The bill is scheduled to be introduced in the 2020 General Assembly in January.
The legislation is the result of this summer’s Blackjewel bankruptcy. The coal company filed for protection on July 1, 2019. Its coal miners were not paid for the work they had performed for the company.
Immediately following the bankruptcy filing, Blackjewel’s miners found themselves out of work, without health insurance and owed money. They sued to get paid what they are owed.
Blackjewel incorporated in 2017, so the company should have posted a bond that would have taken care of the miners’ wages despite the bankruptcy filing, according to the Labor Cabinet.
State records show Blackjewel didn’t post a bond prior to filing for bankruptcy, causing its miners’ paychecks to be clawed back.
The cabinet has issued Blackjewel a citation, including a $366,500 fine for violating the state law.
Blackjewel says it will reimburse employees by collecting a per-ton fee expected to accumulate $550,000 over the next two years. It says it will also pay workers $450,000 from a deal allowing Kopper Glo Mining to buy two Blackjewel mines.
Meantime, the Kentucky Attorney General’s Office says it will investigate whether coal companies are posting performance bonds intended to secure employees wages.